Evaluation of the Ex-Ante Additionality and Development Outcome Assessment Framework 2.0

Independent Development Evaluation (IDEV) at the African Development Bank (AfDB or “the Bank”) has undertaken an evaluation of the Bank’s second Additionality and Development Outcomes Assessment (ADOA) Framework, approved in 2015. The ADOA Framework is a decision-making tool to improve project design and selectivity of the Bank’s Non-Sovereign Operations (NSO) - investment operations that are not guaranteed by any state and are provided on market terms. It assesses two dimensions of NSOs, namely i) additionality, which measures the contribution from the Bank’s private sector interventions that markets do not currently supply, and ii) development outcomes.

The Bank is in the process of revising the ADOA 2.0 Framework, as part of the commitments it made in its 7th General Capital Increase. The evaluation provides evidence of what has worked and what could be improved to inform this revision. It took stock of the implementation of the ADOA 2.0 Framework between 2015 and 2020 and examined its relevance, effectiveness, and efficiency.

Key among the evaluation findings are that the ADOA Framework is relevant for the Bank’s strategies, provides a sound basis for Bank Management and the Board of Directors to approve projects with high additionality, and makes a sound assessment of development outcomes. However, the evaluation found a misalignment between the ADOA indicators and those of project results frameworks. Also, ADOA’s method of assessing additionality might inflate the Bank’s contribution and lower the hurdle for additionality, and in six of ten case studies, claims of additionality were not supported by robust evidence.

Furthermore, the typology of projects used by ADOA in assessing development outcomes no longer matches the Bank’s sectors of intervention, and could be updated. Views on the efficiency of the ADOA process are mixed, with the evaluation suggesting that producing successive ADOA notes may not add much value.

 

Key lessons:

• Having a feedback loop is essential for learning purposes. The fact that the ADOA process stops at Board approval of the transaction and the absence of any meaningful monitoring imply that such a feedback loop is missing.

• Monitoring systems should be designed with the use of monitoring data in mind, to provide the basis for adaptive management and to ensure that corrective actions are taken for projects at risk.

• The provision by ADOA notes of discriminatory assessments is essential for decision-makers. Shortcomings in methodological soundness should be addressed to ensure that ADOA assessments form a sound basis to inform decision-making.

 

The evaluation makes the following recommendations:

• Further improve the ADOA’s assessment of additionality. The ADOA Framework should revisit its unique approach of considering only the collective additionality of all participating Development Finance Institutions. Instead, it should emphasize the totality of the Bank’s additionality. Furthermore, the Framework should give greater prominence to the mobilization of private finance.

• Strengthen the ADOA’s assessment of development outcomes. The Bank should develop theories of change for the full spectrum of sectors covered by the Bank and identify the types of outcomes and indicators that would normally be expected to arise from these projects. In addition, the Framework should pay greater attention to projects’ distributional effects and the extent to which the transaction serves under-served segments of the market.

• Ensure data availability for better project preparation, decision-making and monitoring. All related documents, notes prepared, supporting documents (including back to iffice reports, filled client questionnaires and meeting minutes) and computations should be archived in a single location for each project assessed.

Task Manager: Latefa Camara, Evaluation Officer, IDEV.1