ADB Focusing on Improving Portfolio Performance to Enhance Aid Effectiveness in Nepal

KATHMANDU NEPAL - After steady deterioration in the past four years, ADB's portfolio performance in Nepal improved significantly this year, the organization's country director in Nepal said, in an end of year press conference.

ADB has focused increasingly on managing for development results, harmonizing business processes, and improving portfolio performance, to enhance aid effectiveness, said Sultan Hafeez Rahman, who heads ADB's Nepal Resident Mission (NRM).

Mr. Rahman highlighted that despite a difficult political and security situation, ADB has intensified its monitoring and assessments of portfolio performance. Contract award ratio, disbursement ratio and net resource transfer are the key measures to gauge portfolio performance. "The decline in these indicators over the past five years has been reversed due to our results oriented approach," said Mr. Rahman.

He pointed out that political instability, frequent changes of government and the resulting transfer of senior government officials and project staff, and slow decision making in the government were the key factors contributing to poor portfolio performance. "ADB's assessments show that impacts of the security situation on project implementation are less than these factors." He added, "weak institutional capacity of executing and implementing agencies and a slowdown in decision making, especially on procurement and policy reforms, are major constraints to achieving better development results."

To achieve better aid effectiveness, ADB is focusing on implementing the results-based country strategy and program (RB-CSP) approved in October 2004. At the core of the RB-CSP is the results framework, which permits the management, implementation, monitoring and evaluation of the RB-CSP.

"ADB's support for Nepal's reform and poverty reduction agenda will continue in view of widespread poverty and vulnerability in the country," said Mr. Rahman. "However, we will remain very cautious going forward to ensure that our assistance is delivered effectively and safely. ADB will continue to work in close partnership with all development partners of Nepal."

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