Statusrapport
The International Monetary Fund’s managing natural resource wealth thematic fund – phase II (MNRW-II) : Desentralisert evaluering/Norad Collected Reviews 8/23
The Managing Natural Resource Wealth Trust Fund (MNRW-TF) is a multi-partner fund established in 2011 by the International Monetary Fund (IMF) to build capacity in low- and lower-middle income countries in managing wealth from oil, gas and mining. The TF is overseen by a Steering Committee (SC) comprising IMF and key donor staff. It is endowed with an approximate budget of $30M. This report is the mid-term review of Phase II of the TF (MNRW-II), which has been under implementation since 2017. It covers progress to September 2021. It was guided by the OECD DAC criteria and informed by document review, interviews and surveys targeting relevant stakeholders in a sample of six countries and five multi-country projects. Overall, we rate the TF a 3 (a “good” in the IMF Results Based Management Framework scale) given notable progress despite the difficult context of the Covid-19 pandemic, further compounding absorption capacity challenges that affect the LICs targeted under the TF. The TF has high relevance to key resource management challenges, except for work on monetary and macroprudential policy and central bank operations (module 4), which was disconnected from specific management challenges that governments face from large, and often unpredictable, resource revenue-related cash flows. MRNW-II interventions were also found to be highly relevant to the evolving needs of target authorities. While reviewed interventions were relevant, it was not clear why work on some themes in a given country was prioritized over others. Country strategies are needed to clarify this and make more explicit the links to national development plans and the assistance provided by other development partners. Finally, the TF has seen incipient focus on climate change and gender, but this has been narrow in scope. An acceleration on these areas is possible, and particularly urgent around energy transition issues. In terms of coherence, except for module 4, we found good coherence within the MNRW and with broader IMF work not funded by the TF. In terms of external coherence, good synergies were identified with other development partners, with areas for improvement noted, especially on the need to resume in person coordination meetings with key players after the end of the pandemic. A key strength of the TF lies in its systematic promotion of interagency coordination at the country level. This “whole government” approach is essential to addressing the interrelated governance challenges that affect resource-rich countries. In terms of effectiveness, our review surfaced improvements in i) beneficiary capacity, as also evidenced by improvements in knowledge tests, ii) systems and processes, with notable progress in building data and models that support evidence-based policy making, and iii) in the design and implementation of policies and laws. Beneficiaries deemed that the IMF contribution to these achievements was high. In terms of efficiency, training and technical assistance were of high quality and well sequenced overall. The TF made proactive efforts to adjust to the onset of the Covid pandemic, but virtual delivery, while appreciated by beneficiaries, did not work as well as in-person assistance. TF spending is lagging, mostly due to country circumstances and the impact of the pandemic. Improvements are possible in terms of budget practice, including to prevent inflated budgets that lead to poor allocation of resources. Despite encouraging progress in improving resource management, it is difficult to observe how these gains translate into impact, i.e., overall improvements in economic development of poverty reduction). There are attribution problems and lags. This said, there are important multiplier effects from this program on other players that ensure that MNRW-II gains are amplified and reach a higher number of countries and beneficiaries. Specifically, through FARI, the IMF has had a sizable influence on modeling practice in the sector. Finally, sustainability is undermined by absorption capacity issues such as lack of resources and limited ability to tap into and retain capable staff. This in turn calls for continuous support and tweaks to the IMF HQ mission model to strengthen country level support in between missions. In terms of strategy and management, the TF has applied its country eligibility criteria with flexibility and assistance has been deployed outside LICs where a case could be made. There are tradeoffs in maintaining a focus on LICs that should be considered by the SC. The SC is playing its role well but a refocus on discussing strategic issues is seen as important by both IMF and donor representatives. Finally, the SC has facilitated global and country level coordination, but improvements are possible, for instance by better leveraging the SC for coordination with the World Bank. In terms of recommendations, we present here the top 5 recommendations in order of priority (the full report presents all 10 recommendations). 1. Climate change is an urgent challenge. The MNRW can do more. We recommend that the IMF develops a strategy paper for SC discussion with options to bolster MNRW focus on energy transition, mindful or the TF comparative advantage, and accounting for broader IMF climate work to harness synergies or establish clear demarcation. 2. The rationale for choosing workstreams needs to be anchored in country strategies that identify key policy gaps and resulting action priorities, how these align with country development plans and the work of other development partners or broader IMF work. 3. Limited financial resourcing, low staff capacity, and staff turnover jeopardize program gains. Continuity of support is necessary. This calls for RCDCs to assume an advisory role around tax policy advice, the bulk of MNRW assistance, and for a move from short-term assistance to long-term support modalities. In this vein, we note clear gains from the use of peripatetic advisers, a key innovation under phase II. 4. The TF can make better use of the Steering Committee for strategic guidance. This requires providing digestible information and key strategy questions for discussion at SC meetings as well as evidence of how SC inputs have been taken on board in practice. 5. The MNRW needs to increase transparency of budgeting and spending. In the immediate, spending reports should be organized along both project and functional lines and against revised and original budgets. Functional line reporting (e.g., staff costs, STX, workshops, travel etc.) will allow for a clearer understanding of which inputs/outputs are absorbing the bulk of financial resources and allow users to compare between modules and projects (or external benchmarks) for more detailed analysis. Project leads should be required to explain any end of project reallocation that exceeds 20% of the original budget to mitigate occurrences of inflated project budgets and late reallocations that divert resources form other more pressing endeavors.