ISLAMABAD - Despite spending billions of rupees under Southern Punjab Poverty Alleviation Project (SPPAP) the incidence and intensity of multidimensional poverty in four districts of south Punjab have not significantly declined since 2010.

The observation regarding impact of the programme on poverty reduction was made by Poverty Alleviation and SDGs section of the Planning Commission on the 3rd revised PC-I of the Southern Punjab Poverty Alleviation Project (SPPAP). The project is jointly funded by the government of Punjab, International Fund for Agricultural Development (IFAD) and community organizations.

The International Fund for Agricultural Development (IFAD) who is the main financier of the SPPAP has also revised lending terms for Pakistan, from highly concessional to blend terms with service charges of 0.75 percent and interest rate of 1.25 percent (previously it was zero percent interest rate and service charges 0.75 percent), official documents available with The Nation.

The 3rd revised PC-I of the SPPAP was approved by CDWP last month at the cost of Rs 15524.584 million (US $112. 684 million) including Rs 13,990.705 million (US $ 101.424 million) IFAD share and Rs 1132.304 million by the government of Punjab and Rs 401. 574 million contribution from the beneficiaries.

The project was revised because the sponsor asked for two years extension in protect period till March 2023, because of appreciation in US dollar exchange rate (additional rupee available of Rs 1850 million ), provision of additional financing of US$ 39.4 million by IFAD, and Inclusion of four new districts (Layyah, Bhakkar, Mianwali, Khushab) and change in scope of work.

IFAD revises lending terms for Pakistan

Third revision of project made due to change in exchange rate, inclusion of four new districts

The overall objective of the project is to make contribution for reduction in poverty in Southern Punjab region. The project aims to increase the income of poor households by increasing agricultural productivity, improved livelihood opportunities, Improve community physical infrastructure and level of skills through vocational trainings especially for women.

Original Project was approved by ECNEC in May 2011 at a cost Rs 4 136.06 million including IFAD loan of Rs 3.370.872 million (US $ 40.13 million). First revised PC-I was approved by ECNEC in September 2016 at Rs 4657.957 million including IFAD loan of Rs 4140.397 million (US $ 40 million). Second revision in the project was approved by ECNEC in March 2018 at a cost of Rs 7565.78 million Including IFAD share of Rs 6550 million (US $62.37 million).

Commenting on the revised PC-I of the project the Poverty Alleviation & SDGs Section of the planning commission observed that both the incidence and intensity of multidimensional poverty in four originally targeted districts have not significantly declined since 2010. This trend further necessitates the need for detailed impact evaluation of the project prior to approval of-the revised PC-I.

The Poverty Alleviation & SDGs Section further commented that the project is funded by IFAD revised loan amount of US $ 101.424 million (90%) as compared to the original commitment of USD 40 million. The targeting strategy under the project is composed of three elements: geographical targeting, poverty level and gender and youth targeting. Target group are those households registered within the Poverty Score Card band of 0-23 (extremely, chronically and transitory poor). Project document says, “The specific attention is placed on extremely poor households falling within the band 0-11. Surprisingly, no third-party evaluation of the first phase of the project has been cited in the revised PC-l specifically mentioning that how many households earlier in the extremely poor band have successfully made a transition to chronically and transitory poor bands under the project. Government of Punjab has though carried out third party validation of the project but that is not sufficient for strong rationale for continuation of the project. Furthermore, those who do not have CNIC remain outside of the BISP. What strategy the project employs to include these poor?”

In its comment the technical section of the planning commission said that the 2nd revision of the project was approved by the ECNEC on 7th March 2018 till FY 2021.

The sponsors have brought 3rd revision of project on basis of additional financing of USD 39.4 million by IFAD. It is, therefore, proposed that current phase of the project might be closed by 2021 and a new project or phase-II might be brought for 4 new districts (Layyah, Bhakkar, Mianwali, Khushab).

The sponsors may carry out impact assessment of in terms of reduction in poverty in these districts and lesson learnt out of the current phase may be utilized to increase benefits for targeted population.

The project is being implemented from FY 2011 and it has already been revised two times by ECNEC, it is therefore proposed that monitoring of completed activities may be carried out by the Government of Punjab and report may be submitted before third revision of the project, in order to assess the impact of the project in the targeted areas.

The participation of community organization would enhance accountability in the project activities. Measures should be taken to increase the awareness among community for proper monitoring to protect activities both in physical and financial terms.

The unit cost of vocational trainings and community physical infrastructure schemes (Drinking water supply, drainage, sanitation and access to roads) has gone up at a higher rate in 3rd revised PC-l. Such an increase in the cost may be justified/rationalized by the sponsors in the revised PC-l. The sponsors should justify purchase of new vehicles.