Independent Evaluation of Afghanistan Rural Enterprise Development Programme(AREDP) and RED-Helmand Projects

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Evaluation Plan:
2010-2014, Afghanistan
Evaluation Type:
Project
Planned End Date:
04/2014
Completion Date:
03/2014
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
30,000

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Title Independent Evaluation of Afghanistan Rural Enterprise Development Programme(AREDP) and RED-Helmand Projects
Atlas Project Number: 00070832
Evaluation Plan: 2010-2014, Afghanistan
Evaluation Type: Project
Status: Completed
Completion Date: 03/2014
Planned End Date: 04/2014
Management Response: Yes
Focus Area:
  • 1. Others
Corporate Outcome and Output (UNDP Strategic Plan 2014-2017)
  • 1. Output 6.4. Recovery processes reinforce social cohesion and trust and enable rapid return to sustainable development
Evaluation Budget(US $): 30,000
Source of Funding: Project's own funding
Joint Programme: No
Mandatory Evaluation: No
Joint Evaluation: No
Evaluation Team members:
Name Title Email Nationality
Erik Lyby Evaluation Team Leader
Sayed Ahmad Rohani Evaluation Member
GEF Evaluation: No
Key Stakeholders: Ministry of Rural Rehabilitation and Development
Countries: AFGHANISTAN
Lessons
Findings
Recommendations
1 Recommendation 1: RED-Helmand is granted a no-cost extension by DFID to 31. December 2014 to complete its current work with the SMEs.
2 Recommendation 2: REDKAN and RED-Helmand prepare an exit strategy by 30. April 2014 and communicate it widely to SGs, EGs and SMEs. The exit strategy should include, inter alia: - Maximum enrolment of women in literacy classes. This is an effective strategy to enhance the results in Component A; there is sufficient budget available to make this an offer to all female members of enterprise groups. - No new groups or SMEs should be included for project assistance after 30. June 2014. - Focus on consolidation and sustainability of what has been learnt (not new initiatives). - Collect lessons learnt at outcome level for inclusion in AREDP Phase II. This is especially the case with lessons from the outsourcing of Component A which has been successful.
3 Recommendation 3: Commercial farming is excluded from the definition of SME in AREDP II. The needs of the agricultural sector are different from SMEs and are not well catered for in the AREDP setup. Instead it is recommended that MRRD and UNDP will actively encourage the Government to formulate an enabling policy environment for the agriculture sector.
4 Recommendation 4. Continue livelihood support through lessons learned from Component A; reduce expectations with regard to the commercial potential of this component; rather see it as means of poverty reduction.
5 Recommendation 5: Encourage the Government to develop a national policy for sharia-compliant banking. The absence of suitable banking products is a main obstacle for the expansion of rural enterprises.
6 Recommendation 6: 6. Give priority to the following SMEs in AREDP II: o Non-farm rural enterprises that directly support agriculture (upstream & downstream). These can include: improved seeds, plant nurseries, milling, processing, grading, equipment hire and repair, transport, packing, storage, etc. o Urban SMEs with growth potential o SMEs in sectors with limited need for finance capital ? to avoid the need for non-available banking products.
7 Recommendation 7: Support enterprise development though institution strengthening and policy dialogue, especially in favour of: - Policy development in order to increase Afghan enterprises? competitiveness and remove obstacles to local production and trade - Strengthening Technical and Vocational Education and Training (TVET) institutions to be able to meet demand for skills in the labour market; make entrepreneurship and BDS part of TVET curriculum. Consult ILO on this component. - Support the establishment and/or strengthening of agricultural research & extension stations and rural technology centres at district level, to become service centres for farmers and SMEs through exposure to new crops, methods and technologies, extension services, and disease control in livestock and plants. Consult FAO on this component.
8 Recommendation 8: Support poverty reduction and gender equality directly through support to livelihoods through AREDP-type Savings Groups, Savings and Credit Cooperatives (SACCOs), or other self-help modalities, as stand-alone donor-funded projects. Consult ILO on SACCOs for small enterprises. In the absence of any effective security nets there will be a need for such projects for a long time to come as an addition to the long-term institutional development. Use a direct implementation modality with full outsourcing to reputable local or international consulting firms or NGOs through competitive bidding, ensuring a low profile free of UN bureaucracy and security.
1. Recommendation: Recommendation 1: RED-Helmand is granted a no-cost extension by DFID to 31. December 2014 to complete its current work with the SMEs.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

AREDP presented the case of Helmand on no-cost extension beyond March 31st, 2014 to DIFD in the Project Board Meeting held in MRRD in Dec 2013. Despite several requests from both UNDP and MRRD, DFID did not agree with the extension saying that the project has achieved its targets; hence, MRRD had to close down Helmand Project and terminate the all the staff as of end of March 2014.

Key Actions:

2. Recommendation: Recommendation 2: REDKAN and RED-Helmand prepare an exit strategy by 30. April 2014 and communicate it widely to SGs, EGs and SMEs. The exit strategy should include, inter alia: - Maximum enrolment of women in literacy classes. This is an effective strategy to enhance the results in Component A; there is sufficient budget available to make this an offer to all female members of enterprise groups. - No new groups or SMEs should be included for project assistance after 30. June 2014. - Focus on consolidation and sustainability of what has been learnt (not new initiatives). - Collect lessons learnt at outcome level for inclusion in AREDP Phase II. This is especially the case with lessons from the outsourcing of Component A which has been successful.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

AREDP has developed the exit strategy of staying with communities and SMEs for some time and gradually handing over to communities. Literacy classes: AREDP is trying for maximum women enrolment in literacy classes. Due to the budget limitations under REDKAN to fund the second phase of women literacy classes; AREDP is in communication with World Bank to launch the second phase of women literacy classes. No new groups or SMEs: AREDP has been following the recommendations of the evaluation team and instead enrolling new groups AREDP is focused working with the exiting groups. AREDP after June, 2013, does not have any plan to include new group or SMEs for project assistance. It will rather focus on capacity building and consolidation of existing groups/SMEs and their sustainability. Focus on consolidation and sustainability: To have focus on sustainability, AREDP has developed the strategy for REDKAN of staying with communities and SMEs for some time and gradually handing over to communities. In this regard, AREDP will shift its staff to Business Development Service Providers (BDSP), a new concept in AREDP. These BDSPs will not receive their remuneration as payroll staff of AREDP (formerly Business Development Service Officers, Village Facilitators and Provincial Facilitators), but will be paid against deliverables. AREDP will select these BDSPs among the experienced and qualified staff of AREDP with the experience of working with EG and SMEs. Collect lessons learnt at outcome level for inclusion in AREDP Phase II: AREDP is working towards incorporating the lessons learnt at outcome level for inclusion in AREDP Phase II.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Recruitment of BDSPs
[Added: 2014/07/20] [Last Updated: 2014/12/23]
AREDP 2014/12 Completed REDKAN has already transformed Provincial and Village Facilitators to Business Development Service Providers (BDSP). Through BDSP?s, REDKAN will ensure long term sustainability of the enterprises, as local service providers will be in a position to offer technical knowledge to community groups. The BDSPs will be working as local consultants getting paid upon deliverable. The more they work the more they earn. Apart from everything else we are building a cadre of private sector development experts who will be based where their services are needed most. This is a pioneering concept that has proved very successful in cascading business services to the rural areas and villages. At the same time it has relieved the payroll and other administrative burden. This is especially important looking into the future and the possibility of reduced donor support to pay for these kind of interventions. Another important factor is that the work already done will continue beyond the project unlike in many other instances where groups collapse on the donors exit. Sustainability is being inbuilt.
Communication with Donors for second phase of women literacy courses
[Added: 2014/07/20] [Last Updated: 2015/04/19]
AREDP 2015/02 Completed The process is completed, the project is extended till end of Dec 2015. the project will focus on capacity building and consolidation of existing groups/SMEs and their sustainability within its extended period.
3. Recommendation: Recommendation 3: Commercial farming is excluded from the definition of SME in AREDP II. The needs of the agricultural sector are different from SMEs and are not well catered for in the AREDP setup. Instead it is recommended that MRRD and UNDP will actively encourage the Government to formulate an enabling policy environment for the agriculture sector.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

AREDP (RED Helmand) ended in March 31st 2014 and REDKAN will end by the end of the current year 2014. So, it?s not envisaged at this time whether UNDP will be involved in AREDP II. However, UNDP is in the stage of designing a new programme in the sector of sub-national governance and development/livelihood that will follow on its current interventions i.e. NABDP, AREDP (KAN and Helmand) and ASGP. It is envisaged that the new programme will have an expanded partnership involving the Ministry of Agriculture, Irrigation and Livestock (MAIL) and Ministry of Commerce among other relevant partners. This will enable UNDP to take the above recommendation into consideration, highlight this to the relevant partners making appropriate decision. AREDP as part of MRRD is working in collaboration with MAIL in designing a project for Market and private sector development as a part of the commercial farming to achieve the objectives of National Priority Program (NPP2). While MAIL will work towards Agricultural extension services, AREDP will focus on private sector and market development.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Discuss with MAIL, Ministry of Commerce and FAO during the new programme consultations
[Added: 2014/07/20] [Last Updated: 2014/12/23]
Sub-national Governance Unit 2014/09 Completed The new programme design mission held consultative meetings with MAIL, MOCI and FAO to receive their inputs for the upcoming programme on local economic development and livelihood.
Design of new programme document for sub-national governance and local development
[Added: 2014/07/20] [Last Updated: 2015/04/19]
Sub-national Governance Unit 2015/05 Completed The new project document for Local Economic Development of Afghanistan (LEDA) is designed. The ProDoc is scheduled to get PACed by early May 2015.
4. Recommendation: Recommendation 4. Continue livelihood support through lessons learned from Component A; reduce expectations with regard to the commercial potential of this component; rather see it as means of poverty reduction.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

Both RED-KAN and RED-HELMAND were considered pilot interventions for UNDP in the rural livelihood sector. The lessons learned from the two projects including the one recommended here have been compiled systematically through several means such as quarterly/bi annual/ annual progress reports, midterm review or evaluations. The lessons learned (specifically the one recommended here) are to be considered during the design of the new programme document for sub-national governance and development of UNDP.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Discuss with MAIL, Ministry of Commerce and FAO during the new programme consultations.
[Added: 2014/07/20] [Last Updated: 2014/12/23]
Sub-national Governance Unit 2014/09 Completed The new programme design mission held consultative meetings with MAIL, MOCI and FAO to receive their inputs for the upcoming programme on local economic development and livelihood.
5. Recommendation: Recommendation 5: Encourage the Government to develop a national policy for sharia-compliant banking. The absence of suitable banking products is a main obstacle for the expansion of rural enterprises.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

Both UNDP and AREDP, considering the Sharia-compliant banking as the most acceptable financial/banking instrument in the context of rural Afghanistan. To support this at the policy level, for its future sub-national development intervention, UNDP?s new programme document design mission has been in close consultation with the various possible stakeholders i.e. MRRD/AREDP/NABDP, MoCI, CoC, MISFA, MoF. So to feed its new programming with their feedback/recommendations and to find the appropriate partner. Moreover, AREDP, based on its four years of experience with rural enterprises has developed Sharia-compliant products that is being implemented by its Access to Finance Department for further expansion of Islamic Banking to rural enterprises.

Key Actions:

6. Recommendation: Recommendation 6: 6. Give priority to the following SMEs in AREDP II: o Non-farm rural enterprises that directly support agriculture (upstream & downstream). These can include: improved seeds, plant nurseries, milling, processing, grading, equipment hire and repair, transport, packing, storage, etc. o Urban SMEs with growth potential o SMEs in sectors with limited need for finance capital ? to avoid the need for non-available banking products.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

UNDP agrees with the above recommendations. As also mentioned in the the management response for recommendation 3 and 4, both Red-Helmand and Red-KAN are closing by end of 2014. At the moment, it is not known, whether UNDP will directly work with AREDP II or it will intervene under a new programme/modality with the relevant government entities. The majority of the AREDP-I is being funded by the World Bank (WB), so it is highly probable that the second phase will be entirely funded by WB, too. However, the recommendation will be considered during the consultations for the formulation of the local economic development project within the framework of new programme on Sub-national governance and local development.

Key Actions:

7. Recommendation: Recommendation 7: Support enterprise development though institution strengthening and policy dialogue, especially in favour of: - Policy development in order to increase Afghan enterprises? competitiveness and remove obstacles to local production and trade - Strengthening Technical and Vocational Education and Training (TVET) institutions to be able to meet demand for skills in the labour market; make entrepreneurship and BDS part of TVET curriculum. Consult ILO on this component. - Support the establishment and/or strengthening of agricultural research & extension stations and rural technology centres at district level, to become service centres for farmers and SMEs through exposure to new crops, methods and technologies, extension services, and disease control in livestock and plants. Consult FAO on this component.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

The recommendations are noted and to the extent possible will be considered during the discussion and consultations on the new program on Sub-national governance and local development. Since AREDP (KAN and Helmand) ends in 2014, and the follow on programme design is still in progress.

Key Actions:

8. Recommendation: Recommendation 8: Support poverty reduction and gender equality directly through support to livelihoods through AREDP-type Savings Groups, Savings and Credit Cooperatives (SACCOs), or other self-help modalities, as stand-alone donor-funded projects. Consult ILO on SACCOs for small enterprises. In the absence of any effective security nets there will be a need for such projects for a long time to come as an addition to the long-term institutional development. Use a direct implementation modality with full outsourcing to reputable local or international consulting firms or NGOs through competitive bidding, ensuring a low profile free of UN bureaucracy and security.
Management Response: [Added: 2014/05/20] [Last Updated: 2014/07/20]

Similar to response to the recommendation number 7; the recommendation is noted and to the extent possible will be considered during the discussion and consultations on the formulation of the new programme on Sub-national governance and local development.

Key Actions:

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