## Implementation Plan in Response to Board-Endorsed Recommendations Arising from the Independent Evaluation Office Report on The IMF and Aid to Sub-Saharan Africa

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---

### I. Introduction — scope and context
- Paper prepared by the Policy Development and Review Department in consultation with other departments; approved by Mark Allen on June 5, 2007.
- Purpose:
  - Sets out the IEO Report recommendations and the Executive Board’s views (Section II).
  - Outlines work streams to respond to Board-endorsed recommendations (Section III).
  - Estimates the cost of the first stage of the Fund’s response; costings for implementation-phase proposals to be provided in forthcoming Board papers.
  - Solicits Directors’ feedback.
- Context:
  - IEO Report surveyed the period from 2000 to 2005.
  - Noted changes in low-income members: improved macroeconomic outcomes, multilateral and bilateral debt relief initiatives, prospect of increased aid flows, globalization, and sustained trade and capital flows; conflict and negative terms-of-trade shocks increased vulnerabilities in some cases.
  - Fund responded via the Medium-Term Strategy (MTS) to focus and deepen engagement with low-income members.
  - Ongoing relevant Fund initiatives include Fund-Bank country-level pilots on financial sector issues, natural resources, and public financial management; and work on Bank-Fund collaboration.

### II. IEO recommendations and Board reactions — key messages and Director responses
- Overarching lesson from IEO:
  - “critical importance of operationalizing institutional change.”
- IEO recommendations emphasized need for:
  - A reaffirmation of, and clarity on, Fund policies relating to handling of aid inflows.
  - Transparent monitoring and evaluation of policy implementation.
  - Clarification of role and resourcing of resident representatives’ and mission chiefs’ outreach activities.
  - Consistency and clear communication of both stated policy and implementation internally and externally.
- Directors’ response (highlights):
  - Welcomed the IEO Report findings and judged it timely in light of MTS work.
  - Noted improved macroeconomic performance in Sub-Saharan African countries over the past decade and recognized the Fund’s contribution, while acknowledging exogenous factors and authorities’ efforts.
  - Agreed that considerable scope remains to improve the Fund’s work in these countries.
  - Generally supported the IEO recommendations; requested implementation modalities and monitoring.
- Specific Director views (summarized):
  - A. Fund policies on spending and absorption of additional aid, mobilization of aid, alternative scenarios, PSIA, pro-poor and pro-growth budget frameworks — reaffirm importance; implementation should be case-by-case and focused on Fund’s core mandate.
  - A.2: Confirmed importance of accommodating higher aid flows through higher spending and net imports, provided macroeconomic stability is not jeopardized.
  - A.4–A.5: Distributional policies generally lie outside Fund’s core mandate; PSIA should be conducted by other agencies in the PRSP process; improve Fund collaboration with development partners, particularly the World Bank.
  - A.6–A.7: Support for limited alternative aid scenarios assessing consistency with macroeconomic stability; World Bank and other MDBs should lead on expenditure composition advice.
  - A.8–A.9: Need improved transparency and clear communications by the Fund; ensure institutional communications are consistent with Board-approved operational policies.
  - B. Monitoring and evaluation: Welcomed transparent mechanisms for monitoring and evaluating implementation of clarified policy guidance; strengthen ex-post assessments and consider broader stocktaking in PRGF periodic reviews (next PRGF review currently scheduled for 2010).
  - C. Resident representatives and mission chiefs: Clarify expectations and resource availabilities for interactions with local donor groups and civil society; monitor changing aid modalities and decentralization of donor operations; undertake cost-benefit analysis before changing RR roles.
  - D. Communications: Need improved and more realistic Fund communications; greater clarity externally on what the Fund can and cannot do in low-income country work; step-up internal communications to align staff work with institutional priorities.

### III. Implementation plan — work streams, deliverables, and sequencing
- Overall approach:
  - Build on existing work streams linked to the MTS and other ongoing initiatives.
  - Map Board-endorsed recommendations to specific papers and actions.
  - Use timely Board discussions to provide guidance and to inform the IMF’s communication of policies.
- Four broad areas and primary deliverables:
  A. Fund policies relating to the handling of aid inflows
    - Primary deliverables:
      - The Role of the Fund in Managing Aid Inflows and Impact on the Design of Fund-supported Programs (slated for Board discussion in June/July).
        - Will clarify Fund policy on: spending and absorption of additional aid; mobilization of aid; alternative scenarios; pro-poor and pro-growth budget frameworks.
      - Fiscal Policy Response to Scaled-up Aid (and accompanying background papers) (slated for Board discussion in June/July alongside the paper above).
        - Will provide the framework for the Fund’s approach to the fiscal challenges of increasing aid flows.
  B. Monitoring and evaluation of implementation of clarified policy guidance
    - Primary deliverables:
      - Review of the staff guidance note on ex post assessments to ensure coverage of staff actions and contributions to implementation of existing and clarified policies.
      - The next review of the PRGF, currently scheduled for 2010; review could be brought forward if necessary, with consideration of resource costs.
  C. Role and resourcing of resident representatives’ and mission chiefs’ interactions with local donors and civil society
    - Primary deliverables:
      - The Role of the Fund in the PRSP and Donor Coordination Processes (slated for Board discussion in the coming months).
        - Will recommend role of resident representatives and mission chiefs in interacting with donors and civil society; consider appropriate means of involving Fund staff in PRSP and donor coordination; identify areas of responsibility and accountability; clarify parameters of Fund involvement in PRSP and donor collaboration processes, MDG support, managing aid inflows and resource fluctuations, and supporting macroeconomically critical structural reforms.
      - The IMF’s Communication Strategy (see D.i) will address broader outreach issues in low-income members.
  D. Need for consistent policy implementation and clear communication internally and externally
    - Primary deliverable:
      - The IMF’s Communications Strategy (to be discussed by the Board in June).
        - Will address integrating communications with operations and better aligning internal communications with institutional priorities and policies.
        - Board discussions of the papers under paras. 8 a, b, and c will provide guidance on IMF advice on aid flows, supporting clearer external communication of Fund policies in low-income countries.
- Monitoring progress:
  - Progress in implementation will be reported in the “periodic monitoring report” required following discussion of the external evaluation of the IEO.
- Costing (first-stage estimate):
  - Estimated cost of responding to the IEO Report: US$1.3mn (approximately 6 staff years).
  - The US$1.3mn represents mostly the cost of producing the four policy papers (and associated documents) identified in paragraph 8, and also includes some US$0.25 million attributable directly to the cost of producing the initial staff and management response to the IEO Report, along with this paper and outreach efforts.
  - Costs fall mainly to PDR, FAD, EXR, and AFR.
  - As initiation of work on some policy papers predates Board consideration of the IEO Report, it is not possible to isolate precisely the additional costs attributable to implementing Board-endorsed recommendations; the estimate represents an upper bound.
  - These elements represent the first stage in the Fund’s response; the second stage will follow Board decisions and be the actual implementation phase.
  - Costings for the implementation phase for each specific recommendation endorsed by the Board will be provided in forthcoming papers, though these costings will be tentative.
  - Care will be needed to ensure that the overall resource impact of Board-supported proposals is consistent with the Fund’s medium-term budget framework.

### Communication and implementation alignment; complementary initiatives
- Communication and implementation alignment:
  - Particular attention will be placed on ensuring that communication is aligned with policies and their implementation.
  - Internal communication will be further enhanced through refinement, as appropriate, of staff guidance in light of the aforementioned policy discussions.
- Complementary initiatives and collaboration:
  - Work will be complemented by other initiatives endorsed by the Board.
  - Recent Fund and Bank Management efforts seek to pilot new country-level initiatives on financial sector issues, natural resources, and public financial management.
  - Plans to stage a joint Bank-Fund staff retreat to further dialogue on collaboration issues.
  - Dialogue will help clarify Bank and Fund teams’ country-level work, including with regard to PSIA.
  - Work on Fund assistance to post-conflict countries and fragile states will help clarify Fund policy in such cases.
  - Enhanced training and guidance for mission teams and resident representatives on fiscal issues such as PFM systems and reforms will help disseminate lessons from Fiscal Policy Response to Scaled-Up Aid.

### Next steps and Board feedback
- Directors’ feedback on the implementation plan set out above would be welcome.
- Seeking such feedback, and costing Board-endorsed recommendations (paragraph 10), are both required in the framework established following the External Evaluation of the Independent Evaluation (IEO).

*Source: Implementation Plan in Response to Board-Endorsed Recommendations Arising from the Independent Evaluation Office Report on The IMF and Aid to Sub-Saharan Africa (Policy Development and Review Department; approved June 5, 2007). Section 2: _060507c - Section 2.*

### Section 1

### Implementation Plan in Response to Board-Endorsed Recommendations Arising from the Independent Evaluation Office Report on The IMF and Aid to Sub-Saharan Africa

### I. Introduction — scope and context
- Paper prepared by the Policy Development and Review Department in consultation with other departments; approved by Mark Allen on June 5, 2007.
- Purpose:
  - Sets out the IEO Report recommendations and the Executive Board’s views (Section II).
  - Outlines work streams to respond to Board-endorsed recommendations (Section III).
  - Estimates the cost of the first stage of the Fund’s response; costings for implementation-phase proposals to be provided in forthcoming Board papers.
  - Solicits Directors’ feedback.
- Context:
  - IEO Report surveyed the period from 2000 to 2005.
  - Low-income members’ circumstances have changed: improved macroeconomic outcomes, multilateral and bilateral debt relief initiatives, prospect of increased aid flows, globalization, and sustained trade and capital flows improved the environment for many low-income countries; conflict and negative terms-of-trade shocks increased vulnerabilities in other cases.
  - The Fund responded via the Medium-Term Strategy (MTS) to focus and deepen engagement with low-income members.
  - Ongoing relevant Fund initiatives: Fund-Bank country-level pilots on financial sector issues, natural resources, and public financial management; work on Bank-Fund collaboration.

### II. IEO recommendations and Board reactions — key messages and Director responses
- Overarching lesson from IEO: the “critical importance of operationalizing institutional change.”
- IEO recommendations focused on need for:
  - A reaffirmation of, and clarity on, Fund policies relating to handling of aid inflows.
  - Transparent monitoring and evaluation of policy implementation.
  - Clarification of role and resourcing of resident representatives’ and mission chiefs’ outreach activities.
  - Consistency and clear communication of both stated policy and implementation internally and externally.
- Directors’ response:
  - Welcomed the IEO Report findings and judged it timely in light of MTS work.
  - Noted improved macroeconomic performance in Sub-Saharan African countries over the past decade and recognized the Fund’s contribution through policy advice and actions, while acknowledging exogenous factors and authorities’ efforts.
  - Agreed considerable scope remains to improve the Fund’s work in these countries.
  - Generally supported the IEO recommendations; requested implementation modalities and monitoring (see Table 1 mapping recommendations to follow-up modalities).
- Specific Director views reflected in Table 1 (summarized highlights):
  - A. Fund policies on spending and absorption of additional aid, mobilization of aid, alternative scenarios, PSIA, pro-poor and pro-growth budget frameworks — Directors: reaffirm importance; implementation should be case-by-case and focused on Fund’s core mandate.
  - A.2: Directors confirmed importance of accommodating higher aid flows through higher spending and net imports, provided macroeconomic stability is not jeopardized.
  - A.4–A.5: Distributional policies generally lie outside Fund’s core mandate; PSIA should be conducted by other agencies in the PRSP process; improve Fund collaboration with development partners, particularly the World Bank.
  - A.6–A.7: Support for limited alternative aid scenarios assessing consistency with macroeconomic stability; World Bank and other MDBs should lead on expenditure composition advice.
  - A.8–A.9: Need improved transparency and clear communications by the Fund; ensure institutional communications are consistent with Board-approved operational policies.
  - B. Monitoring and evaluation: Directors welcomed establishing transparent mechanisms for monitoring and evaluating implementation of clarified policy guidance; strengthen ex-post assessments and consider broader stocktaking in PRGF periodic reviews (next PRGF review currently scheduled for 2010).
  - C. Resident representatives and mission chiefs: Clarify expectations and resource availabilities for interactions with local donor groups and civil society; monitor changing aid modalities and decentralization of donor operations; undertake cost-benefit analysis before changing RR roles.
  - D. Communications: Need improved and more realistic Fund communications; greater clarity externally on what the Fund can and cannot do in low-income country work; step-up internal communications to align staff work with institutional priorities.

### III. Implementation plan — work streams, deliverables, and sequencing
- Overall approach:
  - Build on existing work streams linked to the MTS and other ongoing initiatives.
  - Map Board-endorsed recommendations to specific papers and actions (detailed mapping in Table 1).
  - Use timely Board discussions to provide guidance and to inform the IMF’s communication of policies.
- Four broad areas for clarification and corresponding work streams:
  A. Fund policies relating to the handling of aid inflows
    - Primary deliverables:
      - The Role of the Fund in Managing Aid Inflows and Impact on the Design of Fund-supported Programs (slated for Board discussion in June/July).
        - Will clarify Fund policy on: spending and absorption of additional aid; mobilization of aid; alternative scenarios; pro-poor and pro-growth budget frameworks.
      - Fiscal Policy Response to Scaled-up Aid (and accompanying background papers) (slated for Board discussion in June/July alongside the paper above).
        - Will provide the framework for the Fund’s approach to the fiscal challenges of increasing aid flows.
  B. Monitoring and evaluation of implementation of clarified policy guidance
    - Primary deliverables:
      - Review of the staff guidance note on ex post assessments to ensure coverage of staff actions and contributions to implementation of existing and clarified policies.
      - The next review of the PRGF, currently scheduled for 2010; review could be brought forward if necessary, with consideration of resource costs.
  C. Role and resourcing of resident representatives’ and mission chiefs’ interactions with local donors and civil society
    - Primary deliverables:
      - The Role of the Fund in the PRSP and Donor Coordination Processes (slated for Board discussion in the coming months).
        - Will recommend role of resident representatives and mission chiefs in interacting with donors and civil society; consider appropriate means of involving Fund staff in PRSP and donor coordination; identify areas of responsibility and accountability; clarify parameters of Fund involvement in PRSP and donor collaboration processes, MDG support, managing aid inflows and resource fluctuations, and supporting macroeconomically critical structural reforms.
      - The IMF’s Communication Strategy (see D.i) will address broader outreach issues in low-income members.
  D. Need for consistent policy implementation and clear communication internally and externally
    - Primary deliverable:
      - The IMF’s Communications Strategy (to be discussed by the Board in June).
        - Will address integrating communications with operations and better aligning internal communications with institutional priorities and policies.
        - Board discussions of the papers under paras. 8 a, b, and c will provide guidance on IMF advice on aid flows, supporting clearer external communication of Fund policies in low-income countries.
- Monitoring progress:
  - Progress in implementation will be reported in the “periodic monitoring report” required following discussion of the external evaluation of the IEO.
- Costing:
  - The paper estimates the cost of the first stage of the Fund’s response to the IEO Report; costings for implementation-phase proposals will be provided in forthcoming Board papers.

*Source: Implementation Plan in Response to Board-Endorsed Recommendations Arising from the Independent Evaluation Office Report on The IMF and Aid to Sub-Saharan Africa (Policy Development and Review Department; approved June 5, 2007).*

### Section 2

### _060507c - Section 2

### Communication and implementation alignment
- Particular attention will be placed on ensuring that our communication is aligned not only with policies but also with their implementation.
- Internal communication will be further enhanced through the refinement, as appropriate, of staff guidance in light of the aforementioned policy discussions.

### Complementary initiatives and collaboration
- The work outlined above will be complemented by other initiatives in taking forward recommendations endorsed by the Board.
- Recent efforts by Fund and Bank Managements seek to pilot new country-level initiatives on:
  - financial sector issues,
  - natural resources, and
  - public financial management.
- Plans are being developed to stage a joint Bank-Fund staff retreat to further the dialogue on collaboration issues.
- The dialogue will help to clarify the work of the Bank and Fund teams at the country level, including with regard to poverty and social impact analysis (PSIA).
- Work on Fund assistance to post-conflict countries and fragile states will help clarify Fund policy in such sensitive cases.
- Enhanced training and guidance for mission teams and resident representatives on fiscal issues such as PFM systems and reforms should help ensure that the lessons of the work on Fiscal Policy Response to Scaled-Up Aid are effectively disseminated.

### Cost estimate and resource implications
- It is estimated that the cost of responding to the IEO Report is some US$1.3mn (approximately 6 staff years).
- The US$1.3mn represents mostly the cost of producing the four policy papers (and associated documents) identified in paragraph 8, and also includes some US$0.25 million attributable directly to the cost of producing the initial staff and management response to the IEO Report, along with this paper and outreach efforts.
- The costs fall mainly to PDR, FAD, EXR, and AFR.
- As initiation of work on some of the policy papers predates Board consideration of the IEO Report, it is not possible to isolate precisely the additional costs attributable to implementing Board-endorsed recommendations, and hence the estimate represents an upper bound.
- Taken together, these elements represent the first stage in the Fund’s response to the IEO Report.
- The second stage, which will follow Board decisions on the papers outlined above, will be the actual implementation phase.
- Costings for the implementation phase, i.e., for each of the specific recommendations endorsed by the Board, will be provided in the forthcoming papers, though these costings will be tentative.
- Given that these different strands will inevitably be discussed at different times, care will be needed to ensure that the overall resource impact of the proposals that are supported by the Board are consistent with the Fund’s medium-term budget framework.

### Next steps and Board feedback
- Directors’ feedback on the implementation plan set out above would be welcome.
- Seeking such feedback, and costing Board-endorsed recommendations (paragraph 10), are both required in the framework established following the External Evaluation of the Independent Evaluation (IEO).

*Source: _060507c - Section 2*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/2007/eng/_060507c.pdf_