Evaluation of the Bank's Country oftheBank'sCountry Evaluation Strategy andProgram Strategy Summary Report Summary 2002–2015 Zambia: October 2016

An IDEV Country Strategy Evaluation IDEV conducts different types of evaluations to achieve its strategic objectives

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(Public Sector)

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Thematic Evaluations Project Cluster Evaluations

Project Performance Evaluations

(Private Sector)

Corporate Evaluations Regional Integration Strategy Evaluations

Country Strategy Evaluation

Country Strategy Evaluations Evaluation of the Bank's Country oftheBank'sCountry Evaluation Strategy andProgram Strategy Summary Report Summary 2002–2015 Zambia: October 2016

An IDEV Country Strategy Evaluation ACKNOWLEDGMENTS Task manager Madhusoodhanan Mampuzhasseril, Principal Evaluation Officer Team members Erika Maclaughlin, Long Term Consultant, Foday Turay, Chief Evaluation Officer, Latefa Camara, Long Term Consultant, James Sackey, Consultant Consultant Agrer S.a. - N.v., Belgium. Paolo Liebl Von Schirach, Team Leader. Members: Baptiste Forquy, Habtom Asmelash, Bernd Drechsler, John Murphy, Charles Haanyika, Vikramdityasing Bissoonauthsing External peer reviewer Bruce Murray, former Director General, Operations Evaluation Department, Asian Development Bank Knowledge management officers Jayne Musumba, Principal Knowledge Management Officer Jerry Lemogo, Junior Consultant, Communications and Knowledge Management Special thanks to Norad – The Norwegian Agency for Development Cooperation Division manager Samer Hachem Evaluator-General Rakesh Nangia

© 2016 African Development Bank Group All rights reserved – Published October 2016

Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report IDEV Country Strategy Evaluation, October 2016

Disclaimer Unless expressly stated otherwise, the findings, interpretations and conclusions expressed in this publication are those of the various authors of the publication and are not necessarily those of the Management of the African Development Bank (the “Bank”) and the African Development Fund (the “Fund”), Boards of Directors, Boards of Governors or the countries they represent. Use of this publication is at the reader’s sole risk. The content of this publication is provided without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, and non- infringement of third-party rights. The Bank specifically does not make any warranties or representations as to the accuracy, completeness, reliability or current validity of any information contained in the publication. Under no circumstances including, but not limited to, negligence, shall the Bank be liable for any loss, damage, liability or expense incurred or suffered which is claimed to result directly or indirectly from use of this publication or reliance on its content. This publication may contain advice, opinions, and statements of various information and content providers. The Bank does not represent or endorse the accuracy, completeness, reliability or current validity of any advice, opinion, statement or other information provided by any information or content provider or other person or entity. Reliance upon any such opinion, advice, statement, or other information shall also be at the reader’s own risk.

About the AfDB The overarching objective of the African Development Bank Group is to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction. The Bank Group achieves this objective by mobilizing and allocating resources for investment in RMCs and providing policy advice and technical assistance to support development efforts.

About Independent Development Evaluation (IDEV) The mission of Independent Development Evaluation at the AfDB is to enhance the development effectiveness of the institution in its regional member countries through independent and instrumental evaluations and partnerships for sharing knowledge.

Independent Development Evaluation (IDEV) African Development Bank Group AfDB Headquarters Avenue Joseph Anoma, 01 BP 1387, Abidjan 01, Côte d’Ivoire Phone: +225 20 26 20 41 E-mail: [email protected] idev.afdb.org

Design & layout: CRÉON – www.creondesign.net Original language: English – Translation: AfDB Language Services Department Contents

Acknowledgments ii Abbreviations and Acronyms v Executive Summary 1 Management Response 9

Introduction 22

Background 23 Economic Context 23 Social Context 24 Development Challenges 24

Overview of the Bank's Country Strategies and Portfolio 26 Overview of Strategic Priorities 26 Project Portfolio 26

Evaluation Approach and Methodology 29 Evaluation Issues and Questions 29 Methodology and Lines of Evidence 29

Evaluation Findings 30 Relevance 30 Effectiveness 32 Efficiency 45 Sustainability 49 Crosscutting Themes 52 Quality at Entry 55 Supervision 58 Leveraging and Co-financing 59

Conclusions and Recommendations 61 Annexes 67 Contents

List of Figures Figure 1 Number of operations and amount approved (2002–2015) 27 Figure 2 Number of operations and amount for sectors (2002–2015) 27 Figure 3 Zambia Corruption Perceptions Index scores (2007–2015) 37 Figure 4 Zambia CPIA Scores - Accountability Transparency and Corruption (2007–2015) 37 Figure 5 Ease of Doing Business Indicators (number of days) 38 Figure 6 No. of new businesses registered during 2007-2015 42 Figure 7 Domestic credit to the private sector (percent GDP) 2006-2014 42 Figure 8 Access to improved water and sanitation source 44 Figure 9 Disbursement Ratios – Zambia and AfDB (2008-2014) 48

List of Tables Table 1 Relevance rating 30 Table 2 Effectiveness rating 32 Table 3 PEFA Scores - Procurement and External Audit 36 Table 4 Progress on key PEFA indicators 39 Table 5 Planned and Delivered Knowledge Work 40 Table 6 Progress against selected macroeconomic indicators 43 Table 7 Progress on selected health and education indicators (2002-2014) 45 Table 8 Relevance rating 46 Table 9 Sustainability rating 49 Table 10 Regional Tariff Levels 51 Table 11 Crosscutting Issue Rating 53 Table 12 Operational selectivity in Zambia CSPs 56 Abbreviations and Acronyms v

Abbreviations and Acronyms

ADB African Development Bank IMF International Monetary Fund ADF African Development Fund ITPC Itezhi-Tezhi Power Corporation CEDR Comprehensive Evaluation of the Bank's JASZ Joint Assistance Strategy for Zambia Development Results JICA Japanese International Cooperation CETZAM Christian Enterprise Trust of Zambia Agency CPIA Country Policy and Institutional MoFNP Ministry of Finance and National Assessment Planning (Zambia) CSP Country Strategy Paper MPSAs Ministry, Provinces and Spending Agencies CSPCR CSP Completion Report MSME Micro Small and Medium Enterprises CWMIP Community Water Management Improvement Project NRWSSP National Rural Water Supply and Sanitation Project DAC Development Assistance Committee OAG Office of the Auditor General DAPP Development Assistance from Person to Person OECD Organization for Economic Cooperation and Development DO Development Objective PAF Performance Assessment Framework EPC Engineering, Procurement and Construction PCGF Partial Credit Guarantee Facility Country Strategy Evaluation ERB Energy Regulation Board PEFA Public Expenditure and Financial Accountability ESMP Environmental and Social Management Plan PEMFA Public Expenditure Management and An IDEV Financial Accountability FI Financial Intermediary PPA Power Purchasing Agreement FNDP Fifth National Development Plan PPP Public-Private Partnership GNP Gross National Product PRBS Poverty Reduction Budget Support GDP Gross Domestic Product PRODAP Project to Support Lake Tanganyika GRZ Government of Republic of Zambia Integrated Regional Development HIPC Highly Indebted Poor Countries Program HRH Human Resources for Health RDA Roads Development Agency ICT Information Communication Technology SIP Small Scale Irrigation Project IFMIS Integrated Financial Management SME Small and Medium Enterprises Information System SNDP Sixth National Development Plan vi Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

TA Technical Assistance ZANACO Zambia National Commercial Bank Plc. TSA Treasury Single Account ZCCM Zambia Consolidated Copper Mines UA Unit of Account (of African Development ZESCO Zambia Electricity Supply Corporation Bank) ZMFO Zambia Field Office (of the African USD US Dollar Development Bank) WHO World Health Organization ZMW Zambian Kwacha WSS Water Supply and Sanitation ZPPA Zambia Public Procurement Agency XSR Extended Supervision Report Executive Summary 1

Executive Summary

This report presents a summary of findings, four studies, three emergency operations and two conclusions and recommendations from an technical assistance grants. In addition to these evaluation of the Bank's Country Strategies and national operations, there were 19 multinational Program in Zambia over the period 2002–2015. The operations amounting to UA 373.25 million where evaluation was conducted to support the preparation Zambia was involved in varying degrees. The of the Zambia Country Strategy 2016–2020 and evaluation focused on national projects and examined contribute to IDEV's comprehensive evaluation of the regional projects only where there was a tangible Bank's development results (CEDR). The evaluation national component. Over the years, the portfolio seeks to assess the relevance and performance of has grown in terms of numbers and the amount the Bank's strategic interventions in Zambia and committed. The majority of the Bank's support by identify findings, conclusions and recommendations value has been in the transport, power, WSS and to inform strategies and operations going forward. agriculture sectors (31.7 percent, 19.3 percent, 14.3 percent and 10.9 percent respectively). Zambia Country Strategies. The evaluation covers three Country Strategy Papers (CSPs) that is, the 2002–2004 CSP, extended to 2006; the 2007– Evaluation Findings 2010 Joint Assistance Strategy for Zambia (JASZ); and the 2011–2015 CSP. The 2002-2004 strategy Relevance emphasized agricultural development, access to water supply and sanitation and the promotion of Relevance was assessed as satisfactory. The child welfare. Under the JASZ, strategic emphasis on Bank's CSPs were aligned with Zambia's national infrastructure development to support the agricultural development plans. The Bank’s operational Country Strategy Evaluation sector was retained in addition to the promotion of priorities reflected national development priorities accountability and transparency in the management and the Bank's comparative advantages. This of public resources through general budget support. alignment is evident from the general budget An IDEV The 2011–2015 CSP signaled a shift in the Bank's support to address financial and budgetary priorities, with infrastructure development now transparency and accountability as identified in the placing greater emphasis on regional integration, 2005–2006 CSP update. The 2007 JASZ reflected particularly with regard to transport and power the GRZ's emphasis on good governance as per infrastructure. In fact, the Bank's policy-based the Fifth National Development Plan (FNDP). The operations have evolved to target private sector 2011–2015 CSP's emphasis on the development regulatory reforms aimed at increasing access to of economic infrastructure, including domestic finance. and regional transport and power infrastructure, reflected the objectives of the Sixth National Portfolio. During the 2002–2015 period, the Bank Development Plan (SNDP). Interventions targeting approved a total of 43 operations amounting to UA improved economic and financial governance 947.84 million net of cancellations. The portfolio reflect the priorities of Zambia's Vision 2030 and of projects under review comprises 34 projects, the Revised SNDP. 2 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

The alignment of projects with Country Strategies of outputs. About 50 percent of the physical works was rated satisfactory overall. Alignment of the were completed for the Nacala Corridor project private sector operations, despite targeting job by the end of September 2015, but 95 percent creation and economic development under the of the original project timeframe had elapsed. 2002–2004 CSP and the 2007–2010 JASZ, The Kazungula Bridge project was delayed due to were constrained by the practice of identifying procurement issues. At the end of the evaluation operations ‘opportunistically.’ However, private period, just 0.98 percent of the project funds had sector operations were better aligned under the been disbursed, 41 months after the approval of the 2011–2015 CSP. Social sector projects, on project. Nonetheless, these projects will most likely the other hand, did not always reflect the CSP achieve their intended outcomes. priorities. Although the 2002–2004 CSP targeted increased access to basic services this objective Overall, 80 percent of power sector projects was expressed only in terms of water supply and achieved planned outputs. The planned Cost of sanitation infrastructure rather than health and Service Study, which would have informed the education. Although support to vocational training power sector reform, has not progressed due to and skills development was not explicitly mentioned an unsuccessful procurement process. Outcomes as an operational priority in the 2011–2015 CSP, achieved include: a) additional electricity generation the Support to Science and Technology Education capacity of 120 MW; b) job creation for members Project was identified in the CSP Logframe as a of the local community although this tends to be means of addressing skills gaps and reducing temporary given the skill requirements required barriers to private sector development. for more permanent jobs; and c) increased access to basic infrastructure, thereby promoting private With a few exceptions, the alignment of projects with sector development. the needs of beneficiaries was ratedsatisfactory. While projects in the multi, power, social and transport Delivery of outputs of the WSS projects was rated sectors have addressed alleviation of development satisfactory at 90 percent across projects. The constraints at the national or regional level, projects outcome level achievements include: a) improved in the agriculture and WSS sectors targeted the access to water sources for over 1,500,000 people; needs of specific beneficiary groups. Private sector b) increased hours of service from five hours per projects were well-aligned with the needs of targeted day to 16 hours per day for the Nkana WSS project companies and financial intermediaries but did not and 22 hours for 8 Centers WSS project; and c) always fully address the needs of SMEs. reduction in waterborne diseases with the Nkana and 8 Centers project areas reporting a 43 percent and 48 percent decrease in diarrhea and dysentery Effectiveness respectively, while the interventions under the NRWSSP reduced the incidence of diarrhea from Overall progress is rated as moderately 50 percent to 35 percent across the Northern and unsatisfactory. The achievement of project outputs Luapula provinces. across sectors was moderately satisfactory, with 78 percent of outputs delivered successfully. The majority of the Bank's agricultural operations However, achievement of project outcomes was did not fully deliver the planned outputs and only moderately unsatisfactory, with progress moderate progress was made toward expected demonstrated only toward 67 percent of outcomes. outcomes. However, some progress has been made towards increased incomes for farmers, access to All the ongoing transport projects have faced markets and increased use of improved irrigation considerable implementation delays for the delivery methods. Executive Summary 3

The PRBS program has a large social component over the 2011–2015 period. The Bank is also a in addition to reforms targeting PFM and private prominent dialogue partner for the Performance sector regulatory reform. Delivery of outputs Assessment Framework (PAF) working group under for the PRBS was satisfactory in terms of the the PRBS; it possesses a privileged relationship with implementation of identified triggers and reforms. the GRZ regarding policy dialogue. However this was less the case for outputs related to PFM, which included the implementation of IFMIS Delivery of knowledge work has intensified over and the Treasury Single Account (TSA). With respect the evaluation period, and ZMFO has used studies to outcomes, progress was achieved towards to inform and support policy dialogue, engaging in strengthening accountability and transparency a high level policy dialogue on youth employment in functions with the implementation of a National 2012 and hosting a seminar on Jobs and Growth in Anti-Corruption Plan and increase in coverage of 2014. Knowledge work in the form of studies has external audit. The Zambia Public Procurement also been used to add value to the Bank's operations. Agency (ZPPA) was empowered with oversight functions but there are still challenges because of At the broader country strategy level, the Bank's the absence of an impartial complaints redressal interventions made a tangible contribution towards system and irregularities resulting from inadequate developing an enabling business environment understanding of guidelines. Private sector and increasing access to basic infrastructure and regulatory reforms considerably reduced the cost services. However, limited progress was achieved of doing business. There has been improvement in in strengthening public financial management and the access to health and education with an increase promoting agricultural productivity and diversity. in supervised childbirths and improvements in teacher student ratios. Nonetheless, limited The Bank's interventions in the WSS, power and progress was achieved in terms of strengthening social sectors have made a tangible contribution to budget credibility and execution with reported increasing access to basic services. National trends irregularities in commitments and poor enforcement for access to improved water and sanitation of regulations. sources have been positive with the percentage Country Strategy Evaluation of Zambians having access to an improved water Finally, about 87 percent of the planned private source climbing from 55 percent in 2002 to 65 sector project outputs was delivered. The percent in 2014. In contrast, limited improvement An IDEV achievement of outcomes presents a mixed picture has been seen in access to improved sanitation. but is largely positive. Positive outcomes were The Bank's completed projects in the water sector achieved in the area of government revenues, have benefitted over 1.5 million people. With respect job creation, and access to basic services and to access to electricity, the Bank has contributed infrastructure. Achievements were less than 120 MW to Zambia's installed generation capacity expected in the areas of profitability of companies through the implementation of the Itezhi-Tezhi power supported by the Bank (for example Lumwana project. Progress has also been made towards Mine), and improvement in the terms of finance. health and education outcomes.

After the establishment of ZMFO, the Bank has In addition, the Bank has sought to promote been participating effectively in policy dialogue economic growth and reduce poverty by with the GRZ. Since 2006, the Bank has been an increasing agricultural productivity and trade. active participant in the donor coordination efforts Although overall agricultural exports have increased, in Zambia, leading the Cooperating Partners Group little progress has been made in diversification. troika in 2012, as well as leading the agriculture, Agriculture as a share of total exports has decreased transport and WSS working groups at various points from 11.54 percent in 2002 to 7.49 percent in 4 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

2014 though there is an increase in absolute terms. Efficiency Furthermore, there is evidence of increased land under cultivation and use of improved irrigation The efficiency of the Bank's portfolio is rated as techniques. During 2008–2012, the total area unsatisfactory owing to considerable timeliness cultivated increased by 16 percent, whereas total issues and portfolio disbursement ratios which have irrigated land in Zambia increased by seven percent consistently fallen below the Bank-wide average. during 2001–2011, suggesting that some gains have been achieved for agricultural productivity. The Bank’s completed projects have incurred on However, there is limited evidence of agricultural average eight-month delay for every planned year diversification away from maize production, which of project implementation. Several factors account the government has accorded highest priority. for this delay, including project design issues, delays in meeting conditions, complexities with The Bank's interventions have aimed at improving co-financed projects and procurement delays. the business environment in terms of ease of Project design issues in the Bank’s projects were doing business, access to finance and business characterized by an underestimation of costs leading development. The ease of doing business index to incomplete implementation of components or improved from 92 in 2006 to 83 in 2014. Access additional costs and time due to a re-engineering of to finance as reflected in the domestic credit to the the technical design. Indeed, delays in the fulfilment private sector as a percentage to the GDP increased of conditions precedent to first disbursement have from 10.2 in 2007 to 17.2 in 2013, though the been a recurrent problem. The average delay for Bank’s contribution in this area was modest. The loan effectiveness was 13 months, while the Bank missed the opportunity to support the corporate average delay for first disbursement was five social responsibility initiatives adopted by Itezhi-Tezhi months. However, delays between approval and first Power Corporation and Barrick, which would have disbursement have improved recently, falling from 16 enhanced the impact of the Bank’s investments. months in 2011 to 12 months in 2014. Such delays have serious implications for the private sector Finally, during 2006-2011, the Bank's efforts operations where the Bank begins supervision only to strengthen macroeconomic management after the first disbursement. The financial viability through general budget support appear to have of the borrower can deteriorate yet the Bank would contributed to the reduced gross government debt be unaware of the risks involved. The complexities and budget deficits. In 2014, however, the gross of co-financed projects were reflected in the government debt has increased, reaching 35.1 incompatibility between the private and public percent of GDP. Similarly, annual deficits have sector approval processes of the Bank. These were returned to 2004 levels, reaching 10.6 percent. exacerbated by delays in reconciling lending terms Furthermore, annual wage expenditure accounted among multiple DPs. Finally, procurement delays for an increasing share of GDP and, in raw terms, resulted from weak procurement capacity within line has increased by more than 400 percent, from ministries and heavy internal government approval 2,968 billion ZMW in 2006 to 11,897 billion ZMW processes. Related to this issue is the requirement in 2014. These changes coincide with a decline in that all contracts must be approved by the Office scores on financial governance indices, including of the Attorney General (OAG), which is not able to CPIA scores for Fiscal and Debt Policy, from 4.5 in clear all contracts in a timely manner due to resource 2009 to 3.0 in 2015. constraints. Executive Summary 5

The overall disbursement ratio has improved during ❙❙ Finally, sustainability of private sector projects was the evaluation period, from 83 percent for the 2002– compromised by regulatory changes as well as 2004 CSP to 96 percent for the 2007-2010 JASZ variable profitability among the targeted institutions. and 93 percent for the 2011–2015 CSP. As of 2008, the disbursement ratio for Zambia has fallen slightly below the Bank-wide average, with some recent Crosscutting Themes improvements. As per the calculations available in PCRs, on average, the ratio between ex-post and The coverage of gender across the CSP periods ex-ante EIRR was 0.96, indicating that the projects was rated moderately unsatisfactory with uneven came close to meeting their expected rates of return. identification of gender-specific development constraints and few targeted interventions. However, gender has been mainstreamed into project design Sustainability for the majority of projects by identifying employment and income generating opportunities for women. In Sustainability of the Bank project outcomes was some cases, efforts to promote income-generating rated moderately unsatisfactory with variability activities for women were limited by project across sectors, as noted below: design omissions whereas other projects missed opportunities in this regard. ❙❙ Transport sector projects face financial sustainability and institutional capacity risks The coverage of inclusive growth and in ensuring the sustainability of outcomes. environmental sustainability was rated Institutional risks arise from management moderately unsatisfactory, and was most explicit challenges of over-procurement and contract under the 2002–2004 CSP but decreased across management irregularities. subsequent CSPs. The themes of inclusive and green growth were integrated across the portfolio through ❙❙ The primary sustainability concern for the Itezhi- the promotion of socially and environmentally

Tezhi power project has been the financial responsible investment and a reduction of disparities Country Strategy Evaluation sustainability of the project given that Zambia's between urban and rural areas. Overall, integration energy tariffs continue to fall far below cost of inclusive and green growth within the project recovery levels. portfolio was rated moderately satisfactory. An IDEV

❙❙ WSS projects have benefitted from the selection of simplified and uniform technical solutions to Leveraging and Co-financing reduce the cost and complexity of maintenance. But in some instances they have struggled to Approximately 55 percent of projects approved have co- ensure financial sustainability of operations and financing from partners. Furthermore, the 2015 CSPCR reduce unaccounted for water. notes that, over the strategy period, the Bank managed to secure co-financing of 220 percent of the original ❙❙ The primary risks to the sustainability of ADF allocation. With respect to the leveraging of funds, agricultural projects stem from institutional the Bank has served as the lead arranger for three sustainability, ownership by the beneficiaries, and projects, that is, the Itezhi-Tezhi Power Generation and exogenous shocks. Transmission Project, the Nacala Corridor Road Project and Kazungula Bridge. Through these projects the Bank ❙❙ Poor sustainability of outcomes from the Bank's was able to leverage its own contribution by factors of PRBS program is attributed to institutional capacity 16, 3.68 and 1.82, respectively. The Bank has also risks and insufficient government ownership. secured co-financing from emerging donors, including 6 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

India Exim Bank, the Development Bank of South Africa projects; and b) clarity of the intervention logic, and the OPEC Fund for International Development. including confusion between project outputs and outcomes issues on the realism of project design arose from the quality of feasibility studies Managing for results underpinning the project designs. This resulted in an underestimation of project costs, time and All CSPs were rooted in a robust analysis of quality of engineering designs. the political context, macroeconomic context, dimensions of poverty, national development The frequency of supervision has increased strategies and constraints to growth surrounding over the evaluation period. A portfolio review the Bank’s projects. Understanding of the country indicated that, during 2002–2004, projects were context has been underpinned by consultations supervised, on average, once every two years. to inform CSP design. However the clarity and The feedback from the government on the Bank’s realism of the intervention logic for the Bank's CSPs supervisions shows that the quality of interaction remained relatively weak until the 2011–2015 CSP. with the Bank has improved over the years with Despite implementing activities in a broader range the establishment of the Country Office. of sectors, the Bank's strategy has managed to become more coherent in that projects across a range of sectors now support a more limited number Overall Assessment of strategic outcomes. In the background of the above findings, the overall Project design weaknesses were identified performance of the Zambia Country Strategy and with regard to: a) realism of the intended Program 2002-2015 has been rated moderately outcomes given the scope and design of unsatisfactory, as shown below:

Criteria Rating Relevance ❙❙ Alignment of CSPs with National Development Plans Satisfactory ❙❙ Alignment of the Project Portfolio with CSPs Satisfactory ❙❙ Alignment of Projects with the Needs of Beneficiaries Satisfactory Rating for Relevance Satisfactory Effectiveness ❙❙ Delivery of Project Outputs Moderately Satisfactory ❙❙ Achievement of Outcomes Moderately Unsatisfactory Rating for Effectiveness Moderately Unsatisfactory Efficiency ❙❙ Timeliness of Project Implementation Unsatisfactory ❙❙ Financial and Economic Performance Moderately Unsatisfactory Rating for Efficiency Unsatisfactory Executive Summary 7

Criteria Rating Sustainability ❙❙ Private Sector Moderately Unsatisfactory ❙❙ Power Sector Moderately Unsatisfactory ❙❙ Agriculture Sector Moderately Unsatisfactory ❙❙ Multi-Sector Unsatisfactory ❙❙ Social Sector Moderately Unsatisfactory ❙❙ WSS Sector Moderately Satisfactory ❙❙ Transport Sector Moderately Satisfactory Rating for Sustainability Moderately Unsatisfactory Crosscutting themes ❙❙ Coverage of Gender within CSPs Moderately Unsatisfactory ❙❙ Gender mainstreaming across the portfolio Moderately Unsatisfactory ❙❙ Inclusive and Green Growth within CSPs Moderately Unsatisfactory ❙❙ Inclusive and Green Growth across the portfolio Moderately Satisfactory Rating for Crosscutting Themes Moderately Unsatisfactory Overall Rating Moderately Unsatisfactory

Conclusions and Recommendations f. Whereas the Bank's activities have attempted to promote inclusive and green growth, The foregoing analysis leads to the following main opportunities to mainstream gender have not conclusions: been fully leveraged. a. The Bank’s Country Strategies and Programs have Based on the above findings and conclusions, been well aligned with both national development the evaluation proposes the following nine

plans and the Bank's comparative advantage. recommendations. Country Strategy Evaluation b. The Bank's portfolio has become more 1. Continue to support private sector coherent, adopting an integrated approach to regulatory reform and build capacity among An IDEV development challenges. the accountability functions of government, particularly audit and procurement. c. The Bank has largely delivered planned outputs but the achievement of outcomes has been 2. Strengthen the Bank’s role in donor limited by project design weaknesses and coordination, analytical work and policy delayed implementation. dialogue. The policy dialogue needs to be supported by rigorous analytical work in several d. The Bank has contributed to increasing access areas of public policy including private sector to basic services and improving the business development, public private partnerships, and environment. However, opportunities for regulatory systems with policy predictability. upscaling have not been leveraged. Coordinated efforts are required to address deficiencies in the monitoring and evaluation e. Political and governance risks are becoming an system at the country level and, in this regard, the increasingly important factor in the sustainability Bank should contribute to the ongoing initiative. of projects. Policy dialogue should also be implemented to 8 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

address political and governance risks to the the productivity of small businesses and sustainability of projects. increase access to finance.Increasing the pool of SMEs that generate sufficient revenue 3. Address constraints to private sector to afford formal financial products remains involvement in service delivery and address an obstacle to improving access to finance. infrastructure bottlenecks. Inadequate tariff Opportunities for creating linkage between structures and macroeconomic pressures create interventions which increase production of high disincentives to private sector participation. The value crops, incomes and access to markets Bank should identify, through analytical work among underserved groups and LOC or TA for and policy dialogue in particular, opportunities to SME finance should be explored. mitigate the impact of these constraints through a range of instruments, including lending, TA for 7. Identify means of harmonizing project project selection and guarantees for service implementation approaches with other delivery and purchasing agreements. co-financing partners as well as within projects that possess both private and 4. Identify opportunities to upscale public sector components. The Bank needs development outcomes from private sector to work closely with partners to reduce delays investments. The corporate social responsibility by identifying harmonized terms, conditions, initiatives of the Itezhi-Tezhi Power Project and engineering and procurement approaches for the Lumwana Mine provide opportunities for co-financed projects to avoid implementation complementary investments which could scale delays, cost-overruns and output quality up the development impact of those projects. inconsistencies.

5. Deepen the integration of gender in Bank’s 8. Develop the capacity of the GRZ for operations and engage in policy dialogue on project selection, design and engineering, gender with the government in collaboration particularly for infrastructure projects and with cooperating partners. The Bank, with Public Private Partnerships. other cooperating partners, should assist in the implementation of the National Gender Policy 9. Identify and mitigate operational issues 2014 with a focus on gender auditing, gender surrounding multinational projects aimed responsive national planning and budgeting, and at regional integration. Based on the the establishment of a system for monitoring identification of constraints, the Bank should gender outcomes at country level. establish linkage between the CSP and the broader regional integration strategy to make 6. Promote synergies within the Bank sure bottlenecks are addressed at the right program and in coordination with other level – either through dialogue at country level donors between projects which improve or coordinated approach at regional level. Management Response 9

Management Response

Management welcomes the Independent Development Evaluation (IDEV) report: Evaluation of the African Development Bank's Country Strategy and Programme for Zambia (2002–2015). The purpose of the Evaluation was to assess, among others, the relevance, effectiveness, efficiency, and sustainability of the strategic interventions and to inform the preparation of the next Zambia Country Strategy. The evaluation revealed that the Bank’s Country Strategies were relevant in terms of strategic focus and alignment in addressing Zambia’s Development challenges. The projects supported by the Bank delivered most of the planned outputs while project outcomes did not always meet the targets. Project efficiency was rated moderately unsatisfactory largely due to the lags in preparing projects and the delays between loan approval and effectiveness for first disbursement. Sustainability was rated moderately unsatisfactory. This was due to low profitability of some private sector projects while issues of cost reflective pricing was lacking in water and energy supported projects.

Introduction Evaluation Design

The IDEV evaluation covers the period 2002–2015 and The evaluation team developed an evaluation three Country Strategy Papers: the 2002–2004 Country matrix and theory of change to guide data Strategy, which was extended to 2006; the 2007–2010 collection and analysis. This included key Joint Assistance Strategy for Zambia formulated as indicators and judgment criteria based on a six a joint program with support from multilateral and point scale that was used to create a transparent bilateral development agencies operating in Zambia; account of how IDEV examined the achievement and the 2011–2015 Country Strategy. of results across each sector. Country Strategy Evaluation

Although Management received an overall rating CSP Strategic Focus for each judgement criteria, management has not An IDEV seen how each individual project was assessed. The key strategic focus of the three Country Strategies This would have increased transparency on the was the support to infrastructure development in part of the evaluation and allowed management to support of agriculture, water and sanitation, energy better understand the findings in terms of outputs and transport. In the past five years, a higher degree and outcomes. As the evaluation period is quite long of support to economic and financial governance (more than 10 years), the report could also provide was pursued to target regulatory reform to facilitate some information on how the performance changed private sector development as well as public financial over time, to make the assessment a bit more management reforms. dynamic and indicate some trends. 10 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

The evaluation team notes various valid limitations Project alignment to the needs of beneficiaries was of the evaluation methodology. Furthermore flaws rated overall satisfactory. Management agrees with in the intervention logic and the lack of baseline the finding that the needs of Small and Medium Sized data made it difficult to evaluate progress on Enterprises have not always been sufficiently catered some indicators. Management agrees with for. In the new Country Strategy it is proposed that the finding. The results based framework the Bank will provide more targeted support to Small will be strengthened in the context of a clear and Medium Sized Enterprises through collaboration intervention logic as well as indicators will be with local financial institutions. Lines of Credit will selected where there is baseline data available be better targeted for the needs of SME’s such as when drafting the next Country Strategy Paper. providing business development services which are often in high demand. Projects designed to support and expand SME’s will also be developed. In fact, the Program Implementation Bank is currently financing the Cashew Project that links farmers with local processors and helps expand The evaluation uses four key criteria: relevance, the market for Cashew. Entrepreneurs in the cassava effectiveness, efficiency, and sustainability to value chain are also being supported through evaluate the country strategies. In addition, cross- improved product development, produc¬tivity cutting issues such as gender, quality-at-entry, and increase, and commercialising the crop. These leveraging and co-financing are also assessed. Each support is being provided through capacity building of these elements are commented on below. and business development services.

Relevance Effectiveness

Relevance is measured as the degree of alignment Project effectiveness is measured based on of Country Strategies to National Development achievements of outputs and outcomes targets. plans, and of projects to Country Strategies and Achievements of outputs are rated moderately beneficiaries. satisfactory, while achievements of outcomes are rated moderately unsatisfactory. The alignment of Country Strategies to National Development Plans was rated satisfactory. Project Output: Most prioritized sectors have The Bank has used its comparative advantage demonstrated good progress in achieving planned in the support of infrastructure development outputs including private sector, energy, agriculture, while addressing the specific needs of the water and sanitation, transport, and governance. Zambian Government as outlined in the National Agriculture has been a challenging area with Development Plans (NDPs), consistent with limited progress due to a difficult implementation Bank’s Ten Year Strategy (2013– 2022) and the environment and complex procurement processes Hig-5s. Given the large investment needs that that contributed to implementation delays. remain in transport, energy, and water and sanitation, Management will, consistent with Project Outcome: Achievement of outcomes the priorities in the NDPs, continue to support is unsatisfactory as a result of start-up delays, this strategic focus in the new Zambia Country implementation and procurement delays, and Strategy. delayed completion dates for projects. This in turn Management Response 11

affected project impact and achievement of results. within the region. Diversification of the sector has The evaluation report states that achievements were been hindered by the Governments continued less than expected in private sector projects due to support to the Farmer Input Support Program profitability and lack of improvement in the terms and the purchase programs by the Food Reserve of finance. It should be noted that for most of the Agency. Both these programs are heavily focussed period under evaluation, Zambia was an ADF only on supporting the production of maize. From 2015 country with most of the financing targeting public an e-voucher system provides some promise sector projects. The price of copper between 2011 in diversifying the sector as farmers can now and 2015 declined by more than 50 percent with choose inputs of their choice. In the new Country prices falling to under USD 4800 per tonne in 2015 Strategy, Management is proposing to provide affecting Governments revenue generation. The a holistic approach to agriculture by supporting added pressure to Government’s fiscal position led value chains and developing markets in line to higher domestic lending pushing up the price with the Feed Africa-Strategy for Agricultural of funding thus crowding out the private sector. Transformation in Africa (2016–2025). Average interest rates are high and currently at above 28 percent. Although the Bank has provided Improving public financial management has been Lines of Credit to strengthen SME financing, it has no a challenge. A Multi-donor Trust Fund, led by the influence on the cost of treasury bills which are used World Bank is currently supporting this area, in as the benchmark for commercial lending. which the Bank is not providing direct support. In the new Country Strategy, Management is proposing to Policy dialogue and knowledge work: strengthen Public Financial Management capacity Management notes the positive development of directly through the implementing agencies. This will the decentralisation process in terms of policy help build a critical mass of qualified accountants, dialogue and donor coordination. The Bank’s internal auditors, and procurement officers and physical presence has made it possible to service build the needed institutional capacity in the its key clients, build a close relationship and executing agencies that we support. It is felt that enhance dialogue with the Government, use the institutionalized capacity building of professionals Country Strategy Evaluation local networks, build the portfolio while leveraging would be more sustainable than project based finance from development partners, provide capacity training or orientation which targets only project building to project implementation units and respond staff whose turnover is high as they move on after An IDEV efficiently to arising needs. the projects are completed leaving the executing agencies without the required capacity to undertake Strategic Outcomes: At the strategic outcome other new projects. Agencies will be screened for level the Evaluation Report concludes that the Public Financial Management skills and needs Bank has made a positive impact on improving the during project design. Any support to agencies will business environment, and increasing access to be based on this assessment. Activities proposed will basic services and infrastructure. Limited progress be coordinated with the activities supported by the has been achieved to strengthen Public Financial Multi-donor Trust Fund to avoid overlaps. Management and promote diversification by promoting the agriculture sector. Efficiency The Bank intends to continue supporting agriculture and agribusiness as it is critical for employment and The efficient delivery of projects is evaluated based rural incomes and as it is an important source of on the timeliness of projects and on the financial and foreign earnings given its large market potential economic performance that are demonstrated. 12 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Timeliness: The dimension of timeliness is further negotiations of common terms agreements for co- evaluated using four sub-dimensions: inadequate financing partners would guide the formulation of project design; loan effectiveness and disbursement; future projects. co-financing complexities; and, procurement delays. Management notes with concern that despite Procurement capacity of Government counterparts recent improvements, projects are significantly is often weak with a high turnover of staff. Despite delayed on the various sub-dimensions Bank support to capacity building and training, mentioned above. Management would like to point procurement delays often persist. Management out that in the past 18 months the government will continue to prioritise and provide training to introduced new approval procedures, including the help build a critical mass of procurement officers need to obtain parliamentary ratification of loan in the public sector. As part of new projects public agreements with the new constitution, and this procurement training will be strengthened and caused significant project effectiveness delays. institutionalized in the implementing agencies where relevant. In addition longer term support could be Management has already taken steps to strengthen provided through the Zambian Public Procurement project design and preparation to reduce the Authority that is mandated to carry out capacity risk of delays. To reduce delays caused by loan building of procurement entities. effectiveness and effectiveness to first disbursement any preconditions or other conditions that risk Financial and economic performance: Between affecting a project will be addressed upfront. 2002 and 2014, the disbursement ratios for Zambia This implies that projects will only be elevated to portfolio had fallen below the Bank wide average. the Board once conditions have been addressed, However, in 2015 improvements in disbursement especially conditions that borders on project ratios were recorded. The Zambia portfolio is young readiness and quality at-entry. Key portfolio issues, (2.4 years on average) with limited disbursements including weak capacity of project implementation in the early period of project implementation. units in procurement, financial management Improvements are therefore expected during 2016 and contract administration are being addressed and 2017 as the new projects start to increase through joint quarterly portfolio review meetings and their disbursement levels. This is consistent with annual fiduciary clinics organised with the Ministry implementation of most of the high value large of Finance and attendance of project staff. infrastructure projects which usually have slow disbursements at the beginning. In addition, by The Bank has been very successful in leveraging improving quality at entry and project readiness, projects through co-financing arrangements. the disbursement ratio is expected to continue to However, in terms of implementation, as pointed increase in the coming years. out in the Report, significant delays have been experienced, particularly when bilateral donors Management notes that agricultural interventions are are involved. Management has strengthened rated “moderately satisfactory”, yet the agricultural efforts to harmonise internal procedures to avoid projects addressed the needs of specific groups similar types of process related delays in the of beneficiaries in terms of increasing productivity, future. Clear agreements on procedures will be improving food security and reducing poverty. Thus made before Board approval and in accordance this assessment appears to be conflicting, in terms with PD 02/2015. Lessons learnt from prolonged of performance of agricultural projects. Management Response 13

Sustainability Gender: The Bank is implementing the Bank’s Gender Strategy while gender mainstreaming in all The sustainability rating was evaluated below its operations. However, according to the Evaluation satisfactory. For utilities, this was related to cost Report gender received limited attention across the reflective pricing of water and energy. Management evaluation period. Management acknowledges the agrees that usage of public resources need to be need to pay more attention to gender and recognises cost reflective. The Bank is currently supporting a strengthened approach to addressing gender as the an industry wide cost of service study that will new Country Strategy is being prepared. Initially, projects inform the Zambian energy market on the pricing lacked effective tools for addressing gender issues in of electricity at different consumer and firm levels. Bank operations. A comprehensive country gender The water utilities have struggled with improving the assessment is about to be commissioned to identify none-revenue water in order to reach operational gender gaps and challenges, of which the outcome will efficiency. The Bank continues to work with utilities inform gender specific interventions in Bank operations to improve infrastructure and metering to reduce under the new CSP. leakages while continuing to provide capacity building. Management will take into consideration Inclusive Growth: Focus on inclusive and green the social aspect of utilities in terms of providing growth and environmental sustainability was most services and protecting the poor. A carefully prominent between 2002 and 2004. Although poverty designed cost reflective approach and tariff pricing levels have fallen in urban areas, poverty in rural areas should therefore be pursued when supporting such remains stubbornly resistant. Limited access to markets projects. is cited as a key cause. In the new Country Strategy, Management plans to support a stronger linkage The Evaluation Report concludes that some private between rural production areas and urban markets. firms were affected by regulatory changes and This will be done by supporting agriculture value variable profitability that adversely affected the chains and the development of markets. In the current sustainability rating, e.g. the support to Lumwana portfolio, climate change is being addressed in several mine and CETZAM financial institution. However, ways. One project, Strengthening Climate Resilience Country Strategy Evaluation as mentioned earlier, profitability was affected by a in the Kafue Basin, aims to mitigate against drought significant decline in copper prices between 2011 and flooding through improved planning and climate and 2015 which also affected public finances and resilient infrastructure and production systems. Other An IDEV raised commercial lending rates. Notwithstanding projects such as Lake Tanganyika Development and the above and with a few exceptions, most AfDB- the Agriculture Productivity and Market Enhancement supported firms have managed to adjust to the more Projects implement climate change as a cross cutting difficult business environment and are operating as issue being mainstreamed into the main activities. going concerns. Some older agriculture projects that were designed and implemented before 2008 may have had some Cross-Cutting adverse environmental impacts. Currently all projects are classified in terms of their potential level of social Two dimensions, gender and inclusive growth, were and environmental impacts as guided by Bank Policy. used to assess the level of integration of cross- Category 1 and 2 projects are subject to Environmental cutting issues into Country Strategies and the project and Social Management Plans. This practice will portfolio. continue. 14 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Quality at Entry rehabilitation project which the Bank is financing with two multilateral partners and a bilateral partner. Two dimensions of quality-at-entry have been analysed. The conclusion is moderately satisfactory for the Quality-at-Entry of Country Strategies while Conclusions and Key Lessons quality and realism of project design was moderately unsatisfactory. Management appreciates the following conclusions and key lessons emanating from the Management notes with satisfaction that the Evaluation Report: intervention logic improved with the 2011–2015 Country Strategy. The framework still needs to be The Country Strategies and programmes have more practical while higher attention needs to be been well-aligned with the national vision, national placed on the realism of indicators, especially at development plans and national strategies. the outcome level. Management will ensure that This confirms the Banks focus on addressing the results framework in the new Country Strategy the large infrastructure gaps that Zambia still demonstrates a clear and coherent theory of change faces. Furthermore the Management’s plan to and is more practical. strengthen support to private sector in the new Country Strategy, while addressing regulatory Management notes that in some instances project constraints and bottlenecks, is the appropriate design has been inadequate and that this led to strategy going forward. under costing of project outputs and a lower number of outputs delivered. Management acknowledges The integrated approach that the Bank followed that the use of Project Finance in a Zambian context in the 2011–2015 Country Strategy by focusing was challenging due to limited understanding of the on the strategic outcomes has meant a broader approach and weak capacity in the area. In order selection of sectors that have received support. to build capacity, the Bank provided training to Additionally, the Report confirms that government officials in the region in the use of and preparation of Project Finance. the integrated approach has more coherently addressed Zambia’s development challenges. Management plans to continue this approach in Leveraging and Co-Financing the new Country Strategy.

Management efforts to promote leveraging and Although outputs have largely been delivered as co-financing has been successful in Zambia planned, the level of achievement of outcomes is as indicated in the Evaluation Report. This was below satisfactory largely due to implementation particularly relevant following the financial crisis delays. There is need for improved quality at and when Zambia could only access ADF resources. entry to ensure project readiness. For example, With the reclassification to Blend country, Zambia for infrastructure projects that require feasibility has increased its access to ADB resources while studies, such studies should be completed before the need for leveraging may diminish in some types presentation of the project to the Board. of lower risk projects. However, management will continue to pursue co-financing to forge partnerships Bank support has contributed to increased basic with development partners and utilise synergies. A services and improvements in the business recent example of such a project is the Kariba Dam environment. Under private sector, more could be Management Response 15

done in utilising channels for upscaling projects. regulatory changes that are not discussed with One example the Report mentions is scaling up the private sector. Enhanced policy dialogue, activities that the private sector supports through knowledge work and addressing risk will be their Corporate Social Responsibility programs. important activities in the implementation of the new Country Strategy. Political, governance and regulatory risks have increased during the past 5-7 years with Mainstreaming gender in operations has not been regulations that are passed without sufficient fully leveraged. In the preparation of new projects consultation with the private sector. This has enhanced gender screening and screening for smart affected project implementation and profitability climate approaches, skills needs and employability of some private sector operators that have of direct beneficiaries and a conducive regulatory reduced their investments. For example, the most environment will receive more attention when profitable mine in the country has not made new designing projects in the implementation of the new investments in the Country since 2008 due to Country Strategy.

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 1: Continue to support private sector regulatory reform and build capacity among the accountability functions of government. Budget support and TA interventions AGREED. Support to private sector reforms and capacity building have yielded positive have been successful in promoting results. These interventions need to be continued and extended to areas identified in the private sector regulatory reform and recommendation. strengthening of accountability functions, Action: partly due to adequate ownership among implementing bodies. These issues As proposed in the new CSP, Bank operations will continue to include support to Economic continue to be relevant, particularly the and Governance Reforms. Reforms can be supported through sector budget support or need to strengthen audit and procurement will be included as components in relevant projects and programs, and aligned with the capacity. Furthermore, strengthening High-5s. Additionally, institutional support program(s) including support to strengthening Country Strategy Evaluation external accountability functions can audit and procurement capacities in the public sector will be considered. Task Managers complement the implementation of will be responsible for ensuring that projects are screened for relevant sector reforms during the project preparation stage and included in project design where it makes good financial control systems to reduce An IDEV irregularities and improve public financial sense. Furthermore, task managers will be responsible for assessing needs in relation to management. accountability functions in the project institutions that we support (ZMFO, 2017) 16 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 2: Strengthen the Bank’s role in donor coordination, analytical work and policy dialogue. The Bank, with its unique positioning AGREED. Management agrees with the key roles that the Bank is already playing in in Africa and among the development Zambia as well as the need to continue to strengthen them. Although the Budget Support partners, is expected to play a key role group is no longer active, a Cooperating Partners Group continues to carry out policy in donor coordination, analytical work dialogue at the highest levels. The Bank remains very active in this group and chaired and policy dialogue. The policy dialogue it in 2012 while also chairing other working groups (transport, water and sanitation, needs to be supported by rigorous agriculture and monitoring and statistics group) that carry out policy dialogue at the analytical work, which is also demanded sector level. by the government in several areas of Action: public policy including private sector ❙ development, public private partnerships, ❙ Knowledge work has intensified during the evaluation period as stated in the and regulatory systems with policy report (section 5.2.7). The Bank will continue to strengthen analytical work to predictability. The donor coordination improve the underpinnings of our policy dialogue. As proposed in the new CSP, efforts are currently subdued due partly non-lending activities will support policy analysis and other knowledge work while to the withdrawal of several cooperating policy operations will be pursued at the sector level to facilitate key reforms (e.g. partners from key areas of assistance energy reforms). The proposed CSP was based on a diagnostic study prepared by including budget support. Coordinated the Bank, relevant Bank studies and policies as well as sector studies from other efforts are required to address deficiencies agencies. Management will continue to identify, coordinate and drive relevant in the monitoring and evaluation system studies. Furthermore, during project preparation and design, relevant studies may be at the country level to enable systematic identified and included in the non-lending operations.(ZMFO, Ongoing) reporting of results with active participation ❙❙ Monitoring and Evaluation at the country level will be strengthened. The Bank is of all line ministries, and the Bank should working with the Ministry of Finance to create a simple tool for tracking projects at contribute to the ongoing initiative in this the formulation stage with the aim of reducing start-up delays. Expanding the tool regard. Finally, policy dialogue should also to also incorporate results monitoring will be investigated and implemented, while be implemented as a means of addressing taking into account a monitoring system that Government is already developing with increasing political and governance risks the help of the EU, United Kingdom and Germany (Ongoing). The Country Programs to the sustainability of the Bank's projects, Officer will be responsible to coordinate the development of the tracking tool during particularly with regard to ensuring the first half of 2017.(ZMFO, 2017) adequate consultation with the private ❙❙ Leveraging additional financial resources, both to finance public operations as well sector to inform regulatory changes. as private ones, would be carefully determined and pursued with various partners, especially for large infrastructure operations in energy, water and sanitation, road transport and agri-business development. (ZMFO, Ongoing). Management Response 17

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 3: Address constraints to private sector involvement in service delivery. Private sector participation in service AGREED. The private sector will continue to be a key sector requiring Bank support. The delivery, particularly in the energy Bank is currently supporting the undertaking of a cost of service study, whose finding sector, will play an increasing role in and recommendation should help inform the setting of future tariffs as well as point addressing Zambia's infrastructure out inefficiencies in the electricity system as a whole. The study will therefore inform bottlenecks. However, inadequate tariff Bank Policy dialogue in discussions of moving toward cost reflective tariffs. In the water structures and macroeconomic pressures sector, tariff and affordability studies are carried out for each utility and presented to create disincentives to private sector the regulator. The tariff progressions are then implemented in parallel with efficiency participation. The Bank should identify, gains from the utility based on key performance indicators that rewards good progress. through analytical and policy dialogue in However, improving efficiency is a process that can take several years to implement. particular, opportunities to mitigate the Thus institutional strengthening and capacity building are important elements during impact of these constraints through a project implementation. range of instruments, including lending, Action: TA for project selection and guarantees for service delivery and purchasing In the new CSP, as part of the interventions in the energy sector, the Bank will target agreements. support to institutional strengthening and reforms as a means of attracting private investors. Furthermore, diversifying the energy mix will be important to reduce risk of relying only on hydro. Support to the sector will also entail providing Technical Assistance in the areas highlighted in the recommendation. The Bank will also support and/or use relevant studies to guide policy dialogue pertaining to the private sector. The Country Office together with the sector departments will be responsible for suggesting which instruments best address inadequate policy or constraints. The Government of Zambia has already requested for energy sector budget support which will provide an opportunity for the Bank to assist in reforming the energy sector and to enhance private sector participation. (ZMFO, 2017) Recommendation 4: Identify opportunities to upscale development outcomes from private sector investments. Although the Bank has helped improved AGREED. Private sector operations have in many instances helped improve access to access to services and infrastructure services and infrastructure. The challenge remains bringing on board similar operations through public sector projects, private to scale up such initiatives. sector investments have yielded similar Action: results through infrastructure works and Country Strategy Evaluation corporate social responsibility initiatives. The Private Sector and the Agriculture Sector Specialists in the Country Office will be As demonstrated by the experience of responsible for ensuring the following action points (ZMFO, OPSD, OSAN, 2017): the Itezhi-Tezhi Power Project and the ❙❙ In the new CSP, the Bank will focus on providing technical assistance such as Lumwana Mine, additional development business development services with the aim of helping identify and build capacity of An IDEV impacts and private sector development the private sector. could be realised through complementary ❙❙ The Bank will also focus on support to the private sector through financing selected infrastructure investments surrounding agri-value chains (production, processing and market linkages) and finance these projects. Integrating lessons infrastructure needs (irrigation, collection, storage). It is expected that through these from past experience into the CSP, interventions, additional development impact will be realized. the Bank should more systematically ❙❙ Management will seek more innovative interface in utilising public and private sector identify opportunities to upscale and financing windows for agro-processing, irrigation and farm block infrastructure complement such initiatives, thereby projects. further contributing to service delivery, infrastructure improvements and business development. 18 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 5: Deepen the integration of gender in Bank’s operations and engage in policy dialogue on gender with the government in collaboration with cooperating partners. Even though the Bank’s analytical work AGREED. The Bank is implementing the Bank’s Gender Strategy while mainstreaming on gender in Zambia had recommended gender in all its operations. The Bank will also continue to assist Government in the specific areas for intervention, those implementation of the Zambia National Gender Policy 2014. were not implemented in earnest. In Action: the increasingly relevant context of ❙ feminisation of poverty and HIV/AIDS ❙ Management will continue to ensure policy dialogue, collaborative analytical work pandemic, gender violence, women’s and capacity building with relevant partners including the Ministry of Gender, unequal access to education, health United National Population Fund, and the Zambian Non-Governmental Organisation services, and resources including land Coordinating Committee, as guided by the Zambia National Gender Policy. The and credit, it is imperative that the Bank Bank has already approved USD 30 million towards the cost of implementing the take concrete steps to integrate gender Zambia Skills Development and Entrepreneurship Project – Supporting Women and in its operations with respect to design, Youth (SDEP-SWY). This operation aims to promote job creation, gender equality implementation and the achievement of and poverty reduction. The project seeks to improve the livelihood opportunities of results. The Bank, with other cooperating Zambia’s working poor, especially in rural areas and will benefit particularly, women partners, should engage in policy dialogue and youth by providing enabling infrastructure and entrepreneurship skills for MSME with the government and assist in the business development. This operation has commenced implementation, focusing on implementation of the National Gender women and youth groups and is expected to close in 2020. (ZMFO, Ongoing) Policy 2014 with focus on gender auditing, ❙❙ The Bank will continue to ensure that all operational staff obtain skills in gender gender responsive national planning and analysis, especially for project preparation and appraisal. The Bank will further budgeting, and establishment of a system mainstream gender in all its operations by developing gender indicators in Results for monitoring gender outcomes at country Based Frameworks. (ZMFO, Ongoing) level. Recommendation 6: Promote synergies within the Bank program and in coordination with other donors between projects which improve the productivity of small businesses and increase access to finance. Increasing the pool of SMEs that generate AGREED. Macro-economic instability has an impact on private sector’s ability to borrow sufficient revenue to afford formal financial as they often compete with Government’s domestic borrowing, impacting the cost products remains an obstacle to improving of borrowing. Continued support to Government, through policy dialogue will create access to finance. Opportunities for a conducive environment for private sector operations including lowering interest creating linkages between interventions rates. Access to finance by private sector, especially SMEs forms a critical aspect of which increase production of high value proposed pillars of the new CSP. Making resources available to SMEs continues to be crops, incomes and access to markets a key ingredient in Bank’s operations, especially the development of rural enterprises among underserved groups with LOCs or for job creation and inclusive development. In line with the Feed Africa Strategy, the TA for SME finance should be explored. Risk Sharing Facility will be promoted for agricultural value chain operations with the Such linkages may yield synergies in objective of catalysing the private investments and commercial bank lending. terms of access to finance, business Action: development and economic growth. The Private Sector Specialist in the Country Office will be responsible for ensuring the Outgrower and farmers club schemes following action points (ZMFO, OPSD, 2017) provide a proven means of improving ❙❙ The Bank’s operations and interventions using lines of credit as an instrument will agricultural productivity and diversity while be accompanied by measures to improve capacity for business management and linking farmers to markets and increasing expansion. both incomes and access to finance. ❙ Attention should be paid to ensuring that ❙ The Bank will intensify support to financial institutions to develop financial products targeted project mechanisms are included for SMEs, especially those involved in agro-processing and value-chain related to ensure that the benefits are gender enterprises. This will include the incorporation of incubation programmes for youth inclusive. and women SMEs. ❙❙ The Bank will ensure that financial and technical assistance to SMEs will clearly distinguish and address the peculiarities of enterprises that women usually engage in. Financial products, including insurance and bridge financing, would be applied on exceptional cases to women enterprises. ❙❙ The Bank will provide support towards agriculture rural enterprise development, promotion of outgrower schemes promotion of agricultural productivity and diversity interventions. Management Response 19

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 7: Identify means of harmonising project implementation approaches with other co-financing partners as well as within projects that possess both private and public sector components. Addressing regional and domestic AGREED. Mixed results have been observed with operations that are co-financed with infrastructure constraints will likely other partners. This is, in part, due to the significant differences in policy, regulatory necessitate continued cooperation and fiduciary requirements of each lender. Where project financing is sequenced from and co-financing. The experience of one lender to another, delays from one partner significantly affects the operations the Kazungula Bridge and Itezhi-Tezhi (procurement and disbursement) of other partners. Harmonization in this case only Power Project demonstrates the need refers to co-financing arrangements where it is feasible. We have experience that for the Bank to work closely with other demonstrates that even where rules and procedures are harmonized, for example partners by identifying harmonised with the WB, no arrangements are put in place to reduce dual No Objections from the terms, conditions, engineering and financiers. However, we agree with the observation that it is not possible to apply one procurement approaches for co-financed set of rules in all circumstances and in this case we have suggested full financing projects in order to avoid implementation of specific contracts, i.e. parallel financing, to which specific rules would apply as delays, cost-overruns and output opposed to co-financing a contract and subjecting it to several reviews from financiers. quality inconsistencies. Furthermore, Action: the design and implementation of co- financed projects with both public and The Bank will be responsible for ensuring the following action items (ZMFO, 2017): ❙ private components should be mindful ❙ The Bank will ensure that project readiness mechanisms have been well articulated of differences in the approval processes and agreed amongst partners. This would include availability of designs, preparatory for these two sources of funds in order studies, setting up of project implementation teams and harmonisation of to avoid both unnecessary delays and procurement procedures irrespective of source of finance. additional costs. ❙❙ The Bank will ensure that common terms agreements for complex transactions, especially PPP and project finance, are well negotiated in advance, ahead of Board approval. This will minimise potential delays and conflicts usually associated with such negotiation after Board approval. Country Strategy Evaluation An IDEV 20 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 8: Increase the capacity of the GRZ for project selection, design and engineering, particularly for infrastructure projects and Public Private Partnerships. Inadequate project design and engineering AGREED. As part of project readiness mechanisms that have been put in place, has frustrated the implementation of designs for infrastructure-related operations are usually in place ahead of Board projects across several sectors, including approval, with the increased use of MIC TA grants, PPF and other relevant funding the transport sector, for which inadequate facilities. However, there are issues with the quality of some designs that require a project design and engineering can result review after Board approval to ensure quality during implementation. in considerable project delays as well Action: as procurement disputes. Assistance in implementing high quality feasibility The Country Programs Officer will be responsible for ensuring the following action studies which identify reasonable project items are addressed during project preparation (ZMFO, 2017): ❙ costs would also be beneficial for the ❙ The Bank will intensify the use of advance contracting where appropriate for review Bank's ongoing support to the WSS of engineering designs and associated bills of quantities before Board approval. sector, for which underestimation of the This will also help project teams to validate project detailed costs before Board project complexity and costs have limited consideration. the successful delivery of improved ❙❙ The Bank will continue to provide capacity building and technical assistance to sanitation facilities for past interventions. staff of key implementation units on various aspects of project formulation and As additional PPPs are implemented in implementation including PPP transactions, project formulation, and fiduciary issues Zambia, technical assistance should be such as financial management and procurement. provided to improve project selection and ensure that PPP arrangements are providing added value. Finally, greater attention should be devoted to identifying and assessing sensitivity to political and governance risks, including tariff structures, regulatory changes and ownership. Management Response 21

MANAGEMENT ACTION RECORD Recommendation Management response Recommendation 9: Identify and mitigate operational issues surrounding multinational projects aimed at regional integration. The implementation of regional projects AGREED. Regional operations have continued to face significant challenges in has been subject to excessive delays coordination and harmonisation of processes. Soft issues of regional integration like caused by coordination issues at the the harmonisation of custom procedures, free movement of goods and services, have regional level, as seen in the case of not received as much attention as infrastructure. PRODAP, which was discontinued in Action: course of implementation. Delays in the ❙ full implementation of one-stop border ❙ Task Managers with the support of the Country Programs Officer will ensure that post constrain the movement goods, a joint project implementation unit is established for multinational operations with services and people, affecting the representation from participating countries, as was the case of Kazungula Bridge competitiveness and economic growth Project. The use of joint project steering committee would ensure that most of the of the region in general and the Zambia project issues are resolved at the highest level for speedy implementation of planned in particular. Based on the identification activities. (ZMFO, Sector Departments, Ongoing) of constraints, the Bank should establish ❙❙ In situations where joint financing of projects are required for Multinational linkages between the CSP and the broader operations, the Procurement Officer will ensure that procurement modalities are regional integration strategy to make sure harmonised during project preparation. This is to avoid multiplication of reviews bottlenecks are addressed at the right or approvals by different lenders and participating countries. As much as possible level – either through dialogue at country contract packaging will be aligned to total contract financing where adoption of one level or coordinated approach at regional common procurement rule is not feasible. (ZMFO, ORPF, Ongoing) level. Country Strategy Evaluation An IDEV 22 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Introduction

This report presents a summary of findings, Development Results (CEDR). This evaluation seeks conclusions and recommendations from an to: (i) provide an evidence-based assessment of the evaluation of the Bank's Country Strategies and relevance and performance of the Bank's strategic Program in Zambia over the period of 2002–2015. interventions in Zambia; and (ii) identify findings, This evaluation was conducted for two purposes: (i) conclusions and recommendations to inform to inform the development of the Zambia Country operations going forward. The evaluation covers all Strategy for 2016–2020; and (ii) to support lending and non-lending operations approved during IDEV's Comprehensive Evaluation of the Bank's 2002–2015. Background 23

Background

Economic Context In the 2000s, Zambia's economic situation improved with increased investment in mining, manufacturing, During 1964–1973, Zambia's economy was stable tourism and agriculture. With the sale of ZCCM – its mineral resources were well developed and completed, Zambia became eligible for debt relief the world market was generally favorable. In 1973, under the Highly Indebted Poor Countries (HIPC) oil prices rose sharply followed by a drop in copper initiative. After reaching the HIPC completion point prices. At that time, Zambia relied on copper for in 2005, Zambia's debt was reduced from USD 7.1 more than 90 percent of its export revenue.1 The billion to USD 4.5 billion. Under the Multilateral Debt result was continuous budget deficits and numerous Relief Initiative, the debt stock was further reduced to external financing arrangements leading to USD 0.5 billion by the end of 2006.5 serious economic distress. Throughout the 1980s, macroeconomic management was characterized by Zambia has demonstrated strong economic growth increasing state control of all industries, including over the evaluation period, with average GDP growth the mining sector through the creation of Zambia of six percent between 2004 and 2014, reaching a Consolidated Copper Mines (ZCCM). Under state high of 7.6 percent of GDP in 2010.6 The economy control, copper production decreased considerably has been driven by the service sector, which accounts because of poor investment in the sector, falling for 60 percent of GDP, followed by industry at 31.3 from over 700,000 tons in the early 1970s to just percent and agriculture at 8.6 percent.7 Whereas 256,884 tons in 2000.2 the agriculture sector accounts for 85 percent of total employment, the mining sector accounts for Zambia's economic woes were compounded in 1987 77 percent of Zambia's export revenue.8 Between when slow progress in implementing an IMF reform 2004 and 2010, Zambia benefitted from both a agenda led to ineligibility for further IMF support and steady rise in copper prices and a reduction of Country Strategy Evaluation a discontinuation of finance from bilateral donors. gross government debt. The HIPC Program and By 1990, as a result of heavy non-concessional Multilateral Debt Relief Initiative saw Zambia's gross borrowing, Zambia had the highest debt to GNP ratio in government debt fall from 78 percent of GDP in 2004 An IDEV the world at 225 percent.3 Liquidity problems resulted to 27 percent in 2006.9 in very high levels of arrears (USD 2.3 billion), including substantial arrears to multilateral finance institutions. Economic growth has since slowed, with GDP growth Following a political regime change in 1991, Zambia just 3.6 percent in 2015 and projected to remain close continued to implement IMF reforms, leading to a to three percent in 2016.10 After reaching a record resumption of large aid inflows. However, the economy high in 2011, copper prices fell more than 34 percent remained undiversified and continued to perform by 2013. This fall in copper prices coincided with a poorly, registering growth as low as 0.3 percent in loosening of fiscal management as the annual deficit the 1990s with inflation rising to 70 percent.4 As a returned to 10.6 percent of GDP in 2014.11 External result of rapid population growth, Zambia experienced borrowing has filled the gap, with gross government a reduction in real per capita income over the period. debt returning to 35 percent in 2014. As a result, 24 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

the Kwacha depreciated sharply, losing 61 percent mortality has decreased from 191 to 75 deaths per of its value in the first 11 months of 2015.12 To add 1,000 live births over the same period.18 Although to these difficulties, Zambia has been experiencing a progress has been made in reducing the prevalence of power crisis because of a considerable reduction in HIV/AIDS, it remains a serious development challenge: water levels in hydro-electric power stations caused an estimated 13.3 percent of Zambians aged 15-49 by poor rains. The resulting power outages have taken are HIV positive.19 a particular toll on the mining and manufacturing sectors.13 Mining companies are looking to scale back The majority (67 percent) of Zambians live in high-cost investments. In Zambia, this has translated rural areas. Geographical inclusion is a serious into the delay of new investments and job losses issue in the country with most social indicators (estimated at 7,700 in 2015).14 demonstrating an urban/rural divide. Whereas 90 percent of urban households have access to an As such, Zambia's medium-term economic prospects improved source of water, the same is true for only are subject to a degree of uncertainty due to some key 47 percent of rural households (national average of domestic risks, that is: (i) the expectation that copper 65 percent). Similarly, 56 percent of rural households prices will remain weak until 2018; (ii) a potential and 36 percent of urban households lack access to worsening of the power shortage due to delayed improved sanitation facilities.20 investment; (iii) failure of the government to control the growing public debt and deficit; and (iv) the potential for poor harvests to increase food prices which would Development Challenges place pressure on rural households.15 Poverty Reduction and Inclusive Growth

Social Context Despite Zambia's transition to lower-middle income country status in 2011, overall poverty levels have In 2014, the estimated population of Zambia remained high at an estimated 60.5 percent. was 15,721,343, with an annual growth rate of During 2006–2010, limited progress was made in 3.1 percent and an average life expectancy of reducing overall, rural and urban poverty.21 Zambia 60 years. The population is evenly split between men is a relatively unequal society, with a Gini Coefficient and women but is predominantly young with roughly of 57.5, ranked at 145 of 187 countries.22 half of the Zambian population under the age of 15.16 Furthermore, poverty in Zambia is overwhelmingly a rural phenomenon. Whereas urban poverty levels Overall, less than half of Zambians have completed are estimated at 35 percent, rural poverty levels are primary and secondary education with levels of estimated to be as high as 74 percent.23 educational attainment among women lagging behind that of men. Furthermore, whereas 83 percent of Part of the reason economic growth has not translated Zambian men are literate, just 67 percent of Zambian into poverty reduction is the fact that job creation women are literate.17 Some progress has been made has been concentrated among a small segment of in recent years against key health indicators such as highly skilled workers in the industrial and mining maternal, child and infant mortality but progress has sector. Whereas just six percent of the labor force been insufficient to meet the Millennium Development works within the industrial sector, the vast majority – Goal indicators, presented in Annex G. Infant mortality 85 percent – works in the agricultural sector. Rural has decreased from 107 to 45 deaths per 1,000 incomes in agricultural sector have been relatively live births during 1992–2014. Similarly, under-five stagnant since 2000.24 Background 25

Regional Integration 97 percent of large enterprises. Furthermore, only 2.3 percent of MSMEs were found to use formal As a land-locked country, promoting regional credit products compared to 45 percent of large integration and trade is particularly important to businesses.28 Increasing access to finance for small Zambia's development. Although many gains have enterprises faces numerous barriers. First of all, few been achieved, including the introduction of a one- banks possess branches in rural areas. Furthermore, stop border post with Zimbabwe in 2009, the quality it is estimated that 95 percent of MSMEs are not of infrastructure and inefficient border administration registered with any government authority, restricting continue to increase trade costs. The International access to formal finance.29 In addition, most SME Growth Centre U.K. found that on average, it requires clients do not possess adequate collateral or financial 44 days and USD 2,678 for Zambian firms to export documentation to qualify for a loan.30 However, low a standard container of goods by ocean transport.25 productivity and the high cost of financial services are These high costs limit global competitiveness and perhaps the most serious barriers – it is estimated that discourage the entry of new firms, particularly in the only 7-8 percent of MSMEs generate enough revenue manufacturing sector. to afford a loan from a formal financial institution, which can carry interest rates as high as 20 percent and typically require collateral of up to 200 percent of Access to Finance the loan value.31

The Zambian private sector is divided between large enterprises and MSMEs, with each group facing Vulnerability to Exogenous Shocks very different operating challenges. Industry surveys indicate that just a few thousand large businesses Zambia's economic dependence on copper poses produce the majority of Zambia's industrial output a serious economic challenge. During 2000–2014, and contribute the majority of tax revenues. The vast copper exports represented an increasing share of majority of businesses, however, are tiny, informal Zambia's export revenue, accounting for 62 percent owner-operated MSMEs involved in rural agricultural in 2000 and 78 percent in 2014.32 This increase is Country Strategy Evaluation production.26 Of the 4.1 million Zambians who are attributed to a rise in copper prices and a three-fold employed, 88 percent are estimated to work for increase in copper production. Lack of economic these small enterprises.27 diversification makes Zambia's economy vulnerable An IDEV to fluctuations in commodity prices, as demonstrated There is also a gap between larger enterprises and by the most recent economic downturn. As copper MSMEs in terms of access to formal finance. Only prices fall, annual revenue and the value of the 11 percent of MSMEs use transactional products, such Kwacha follow suit, frustrating development planning as bank accounts and money transfers, compared to and macroeconomic management. 26 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Overview of the Bank's Country Strategies and Portfolio

Overview of Strategic Priorities total of 43 operations amounting to UA 947.84 million, excluding cancelations. The portfolio of This evaluation covers three Country Strategy Papers projects under review comprises 34 projects, (CSPs): (i) the 2002–2004 CSP, extended to 2006; four studies, three emergency operations and (ii) the 2007–2010 Joint Assistance Strategy for two technical assistance grant.33 In addition to Zambia (JASZ); and (iii) the 2011–2015 CSP. The these national operations, there were also 19 Bank's strategic priorities for Zambia have evolved multinational operations amounting to UA 373.25 considerably over the evaluation period. The 2002– million which involved Zambia to varying degrees. 2004 strategy emphasized agricultural development, The evaluation focused on national projects, access to water supply and sanitation and the examining regional projects only where there was promotion of child welfare. Under the JASZ, strategic a tangible national component. Over the years, the emphasis on infrastructure development to support portfolio has grown in terms of number and amount the agricultural sector was retained in addition to committed (see Figure 1). the promotion of accountability and transparency in the management of public resources through the Nearly 45 percent of the Bank financing over the provision of general budget support. The 2011– evaluation period has been done through the ADF 2015 CSP signals a shift in the Bank's priorities, window, closely followed by the ADB window at with infrastructure development now placing greater 43 percent. The remaining financing has been emphasis on regional integration, particularly with provided through NTF (0.9 percent) and other regard to transport and power infrastructure. The sources (11.6 percent). In total, loans represent Bank's policy-based operations evolved to target 93 percent of net commitments with the remaining private sector regulatory reform. These activities 7 percent in the form of grants. The majority of the were complemented by private sector interventions Bank's support by value has been in the transport, aimed at increasing access to finance. power, WSS and agriculture sectors (31.7 percent, 19.3 percent, 14.3 percent and 10.9 percent respectively). However, agriculture, water supply Project Portfolio and sanitation and transport are prominent in terms of numbers, followed by finance, power and multi- During 2002-2015 period, the Bank approved a sector operations (see Figure 2). Overview of the Bank's Country Strategies and Portfolio 27

Figure 1: Number of operations and amount approved (2002–2015)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

An A n n

Figure 2: Number of operations and amount for sectors (2002–2015) Country Strategy Evaluation

Environment An IDEV

Ind / Mini / Qua

Finance

Social

Multi-Sector

Agriculture

WSS

Power

Transport

n An A n

Evaluation Approach and Methodology 29

Evaluation Approach and Methodology

Evaluation Issues and Questions over 200 project documents and other literature, collected feedback from over 175 stakeholders The evaluation primarily addresses four evaluation and beneficiaries and conducted in-depth site issues: relevance, effectiveness, efficiency, and visits of 13 projects. A full listing of supporting sustainability. However, other strategic issues relevant documents, interviews and site visits conducted to the Bank's operations are also examined including: is provided in Annex C. For reporting purposes, gender, inclusiveness and green growth; quality at each evaluation issue is assessed on a six-point entry; supervision; leveraging and innovation. These scale ranging from Highly Unsatisfactory to Highly evaluation issues were used to identify a total of 29 Satisfactory (Annex D). evaluation questions (Annex A). There are some notable limitations to the evaluation methodology. First, it was often not Methodology and Lines of Evidence possible to attribute and quantify the Bank's contribution to sector level outcomes. Furthermore, An evaluation matrix and theory of change were the evaluation faced challenges regarding the developed to guide data collection and analysis, quality and availability of supervision data. Project including key indicators and judgment criteria, to Logframes were often found to lack baseline provide a transparent account of how IDEV has data or possess flaws in the intervention logic, examined the achievement of results across each such that supervision data did not credibly report sector. See Annex B for the evaluation matrix and on outcomes. Finally, due to time and logistical Country Strategy Evaluation intervention logic. constraints, it was not possible to conduct detailed interviews with all beneficiary groups. To account Evaluation issues and questions were addressed for these challenges, the evaluation team sought An IDEV through triangulation of evidence from four to triangulate supervision data with evidence from different sources: (i) a review of project documents; other sources, including interviews, site visits, (ii) a literature review; (iii) stakeholder interviews; external literature and evaluative evidence from and (iv) site visits. In total, the evaluation reviewed other DPs. 30 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Evaluation Findings

Relevance The 2011-2015 CSP's emphasis on the development of economic infrastructure, including domestic The Bank's CSPs have been well-aligned with the and regional transport and power infrastructure, is priorities set in GRZ's national development plans reflective of objectives identified in the Sixth National over the evaluation period and have responded to Development Plan (SNDP), particularly with respect changes in these priorities over time. The Bank's to increasing economic growth through removing project portfolio has generally been aligned with infrastructure-related bottlenecks. Interventions Country Strategies over the period as well as with targeting improved economic and financial the needs of targeted beneficiaries. governance reflect the priorities of Zambia's Vision 2030 and Revised SNDP with respect to increased

Table 1: Relevance rating

Criteria Rating Alignment of CSPs with National Development Plans Satisfactory Alignment of the Project Portfolio with CSPs Satisfactory Alignment of Projects with the Needs of Beneficiaries Satisfactory Overall Rating for Relevance Satisfactory

Alignment with National Development Plans access to affordable finance, streamlined business registration and licensing processes and facilitation Over the course of the evaluation period, of regional trade. Alignment of the Bank's CSPs with the Bank's CSPs have been well-aligned National Development Plans is further illustrated in with Zambia's national development plans. Annex F. Operational priorities are reflective of both national development priorities and the Bank's areas of comparative advantage. Furthermore, the Bank's Alignment of Approved Projects with Country CSPs have been responsive to changes in national Strategies development priorities over time. Provision of general budget support to address financial and Barring small exceptions, the alignment of Bank budgetary transparency and accountability identified projects to CSPs has been satisfactory across in the 2005-2006 CSP Update and the 2007 sectors. Despite targeting job creation and economic JASZ reflected the GRZ's increased emphasis on development, the alignment of the Bank's private good governance expressed in the Fifth National sector operations has been limited by the practice of Development Plan (FNDP). identifying private sector operations opportunistically Evaluation Findings 31

under the 2002-2004 CSP and the 2007-2010 Alleviating National and Regional Development JASZ. Under the 2011-2015 CSP private sector Constraints. The poor quality of the transport network operations are better integrated into the Bank's is a serious constraint for private sector development strategic priorities. For example, "supporting access with transport challenges adding 40 percent to the to finance for SMEs through financial intermediation" cost of production for exports.34 The Bank's projects in is meant to contribute to the strategy outcome of the Transport Sector have sought to increase access improved economic and financial governance. to markets and economic growth by providing reliable, seamless transport infrastructure along regional trade Social sector projects have not always reflected routes. For example, the Nacala Corridor Road Project the strategic priorities of the CSPs. Although the will connect Zambia's major productive centers to the 2002-2004 CSP targeted increased access to basic Port of Nacala in Mozambique while the Kazungula services, this objective was expressed in terms of Bridge and Chinsali-Nakonde Corridor will connect the water supply and sanitation infrastructure. Similarly, Copperbelt to the Port of Dar es Salaam. the health and education components of the first Poverty Reduction Budget Support (PRBS) project The Itezhi-Tezhi Power Generation project addresses also aligned indirectly to the 2002-2004 CSP by the ongoing power crisis in Zambia by increasing promoting decentralization of service delivery. installed generating capacity. However, the fact that the Bank's investments have targeted hydropower Two interventions in the social sector were approved brings up more nuanced issues. Hydropower is the under the 2011-2015 CSP, although support to cheapest means of power generation and is better vocational training and skills development is not suited to Zambia's current tariff structure. However, explicitly mentioned as an operational priority in the current energy crisis is partly due to an overreliance the strategy itself. The Support to Science and on hydropower, exacerbated by declining water levels Technology Education Project is identified in the CSP in dam reservoirs due to reduced rainfall. The Bank's Logframe to address skills gaps and reduce barriers complementary Cost of Service Study is particularly to private sector development. The health and relevant to the GRZ's need to achieve cost-reflective education components of the Fourth PRBS project, tariffs and promote private investment in other sources Country Strategy Evaluation however, are not clearly aligned with the Bank's CSP of clean energy generation, including solar. over this period. For the PRBS Projects, beneficiary needs were An IDEV expressed in terms of financing requirements for Alignment of Projects with the Needs of the implementation of the Fifth and Sixth National Beneficiaries Development Plans. Each individual project identifies expected budget shortfalls over the period and the Except for a few exceptions, the alignment of the extent to which the shortfall would be addressed Bank's projects with the needs of beneficiaries through general budget support. With respect to has been satisfactory. Projects in the transport, skills development, the Support for Science and multi-, social and power sectors have addressed Technology Education Project (SSTEP), responds to the alleviation of development constraints at the a request for Bank Group support from the GRZ to national or regional level. In contrast, projects in support a nation-wide program to create one million the agriculture, WSS and private sector targeted the jobs for youth and enhance skill development in needs of specific beneficiary groups. agriculture, mining, tourism and energy. 32 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Targeting Specific Beneficiary Groups. Each of allowing the investment to proceed. Meanwhile, the Bank's agricultural projects have addressed the Lines of Credit (LOC) Projects were framed in terms needs of specific groups of beneficiaries in terms of of the business goals of the recipient FIs, including increasing productivity, improving food security and business expansion, increased lending to SMEs in reducing poverty. For example, the SIP addressed particular sectors and introduction of new SME- development needs arising from the resettlement targeted commercial lending products. of the Tonga Community during the construction of the Kariba Dam in the 1950s. Displaced farmers LOC Projects and the Partial Credit Guarantee Facility were engaged in rain-fed subsistence farming on (PCGF) have been less successful in targeting the marginal lands. The CWMIP selected beneficiary needs of beneficiaries due to the absence of means communities on the basis of agricultural productivity to improve the terms of finance. Cost of finance below the national average despite being endowed remains one of the fundamental challenges for small with favorable climate conditions, fertile soil and businesses.35 Furthermore, it was never determined water resources. whether intended beneficiaries such as microfinance institutions would meet the due diligence Similarly, beneficiary districts for Bank's WSS requirements of the targeted financial intermediaries projects were selected based on particularly low (FIs), such that some intended beneficiaries did not levels of access to improved drinking water sources access to the project funds. and sanitation facilities. For example, communities covered under the NRWSS Project were found to have average rates of 21percent and 4percent for Effectiveness drinking water sources and sanitation facilities, respectively. In the case of the Nkana WSS project, Achievement of project outputs for completed the intervention was meant to increase the ability of projects across each sector has been moderately the Nkana Water and Sewerage Company to provide satisfactory, with 78 percent of outputs delivered services to fast-growing urban centers within its successfully. However, achievement of project area of operations. outcomes has been moderately unsatisfactory overall, with progress demonstrated toward 67 Private Sector projects were well-aligned to percent of outcomes.36 At the strategy level, the needs of targeted companies and financial the Bank's interventions have made a tangible intermediaries (FIs), but did not always fully address contribution toward the development of an enabling the needs of SMEs. The Lumwana Mine addressed business environment and increasing access the needs of Equinox Minerals, the project sponsor, to basic infrastructure and services. Yet limited by addressing the burden of major infrastructure progress has been achieved in strengthening public constraints which raise development costs for mining financial management and promoting agricultural operations. The Bank's participation in the project productivity and diversity. Overall progress is rated also secured the participation of other lenders, as moderately unsatisfactory.

Table 2: Effectiveness rating

Criteria Rating Delivery of Project Outputs Moderately Satisfactory Achievement of Outcomes Moderately Unsatisfactory Overall Rating for Effectiveness Moderately Unsatisfactory Evaluation Findings 33

Private Sector suggest that the SMEs which benefited from the LOC to ZANACO and Investrust have contributed at least Across the Bank's private sector interventions, 1.7 billion ZMW.39 87 percent of outputs were delivered as planned. Information from the project XSR, confirmed by In terms of job creation, Private Sector interventions site visits, demonstrated that all expected outputs have been linked to the creation of at least 5,700 were delivered for the Lumwana Copper Mine, direct jobs. Supervision documents indicate that including development of the mine, infrastructure LOC projects contributed to job creation among improvements, and environmental and social the targeted FIs (425 jobs) and businesses which activities. However, just 84 percent of outputs were accessed the LOC (1,007 jobs).40 With respect to delivered for financial sector projects. Meanwhile, indirect job creation, Barrick has concluded local for two of the LOCs, funds were not disbursed to service delivery contracts in excess of USD 500 the targeted number of SMEs so consequentially million with businesses in the Lumwana area as some target beneficiaries, such as microfinance part of its Local SME Development Program – an institutions, did not access the funds. In the case initiative undertaken independently as part of of CETZAM Financial Services, 46 percent of the Barrick's Corporate Social Responsibility activities.41 funds were used to cover operating costs outside the The International Committee for Mines and Minerals scope of the loan agreement.37 Delivery of technical (ICMM) estimates that for every direct mining job assistance (TA) to FIs as part of the LOC projects created in the Solwezi area, four additional jobs have was more successful in terms of adding new skills been created elsewhere in the economy.42 and systems. This included training of business development service providers FI staff in credit Profitability of the companies supported by the Bank assessment techniques for SMEs. These successes has been uneven. The Lumwana Mine went through are worth replicating. However, the installation of a period of heavy losses which threatened continued LOANCOM and provision of training in environmental operations in 2012. The mine returned to modest impact assessment were less successful due to lack profitability in 2013 after the implementation of cost- of demand among targeted FIs. cutting measures.43 For LOC projects, subproject Country Strategy Evaluation data demonstrated that the majority of enterprises Expected outcomes among private sector projects which received loans have been profitable and, in the included: (i) increased government revenues; (ii) case of ZANACO, companies registered an average An IDEV job creation; and (iii) profitability of the companies increase in profitability of 197 percent. supported. The Lumwana Copper Mine was expected to improve access to basic services and Works implemented as part of the Lumwana infrastructure in the Lumwana and Solwezi districts Copper Mine Project have increased access to whereas outcomes specific to LOC projects include: basic services and infrastructure, including (i) increased SME lending; and (ii) improved terms roads, electricity, ICT, and health services. Since of finance. the development of the mine, access to electricity in the Solwezi area has increased fivefold.44 For With respect to Government Revenues, EITI education, the teacher to student ratio has improved Reconciliation reports indicate that the Lumwana from 1:63 to 1:53 and secondary school attendance Mine has generated 3.5 billion ZMW in government has increased to 45 percent, meeting the national revenues since 2011,38 whereas subproject data average.45 34 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Progress achieved in Increasing SME Lending was generation levels were approximately 50 percent of limited by the failure of CETZAM Financial Services, the expected level due to inadequate water level in for which operations were taken over by the Central the Kafue Gorge. However, as of May 2016, favorable Bank of Zambia in May, 2016. However, supervision weather conditions have since allowed the plant to reports indicate that both ZANACO and Investrust reach its full generation capacity. saw increases in SME lending as a proportion of the overall lending portfolio from 25 percent to 30 Implementation of the project has contributed to job percent of total loans for ZANACO and from two creation, with stakeholders from ZESCO, ITPC and percent to 18 percent of total loans for Investrust. district governments confirming that members of the LOC projects were not successful in improving the local community were hired for initial infrastructure terms of finance as average loan tenor and interest works, brush clearing and erection of transmission rates did not differ significantly from the rest of towers. However, ensuring permanent local the FIs' portfolio. Furthermore, average collateral employment has been challenging given the skill secured under the Partial Credit Guarantee Facility requirements for operation and maintenance activities. (PCGF) provided to ZANACO remained high at 183 percent. Project stakeholders confirmed that it was Works undertaken by ITPC have contributed to not possible to provide financing to SMEs on terms increasing access to basic infrastructure in that are different from the rest of their portfolio. Itezhi-Tezhi district, thereby promoting private sector development. A water treatment plant and transformers have been installed for use by the Power Sector community and will eventually serve as a source of revenue for the district. Local government officials in Overall achievement of outputs for the power Itezhi-Tezhi noted that the power plant has attracted sector is rated as 80 percent. The Itezhi-Tezhi potential investment from large companies, including power plant was fully commissioned in January 2016, Parmalat, but this investment has been delayed so with accompanying transmission line packages far due to the inadequacy of transport infrastructure commissioned in November and December 2015.46 linking the district to major commercial centers. However, the implementation of the Mumbwa and Further infrastructure upgrades would be useful in Lusaka West substations were still ongoing at the attracting additional investment to the area. end of the evaluation. The Mumbwa substation was commissioned in November 2015 through the installation of a decommissioned transformer, Agriculture Sector enabling ZESCO to fulfil its power supply agreement with First Quantum Minerals. The planned Cost of The effectiveness of the Bank's agricultural Service Study, however, has not progressed due to interventions are rated moderately an unsuccessful procurement process.47 unsatisfactory. The majority of projects did not fully deliver the planned outputs and only moderate With respect to outcomes, the Itezhi-Tezhi power progress was made toward expected outcomes. project was expected to contribute to: (i) increased power generation; (ii) job creation; and (iii) increased Completion of PRODAP outputs was rated at 34 access to basic infrastructure. With respect percent, with ten percent of outputs considered to power generation, the Itezhi-Tezhi Power to be fully implemented. For the SIP, delivery of Corporation (ITPC) reports that, subsequent to the outputs was rated to be 70 percent, with just four commissioning of the plant in January 2016, initial of six planned irrigation and outgrower schemes Evaluation Findings 35

considered to be fully implemented (Nega-Nega The CWMIP contributed to the increased use of (595ha), Sinazongwe (100 ha), Nzenga (95ha) and improved irrigation methods among beneficiaries. Buleya Malima (45ha)). To date, 200 ha of sugar Cultivated land in the project area increased by 80 at Nega Nega have been harvested in 2016 while percent and fewer beneficiaries relied solely on planting of crops at Nzenga is on-going. However, bucket and drip irrigation. In total, irrigated land in improved institutional management entities were the project area increased by an average of 123 installed at the three sites and training in farming percent per household.50 techniques, business planning, record keeping and HIV/AIDS awareness exceeded targets. All expected Beneficiaries of both the SIP and CWMIP CWMIP outputs were delivered including: (i) value demonstrated increased incomes. Annual incomes chain analyses; (ii) training of farmers in horticulture, for farmers within the Buleya Malima irrigation irrigation, soil and water management; (iii) drilling of scheme increased from 479 ZMW in 2004 to wells; (iv) establishment of demonstration gardens; 11,363 ZMW in 2014 (2,372 percent), whereas in and (v) training in business planning and finance. Nzenga, annual incomes increased to an estimated 20,000 ZMW. For the CWMIP, farmers in Mkushi, Achievement of outcomes was uneven across the Masaiti, Kapiri Mposhi and Chingola reported that agriculture projects, with limited progress toward their income had, on average, increased by a factor outcomes of PRODAP. The remaining projects, of eight.51 however, have made progress toward expected outcomes, including increased incomes, access to markets and increased use of improved irrigation Multi-Sector and Social Sector methods. In the case of PRODAP, no changes were observed for health and social outcomes, including The Bank’s Poverty Reduction Budget Support incidence of waterborne diseases or literacy rates (PRBS) program has a large social component among the project beneficiaries. Fish production in addition to reforms targeting improved Public within the project area has actually decreased by Financial Management and private sector regulatory

58 percent since 2004 and the rate of post-harvest reform. Country Strategy Evaluation losses has remained unchanged. Although a 25 percent increase in the incomes of fisherman in the Delivery of outputs for the PRBS was area was reported, it was not clearly attributable satisfactory in terms of the implementation of An IDEV to the project.48 On account of these challenges identified triggers and reforms.52 Performance the project was cancelled prematurely and a new was particularly strong for program components successor project for the development of Lake which sought to strengthen transparency functions Tanganyika has been launched. (100 percent), improve access to health and education services (95 percent) and create a business enabling With respect to access to markets, the Manyonyo environment (95 percent). However, progress was irrigation scheme was able to secure a partnership far less satisfactory for outputs related to PFM agreement for sugarcane with Zambia Sugar while (37.5 percent), including the implementation of the Nzenga irrigation scheme was able to secure IFMIS and the Treasury Single Account (TSA). a similar market arrangement with a South African outgrower company to grow chilies and potatoes. With respect to governance components of the Beneficiaries of CWMIP were able to access finance PRBS Program, key achievements include: (i) new to grow their businesses with 1,193 farmers procurement policy and procurement guidelines; (ii) obtaining loans through a partnering FI.49 an e-registry of business licenses; and (iii) approval 36 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

of a national anti-corruption plan. The GRZ also OAG, particularly with regard to the inadequacy and delivered a number of outputs in the health and unpredictability of financial resources and insufficient education sectors, including: (i) hiring of 5,000 staffing.55 frontline health workers; (ii) the construction of eight hospitals and 231 health posts; and (iii) the Progress in strengthening the national construction of 1,000 basic schools and 11,000 procurement system was more modest. With the classrooms and the hiring of 13,000 teachers. implementation of the new Public Procurement Furthermore, releases from the Ministry of Health Policy, the Zambia Public Procurement Agency to District Boards increased from 13 percent to 16 (ZPPA) was empowered to seek written justification percent of annual budgets.53 for the use of less competitive procurement methods and conduct inspections of the procurement activities Overall, the achievement of outcomes for the of MPSAs. However, there continues to be a lack of Bank's PRBS operations in the multi- and social data on the use of less competitive procurement sectors is rated moderately satisfactory. Progress methods and Zambia continues to lack an impartial was achieved toward strengthening accountability and complaints procedure. The Auditor General has transparency functions, improving the business and noted that irregularities continue to be found for the regulatory environment and increasing access to health majority of procurement processes due to a lack and education services. However, limited progress was of understanding of procurement guidelines.56 The achieved in terms of strengthening budget credibility extent of the progress achieved is demonstrated by and execution. a progression in PEFA scores on indicators PI-19 "Competition and value for money in procurement" Progress has been achieved in strengthening the GRZ's and PI-26 "Scope, nature and follow-up of external accountability and transparency functions including audit (see Table 3 below). anti-corruption, procurement and external audit. Implementation of the National Anti-Corruption Plan has Promotion of private sector regulatory reform contributed to improved scores on international indices has been more successful. Since 2006, notable of accountability and corruption, including Transparency reductions have been observed in the number International's Corruption Perception Index and the of days to register a business, register a property Transparency, Accountability and Corruption index of and import goods, all of which have been targeted the CPIA (see Figures 3 and 4). under the PRBS Program. The number of days to export, however, has remained relatively stable With respect to external audit, annual audit coverage (see Figure 5). Some reforms have contributed to a has increased to 75 percent of public expenditure and genuine decrease in the cost of doing business. For 50 percent of public entities.54 Detailed follow-up on example, the Business Compliance License List was audit recommendations has also improved, reaching reduced from 517 licenses to just 150, resulting in 99 percent of recommendations in 2010. However, an annual reduction in the cost of business licensing concerns persist regarding the independence of the by 32 percent.57

Table 3: PEFA Scores - Procurement and External Audit

Progress on Key PEFA Indicators Indicator 2005 2008 2012 PI-19 Competition and value for money in procurement D+ C+ D+ PI-26 Scope, nature and follow-up of external audit B+ B B

Source: PEFA Reports Evaluation Findings 37

Figure 3: Zambia Corruption Perceptions Index scores (2007–2015)

2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Transparency International

Figure 4: Zambia CPIA Scores - Accountability Transparency and Corruption (2007–2015)

Country Strategy Evaluation An IDEV

2007 2008 2009 2010 2011 2012 2013 2014 Source: CPIA, World Bank Group 38 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Figure 5: Ease of Doing Business Indicators (number of days)

2006 2008 2010 2012 2014

E

n I

Source: World Development Indicators

Progress has also been achieved in terms of poor enforcement of regulations.60 PEFA scores increasing access to health and education. for the key indicators (see Table 4) suggest Targets were achieved for increased proportion of that budget credibility and execution remain supervised childbirths, increasing from 46 percent problematic. in 2010 to 51.2 percent in 2012.58 Furthermore, the number of districts with pupil to teacher ratios over 80:1 fell from 47 in 2006 to 14 in 2010.59 Water Supply and Sanitation Sector

Finally, limited progress has been made in Delivery of outputs among the Bank's strengthening Budget Credibility and Internal completed WSS projects has been satisfactory Controls. Although the implementation of internal at 90 percent across projects. Outputs delivered control systems, including IFMIS and the Treasury include the construction and rehabilitation of Single Account have recently made some progress, water points, boreholes, water treatment plants, PEFA Reports indicate that there continues to be sewage infrastructure and latrines. Achievement "widespread" irregularities in commitments with of outcomes has been similarly satisfactory. Evaluation Findings 39

Table 4: Progress on key PEFA indicators

Progress on Key PEFA Indicators Indicator 2005 2008 2012 PI-1 (i) Budget Credibility - Aggregate expenditure out-turn compared to C B D original approved budget PI-16 Predictability in the availability of funds for the commitment of D+ D+ C+ expenditures PI-20 Effectiveness of internal controls for non-salary expenditure C C+ C+

Source: PEFA

The Bank's activities have contributed to improved of the interventions implemented under the NRWSSP, water infrastructure in over 25 different urban incidence of diarrhea fell from 50 percent to 35 and rural districts, including the construction and percent across the Northern and Luapula provinces. rehabilitation of: (i) over 8,000 boreholes and water points; (ii) over 3,000 latrines and sanitation facilities; (iii) 13 treatment plants; and (iv) multiple Transport Sector elements of sewage infrastructure. Furthermore, the Bank has contributed to the establishment of a All the ongoing transport projects have faced commercial utility serving multiple districts.61 considerable implementation delays for the delivery of outputs. About 50 percent of the Over 1,500,000 people benefitted from improved physical works were completed for the Nacala water sources implemented through the Nkana Corridor project by the end of September 2015, and 8 Centers and RWSSP projects, with over 95 but 95 percent of the original project timeframe percent of individuals in targeted areas having had elapsed. The civil works are now expected to access to an improved water source. Furthermore, be completed in 2016. However, implementation of hours of service increased from an average of five the ESMP has been moderately satisfactory with Country Strategy Evaluation hours per day to 16 hours for the Nkana project compensation provided to all affected kiosk owners, and 22 hours for 8 Centers project. With respect construction of improved market infrastructure, to sanitation, over 800,000 people gained access drilling of nine boreholes and provision of supplies An IDEV to improved sanitation facilities, including 9,924 to local health centers to support ongoing HIV/AIDS individuals from unplanned settlements as well as sensitization. However, three of the nine boreholes public institutions such as health centers and bus provided were no longer operational.62 stops. However, achievements in the sanitation components have fallen short of the targets, The Kazungula Bridge project has delayed due to especially in the construction of on-site sanitation a procurement issue. A dispute over the contract facilities. Progress in increasing collections was award resulted in the withdrawal of funds by JICA uneven with collection ratios declining for the for the bridge works. The Bank is continuing to fund Nkana project and failing to meet targets for the 8 other aspects of the project, excluding the bridge Centers project. All of the completed projects noted a works, due to the issues arising with procurement. decrease in waterborne diseases with the Nkana and The bridge works are now underway and progress 8 Centers project documents reporting a 43 percent has been made in the resettlement of project and 48 percent decrease in diarrhea and dysentery affected persons. At the end of the evaluation period, among project beneficiaries respectively. As a result however, just 0.98 percent of the project funds were 40 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

disbursed, 41 months subsequent to the approval of works implemented or ongoing over the course the projects. As the projects are still ongoing due to of the evaluation period. There is some evidence the delays a credible assessment of outcomes is not that ZMFO has used knowledge work to inform and possible. Nevertheless, these project are regarded as support policy dialogue, hosting a seminar on "Jobs likely to achieve their intended outcomes. and Growth" in 2014 and engaging in a High Level Policy Dialogue on youth employment in 2012.

Policy Dialogue and Knowledge Work Knowledge work has also been used to add value to the Bank's operations. The Nacala Corridor and Prior to the opening of ZMFO, the Bank was not North-South Corridor Studies are informing the able to participate effectively in regular policy implementation of the Nacala Corridor Road and dialogue with the GRZ. However, since 2006, the the Kazungula Bridge projects. The Cost of Service Bank became an active participant in the donor Study for the energy sector will help address risks coordination efforts in Zambia, leading the posed to private sector power investments such as Cooperating Partners Group troika in 2012, as the Itezhi-Tezhi power project by the lack of cost- well as leading the agriculture, transport and reflective electricity tariffs. Delivery of knowledge WSS working groups at various points over the work, however, has often not corresponded with 2011-2015 CSP period. The Bank is also noted by items planned in the CSP (see Table 5 below). DPs as a prominent dialogue partner for the PAF working group under the PRBS and regard it as possessing a privileged relationship with the GRZ Achievement of Strategy Outcomes regarding policy dialogue. The strategy-level outcomes reflective of the CSPs for Delivery of knowledge work has intensified Zambia include: a) creation of an enabling business over the evaluation period, with a total of nine environment; b) transparent and accountable

Table 5: Planned and Delivered Knowledge Work

Proposed 2002-2006 Delivered 2002-2004 ❙❙ Public Expenditure Review None ❙❙ Country Financial Accountability Assessment ❙❙ Study on Financial Management of HIPC Resources Proposed 2007-2010 Delivered 2007-2010 ❙❙ Study for the Creation of a Free Trade Area (COMESA) ❙❙ Nacala Corridor Studies (2010) ❙❙ Public Expenditure Review of the Agriculture Sector ❙❙ SADC North-South Corridor Study (2010) Proposed 2011-2015 Delivered 2011-2015 ❙❙ Support for the Preparation of the Zambia Transport Sector ❙❙ 2013 Update of Labor Force Survey (2013) Master Plan ❙❙ Study on Zambia's Domestic Resource Mobilization Potential ❙❙ Domestic Resource Mobilization for Poverty Reduction (2014) ❙❙ Zambia Private Sector Profile ❙❙ Zambia Private Sector Profile (2015) ❙❙ Constraints Facing Woman Entrepreneurs and Cross-border ❙❙ Zambia Manufacturing Study (2015) Traders ❙❙ Preparation of a Multi-modal Transport Sector Master Plan ❙❙ Gender-responsive Audit of the Land Resources and Tenure (ongoing) System ❙❙ Energy Cost of Service Study (ongoing) ❙❙ Study of Zambia-DRC Trade (ongoing)

Source: 2005, 2010, 2015 CSP Completion Reports Evaluation Findings 41

public financial management; c) increased access and ZANACO and total disbursements of just 13.5 to basic services; and d) increased agricultural million USD. It was unclear that these projects were productivity and diversification. The available successful in reaching underserved groups. Although evidence suggests that the Bank has made a the PCGF was successful in expanding ZANACO's tangible contribution to improving the business agriculture portfolio, subprojects under the PCGF and environment and increasing access to basic the LOC were dominated by Lusaka-based businesses infrastructure and services. However, limited (65 percent and 70 percent respectively). Feedback progress has been achieved with respect to from ZANACO confirmed that loan recipients were all strengthening PFM and promoting agricultural identified from its existing SME clientele, such that diversification. only one PCGF recipient was identified as a ‘first-time borrower’ and only two businesses were identified as Improved Business Environment ‘women-owned.

Contribution to improving the business environment Another missed opportunity is the TA provided to was assessed in terms of: (i) ease of doing business; Business Development Service Providers and (ii) access to finance; and (iii) business development. Business Associations. Whereas 15 percent of the These outcomes were supported directly by the initial 105 businesses which received the training Bank's interventions in the private sector as well as reported to have received new financing with 11 through the PRBS. having received loans from Investrust,65 there was no long-term monitoring of training recipients Zambia's Ease of Doing Business ranking has which would identify whether the training has improved from 92 in 2006 to 83 in 2014.63 Similar indeed enabled them to eventually access finance. improvement has been observed for the CPIA Business Opportunities were also missed in increasing Regulatory Environment Index, which improved from the impact of the Bank's large private sector 3.0 in 2004 to 4.17 in 2015. Improvement in these investments in Zambia, namely the Lumwana mine scores is partially attributable to reductions in the time and the Itezhi-Tezhi power plant. Although these necessary to register a business, register a property, two investments have contributed to local business Country Strategy Evaluation import and export, all of which were addressed under development by increasing access to services the PRBS program. As a reflection of the improved and implementing local supplier development business environment, formal business registration programs, additional large business investments An IDEV has increased and intensified, with 5,318 new were being prevented by the poor state of transport businesses having registered in 2007 and 10,199 in infrastructure connecting the project sites to 2015 (see Figure 6). major trade centers. Both ITPC and Barrick have implemented comprehensive Corporate Social Regarding access to finance, domestic credit to the Responsibility activities which are addressing private sector (percent GDP) has increased during development constraints in the surrounding the evaluation period (see Figure 7). Furthermore, communities. Complementary support from the proportion of private firms using banks to finance the Bank to upscale these activities and further investment increased from 10.2 in 2007 to 17.2 in address constraints to private sector development 2013.64 However, the extent of the Bank's contribution may increase the catalytic potential of the Bank's to these changes was modest, given that fewer than projects in terms of business development. 150 businesses are confirmed to have accessed However, such opportunities are also limited by finance through the Bank's LOCs to Investrust the small number of private sector investments in 42 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Figure 6: No. of new businesses registered during 2007-2015

2007 2008 2009 2010 2011 2012 2013 2014 Source: World Development Indicators Figure 7: Domestic credit to the private sector (percent GDP) 2006-2014

2006 2007 2008 2009 2010 2011 2012 2013 2014

D D Evaluation Findings 43

Zambia which meet the Bank's minimum threshold National trends for access to improved water for project value. and sanitation sources have been positive, with the percentage of Zambians with access to an Transparent and Accountable PFM improved water source rising from 55 percent in 2002 to 65 percent in 2014. These gains were Contribution to transparent and accountable PFM largely due to increased access in rural areas, has been assessed in terms of: (i) gross government minimizing the disparity between urban and rural debt; (ii) budget deficits; and (iii) public sector wage access to water. In contrast, limited improvement expenditure. Between 2006 and 2011, the Bank's has been seen in access to improved sanitation efforts to strengthen macroeconomic management (see Figure 8). through general budget support projects appears to have contributed to reductions in gross government The Bank's contribution to these changes has been debt and reduced annual deficits. However, gross sizable. Based on urban and rural population data government debt has since increased, reaching 35.1 for 2002 and 2014, at the national level, 2.05 percent of GDP in 2014. Similarly, annual deficits million people in rural areas and 2.15 million in have returned to 2004 levels, reaching 10.6 percent urban areas have gained access to an improved (see Table 6 below). Furthermore, annual wage water source over this period. Meanwhile, the expenditure has accounted for an increasing share Bank's completed projects in the water sector have of GDP and, in raw terms, has increased by more benefitted over 1.5 million people. than 400 percent, from 2,968 billion ZMW in 2006 to 11,897 billion ZMW in 2014.66 These changes With respect to access to electricity, the Bank coincide with a decline in scores on financial has contributed 120 MW to Zambia's installed governance indices, including CPIA scores for Fiscal generation capacity through the implementation and Debt Policy, which each reduced from 4.5 in of the Itezhi-Tezhi power project. This contribution 2009 to 3.0 in 2015.67 is moderate considering total installed capacity of approx. 2,300 MW.68 Although these levels

Increased Access to Basic Services currently outstrip demand, power is being produced Country Strategy Evaluation far below capacity due to low water levels in dam Bank's interventions in the WSS, power and reservoirs. The size of the current power deficit is social sectors have made a tangible contribution estimated to be 500 MW.69 There is a clear need An IDEV to increasing access to these basic services. to expedite investment in the sector. The Ministry

Table 6: Progress against selected macroeconomic indicators

Indicator 2004 2006 2008 2010 2012 2014 Real GDP growth (non-oil) 5.4 6.2 5.7 7.6 7.2 5.6 Gross Government Debt (percent GDP) 78.0 27.4 26.7 22.1 25.5 35.1 Overall Budget Balance (percent GDP) -10.3 -8.3 -4.9 -3.0 -3.2 -10.6 Annual Arrears (percent of annual 12.0 6.4 1.9 3.7 1.5 2.5 expenditure) Wages and salaries (percent public 29.4 31.6 34.1 41.9 34.0 38.7 expenditures)

Sources: IMF World Economic Outlook, World Development Indicators 44 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Figure 8: Access to improved water and sanitation source

2002 2014 2002 2014 Water Supply Sanitation

n n

Source: World Development Indicators

of Energy estimates that demand is increasing at National health and education outcomes identified the rate of 150-200 MW per year due to growth in as part of the Bank's PRBS activities include: (i) economic activities. increased childbirths assisted by a skilled attendant; (ii) infant immunization rates; and (iii) primary school Although access to electricity has increased by completion rates. Progress has been made against 11 percent since 2000,70 the timing of the Bank's all of these indicators. Furthermore, the gap in investments precludes any direct contribution. Based primary school completion rates between boys and on feedback from ITPC and ZESCO it is expected girls has nearly vanished (see Table 7). that the project will contribute to increased access to electricity for districts surrounding the power However, other indices for access to health services plant, the Mumbwa substation and the Karumbila suggest that additional efforts are necessary. Zambia mine resulting from the construction of new public continues to possess less than half of the WHO infrastructure works. However, the power generated recommended Human Resources for Health (HRH) at by the plant will primarily supply the Karumbila 0.06 physicians per 1,000 people and 0.77 nurses mine, for which energy requirements are expected and midwives per 1,000 people.71 Furthermore to outstrip the maximum generation capacity of the national pupil to teacher ratios were stable at 48:1 plant at 200 MW. during the evaluation period.72 Evaluation Findings 45

Table 7: Progress on selected health and education indicators (2002-2014)

Indicator 2002 2014 Births assisted by a skilled attendant (percent) 42 64 Children 12-23 months fully immunised 60 69 Primary school completion - male (percent) 57 81 Primary school completion - female (percent) 52 80

Source: World Development Indicators

Agricultural Productivity and Diversification purchased by the Food Reserve Agency. Together, these two programs are estimated to account for The Bank has sought to promote economic growth and nearly 80 percent of expenditures by the Ministry reduce poverty by increasing agricultural productivity of Agriculture and Livestock. The program has also and trade. National statistics suggest that although demonstrated history of inefficiencies, including overall agricultural exports have increased, little overspending, poor targeting of beneficiaries, leakages progress has been made in agricultural diversification. and delays which limit overall productivity and income Agriculture as a share of total exports has decreased gains.76 Furthermore, DPs reported that the program from 11.54 percent in 2002 to 7.49 percent in 2014. serves as a disincentive for diversifying agricultural However, overall exports have increased by a factor of production away from maize. In 2015, however, the 10, such that the gross value of agricultural exports program has shifted to a voucher system, allowing has actually increased by over USD 600 million.73 Zambian farmers to select the inputs of their choice.

There is also evidence of increased land cultivation and use of improved irrigation techniques. Between Efficiency 2008 and 2012, total hectares cultivated increased by 16 percent, whereas total irrigated land in Zambia Overall, the efficiency of the Bank's portfolio is rated increased by seven percent between 2001 and 2011, as unsatisfactory owing to considerable project Country Strategy Evaluation suggesting that some gains have been achieved for implementation delays and portfolio disbursement agricultural productivity. ratios which have consistently fallen below the Bank-wide average over the evaluation period. An IDEV However, there is limited evidence of agricultural Economic Rate of Return for the Bank's projects diversification away from the production of maize. was not rated due to unavailability of adequate data The Indaba Agricultural Policy Research Institute (available for only seven projects). reports that production of maize among smallholder farmers remained relatively stable between 2008 and 2012 at 60.6 percent and 61 percent of cultivated Timeliness land respectively.74 Values from the Simpson Diversity Index over this period confirm these data with Zambia The average project implementation ratio for assessed at 0.42 in 2004 and 0.4 in 2012, suggesting the Bank's completed projects stands at 1.68, limited progress over the period.75 suggesting an eight month delay for every planned year of project implementation. Across the portfolio, The DPs reported that promoting agricultural implementation delays have been caused by four key diversification was stymied by the Farmer Input challenges: (a) inadequate project design; (b) delays Support Program (FISP), a national program which in achieving loan effectiveness; (c) procurement provides subsidized inputs of fertilizer and maize delays; and (d) complexities associated with co- seeds to smallholder farmers with crops subsequently financing. 46 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Table 8: Relevance rating

Criteria Rating Timeliness of Project Implementation Unsatisfactory Financial and Economic Performance Moderately Unsatisfactory Overall Rating for Relevance Unsatisfactory

Inadequate Project Design time from loan effectiveness to first disbursement was 175 days (five months). Overall, this timeframe Inadequate project design has been particularly exceeds standards set in the Bank's Operations problematic in the agricultural and transport Manual, which identifies a timeframe of 14 months sector. Project design deficiencies have resulted between approval and first disbursement. However, in underestimates of project cost and required the 2015 CSP Completion Report (CSPCR) suggests implementation time as well as time spent on that delays between project approval and first "re-engineering." The SIP was designed without disbursement have improved for projects approved detailed feasibility studies. As such, the project was over the 2011-2015 strategy period with delays considerably underfunded. Original cost estimates falling from 16 months in 2011 to 12 months in has identified implementation costs of USD 4,000/ha 2014.78 The 2013 Development Effectiveness but the actual cost was USD 21,000/ha.77 Initial funds Review for Zambia confirmed that time between were sufficient to implement just one of six planned approval and first disbursement had fallen to 12 irrigation schemes. The project was eventually months. This timeframe is in line with the average implemented over ten years with an initial extension across the ADF countries but falls short of the target of Bank funds to 2009 as well as additional trust of 11 months identified in the report.79 Two sectors of funds. Board approval of agricultural projects should particular concern are the agriculture sector and the be preceded by detailed feasibility and design studies private sector. In the case of the agriculture sector, if project implementation delays are to be avoided. PRODAP did not reach effectiveness until a full 4.4 In the case of the Nacala Corridor Road Project, the years subsequent to approval. Among LOC Projects, original project design had considered construction average time between project appraisal and loan with limited diversions, resulting in both delays and signing was nearly 20 months, and 25 months additional costs as the project had to be re-engineered between appraisal and first disbursement. For the to include necessary diversion works. At the time of LOC to ZANACO, it took 20 months from the time of the evaluation, just 50 percent of project funds had appraisal to loan signature and 26 more months for been disbursed, whereas 95 percent of the original disbursement. project timeframe had elapsed. These delays affected the achievement of project Loan Effectiveness and Disbursement objectives. For example, the financial position of CETZAM deteriorated considerably between the Delays in achieving loan effectiveness and first time of appraisal in 2012 and the time of loan disbursement were noted across the portfolio. The signature in September 2014. The deterioration was average delay between project approval and loan not monitored over this period based on the Bank's effectiveness over the evaluation period was found practice of supervision only after disbursement. Had to be 415 days (13 months), whereas the average the Bank been aware of this deterioration, it may Evaluation Findings 47

have been possible to mitigate the risk. Despite the Through the goodwill demonstrated by ZESCO and fact that CETZAM was already in default with the TATA Construction, works were expedited, limiting Development Bank of Zambia, Bank staff indicated the overall project delay to just five months. However, that financial records were not sufficiently scrutinized, these delays, partly attributable to the Bank, have and CETZAM was cleared for first disbursement. come at a cost to the project beneficiaries. Expedited The Bank became aware of the extent of CETZAM's works have resulted in additional costs of over USD difficulties only through feedback from the firm hired 7 million in variation orders as well as USD 1 million to provide TA. In the case of Investrust, disbursement in interest for bridging funds. delays for TA resulted in the delay in improving credit assessment systems which meant that the majority Similar issues were evident in the implementation of the LOCs had already been disbursed. As such, of the Kazungula Bridge project, which highlighted it is unlikely that sub-projects had been assessed potential challenges of working with bilateral using improved systems. partners. As an exception, the Bank chose to adopt JICA's procurement rules and differences arose Complexities of Co-financed Projects between the parties with respect to the appropriate technical requirements for the bid. JICA disputed the Closely related to the issue of delayed loan award of the contract and withdrew their support effectiveness and disbursement is the issue of for the bridgeworks. The resulting delay has been harmonizing practices with other donors for co- significant, with less than one percent of funds financed projects. This issue was of particular disbursed 39 months after project approval. concern for two of the Bank's projects: (i) the Itezhi- Tezhi Power Generation and Transmission Project; Procurement Delays and (ii) the Kazungula Bridge Project. Procurement delays were noted for multiple projects Itezhi-Tezhi involves innovative financial design in across each sector. These delays have resulted from: which the AfDB cooperates with ZESCO and six other (i) weak procurement capacity within line ministries; donors to create a special purpose vehicle for power and (ii) heavy internal government approval Country Strategy Evaluation generation. The project involved public and private processes. sector loans from the ADF and ADB windows and the Nigeria Trust Fund. The difficulties experienced Procurement capacity within line ministries is An IDEV in this case arose partly from the incompatibility weak owing to lack of professionalization of the between the Bank's public and private sector procurement function, high staff turnover and an project approval processes. Since the Itezhi-Tezhi unfamiliarity with the Bank requirements. Within project involved both private and public sector loans, sector ministries staff are sent for procurement effectiveness of the public sector loan was delayed training at the Institute of Purchasing and Supply. until reconciliation of terms could be completed for However, this training is better suited to private sector the private sector loan, which occurs after approval. procurement. Although ZMFO has been proactive in Project stakeholders reported that an unwillingness providing workshops for GRZ counterparts on the of all parties to compromise on their terms and Bank's procurement system, these efforts are limited conditions for the private sector loan resulted in by high staff turnover. Project delays subsequently a 29-month delay for loan effectiveness and a result from improperly prepared documents, which 36-month delay to first disbursement. must be returned for revision. A second source 48 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

of delay is the requirement that all contracts be the 2007-2010 JASZ and 93 percent for the 2011- approved by the Office of the Attorney General (OAG). 2015 CSP. As of 2008, the annual disbursement This requirement, along with the resource constraints ratios for Zambia has fallen slightly below the bank- within the OAG, were noted to have delayed project wide average albeit there has been some recent procurement by a matter of months. improvement (See Figure 9 below).

With respect to the economic return, ex-post Financial and Economic Performance Economic Internal Rate of Return (EIRR) figures were available for only seven projects across the Financial and economic performance of the portfolio portfolio. As per the calculations available in PCRs, was assessed in terms of: (i) the disbursement ratio on average, the ratio between ex-post and ex-ante over the evaluation period relative to the average EIRR was 0.96, indicating that projects came close disbursement ratio across all Bank projects; and to meeting their expected rates of return. However, (ii) Economic Rates of Return at completion relative specific outliers can be noted, including the PRODAP to appraisal. The overall disbursement ratio has Project, for which the ratio fell at just 0.06 percent improved over the evaluation period, from 83.06 and the NRWSSP, for which the EIRR far exceeded percent for the 2002-2004 CSP to 96 percent for expectations at appraisal with a ratio of 1.57.

Figure 9: Disbursement Ratios – Zambia and AfDB (2008-2014)

2008 2009 2010 2011 2012 2013 2014

Dn n Dn

Source: World Development Indicators Evaluation Findings 49

Sustainability noted that this shutdown reflects the continued sensitivity of the mine to changes in the operating The sustainability of the Bank's interventions was context. assessed in terms of the extent to which risks to the sustainability of project outcomes were addressed in Medium-term profitability of FIs targeted through project design and implementation, as well as the LOC projects was threatened by regulatory changes observed sustainability of outcomes. Sustainability imposed by the Bank of Zambia. The project design was found to be variable across sectors, but for the three LOCs did not assess the sensitivity of moderately unsatisfactory overall, suggesting that operating profit margins to such regulatory changes. the sustainability of the Bank's operational outcomes For example, CETZAM experienced a marked decline in Zambia is not assured. in profitability subsequent to the Bank of Zambia's

Table 9: Sustainability rating

Sector Sustainability Rating Private Sector Moderately Unsatisfactory Power Sector Moderately Unsatisfactory Agriculture Sector Moderately Unsatisfactory Multi-Sector Unsatisfactory Social Sector Moderately Unsatisfactory WSS Sector Moderately Satisfactory Transport Sector Moderately Satisfactory Overall Rating Moderately Unsatisfactory Country Strategy Evaluation

Private Sector. The sustainability of private sector introduction of an interest rate and fee cap for An IDEV projects has been compromised by regulatory microfinance institutions. changes, as well as variable profitability among the targeted institutions, but it was found to be CETZAM previously charged an annual interest rate moderately unsatisfactory overall. of 104 percent. With the cap placed at 42 percent, CETZAM could no longer retain sufficient income to In 2012, the Lumwana Mine incurred USD 3.8 billion sustain its business model. In addition, the quality in impairment charges, but returned to modest of CETZAM's loan portfolio deteriorated, with Non- profitability in 2013 as a result of cost-cutting Performing Loans (NPLs) reaching 49 percent of measures, earning USD 87 million.80 The mine then loans. An effort to restructure CETZAM failed and by temporarily suspended operations in December 2014 the end of 2014, CETZAM reported a Return on Assets as a result of the GRZ's decision to raise royalty fees of (-28 percent), Return on Equity of (-433 percent) to 20 percent. It was stated that this would make the and a Cost to Income Ratio of 376 percent.81 CETZAM mine no longer profitable. Stakeholders at Barrick has been in default with the Bank since July 31, 2015. 50 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

ZANACO and Investrust faced similar challenges maintenance. The African Management Services when the Bank of Zambia decided to increase Company has been hired to provide organizational statutory reserve requirements to 18 percent.82 capacity development to further ensure institutional ZANACO has remained profitable with NPLs below sustainability. Similarly, as part of the CWMIP, all eight percent, absorbing the increase by liquidating farmers clubs were trained in group management, a portion of its bond portfolio and incurring a slight crop management, record keeping, water decrease in profits. Investrust, however, has faced management and loan management. The project difficulties. Since disbursement, Investrust's financial also facilitated the registration of participating position gradually deteriorated, with NPLs reaching farmers clubs as legal entities, expanding the range 40 percent in 2013. During 2009-2012, Investrust's of business transactions these clubs can participate operating income grew at 84 percent, but operating in to grow their businesses. expenses more than doubled as a result of an aggressive expansion strategy. In this context, the In the case of the SIP, ownership has been promoted raised capital requirement added pressure to an through consultation with beneficiary farmers already difficult operating context. Furthermore, the throughout project design and implementation. project XSR notes that the Bank failed to identify For example, the beneficiaries were involved in weaknesses in Investrust's credit underwriting selecting the sites for new irrigation schemes. processes, which could have been addressed However, ownership of the schemes is threatened through TA. Although the LOC facility has already by the uneven distribution of revenues inherent been repaid to the Bank, reported losses in 2013 in the irrigation scheme management structure. and 2014 call into question whether Investrust's Furthermore, potential water issues resulting SME financing activities will be sustainable. from climate change have not been satisfactorily addressed for SIP. Two schemes were found to be Agriculture. With respect to agriculture sector facing operational challenges due to low water levels projects, the primary risks to sustainability stem in Lake Kariba and, as a result, one of the schemes from: (i) institutional sustainability; (ii) ownership has gone through periods of non-functionality. by the beneficiaries; and (iii) exogenous shocks. Overall, sustainability was found to be moderately Power Sector. The primary sustainability concern unsatisfactory. for the Itezhi-Tezhi power project has been the financial sustainability issues given that Zambia's The sustainability of the PRODAP project, energy tariffs continue to fall far below cost recovery notwithstanding poor performance with respect to levels. Although the operation of the Itezhi-Tezhi outcomes, was limited by a failure at the outset of Power Plant is covered by a Power Purchasing the project to: (i) assess the capacity of stakeholders Agreement (PPA) with ZESCO and supported by a in procurement, financial management and project guarantee from the GRZ, the lack of cost-reflective management; (ii) determine the availability and tariffs pose a serious risk to ZESCO's financial capacity of local bidders and contractors; and sustainability. (iii) ensure buy-in through engagement with local suppliers. The Energy Regulation Board (ERB) notes that current PPAs range from USD seven cents/kWh For SIP, the Ministry of Agriculture and Livestock has to 13.23 cents/kWh whereas the average tariff is promoted institutional sustainability by establishing USD six cents/kWh.83 These costs do not take into companies responsible for all aspects of growing account the ongoing maintenance and investment and marketing of crops as well as operation and in the transmission network, nor do they address Evaluation Findings 51

system losses, theft and unpaid tariffs. Zambia's program. However, little was done to address the electricity tariffs fall far below those of other technical capacity gaps in line ministries responsible countries in the region (see Table 10 below). for the implementation of reforms.

Political will to move toward cost-reflective tariffs Some donors suggested that, given Zambia's MIC is lacking. In February 2016, the GRZ reversed a status, continued high poverty levels are a reflection previous tariff increase to an average of USD 10.35 of poor ownership rather than insufficient resources. cents/kWh.84 As part of this agreement, the lifeline In the implementation of PRBS, ownership was found tariff would have been extended from 100 kWh to to be lacking in three areas: (i) implementation of 300 kWh, while other commercial and residential IFMIS, ongoing since 2004; (ii) budget execution consumers would pay higher fees. Although the reforms; and (iii) decentralization.85 All three items Bank is currently funding a Cost of Service Study featured in a High Level Dialogue in 2009 through to support ZESCO in proposing a tariff increase, its which the PRBS group raised concerns about ongoing potential impact will be subject to changes in the delays. More recently some progress has been made political environment. in implementing IFMIS and the TSA, but development partners note that continued irregularities and slow Although the PPA is supported by a guarantee from progress raised doubts as to whether the underlying the GRZ, the current macroeconomic context calls changes are substantive or merely procedural. into question whether such agreements could be honored across multiple investments. In terms of Donors also expressed concern over variable levels constraints to the development of the sector, current of ownership across the Sector Working Groups. tariff levels discourage the conclusion of new PPAs Although ownership of the PRBS agenda was strong with private power producers and limit the viability of within MoFNP, it was somewhat weak among the projects for other clean sources of energy, including line ministries, some of which regarded the PRBS solar. program and the Sector Working Groups as requiring that they cede autonomy to MoFNP.86

Multi-Sector. The poor sustainability of outcomes Country Strategy Evaluation from the Bank's PRBS program is attributed to In the latter years of the Program, the GRZ gained institutional capacity risks and insufficient ownership. access to the Eurobond market on favorable These risks were exacerbated by an overestimation terms. These funds could be obtained quickly and An IDEV of the ability of MoFNP to influence the activities of were subject to fewer conditions. Access to the other ministries. Eurobond market was identified by other donors as an additional factor underpinning insufficient Weaknesses in technical capacity were identified as ownership of budget support targets. However, risks to project implementation for each of the PRBS recent loans have been more expensive,87 placing projects. The risk was deemed mitigated through additional strain on the economy. In 2014, the PRBS training provided to the MoFNP on various elements Group eventually disbanded due to concerns that of budget planning and execution under the PEMFA ownership and macroeconomic management were

Table 10: Regional Tariff Levels

Tariffs Zambia Tanzania Swaziland Zimbabwe US cents/kWh 6.02 16.8 10.9 9.8 Lifeline kWh/ month 0-100 0-50 n/a 0-50

Source: Zambia Energy Regulation Board 52 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

insufficient to justify budget support. Furthermore, Transport Sector. Relevant risks to sustainability of some donors doubted the appropriateness of budget the Bank's transport sector projects include financial support given Zambia's MIC status. sustainability and institutional capacity. Institutional risks have resulted from recent management Social Sector. Although progress achieved at the challenges identified at the Roads Development outcome level under the fourth PRBS has been Agency, for which a 2008 OAG Report identified over- sustained, the mitigation of risks to sustainability procurement and contract management irregularities, at the project level was deemed moderately specifically with regard to high unit prices paid to unsatisfactory. First, as noted above, line ministries contractors.89 The report resulted in a forensic audit including the Ministries of Health, Education and Local and dissolution of the RDA's Board in 2011while the Government did not benefit from the TA provided to Nacala Corridor Project was ongoing. The project strengthen budget execution, project management addressed institutional capacity risks by providing and procurement. Political and governance-related TA for procurement, management of civil works and risks identified during project appraisal were limited collection of baseline data. Independent audit and to the potential for a change in government in 2011. technical firms were appointed to oversee project The project failed to address the misuse of funds implementation. For the Kazungula Bridge Project, identified in the 2009 OAG Annual Report with these risks will be addressed through the creation of procurement irregularities constituting the most the Kazungula Bridge Authority, a separate agency salient risk.88 Ongoing initiatives were underway to which will be established after project implementation strengthen the Anti-Corruption Commission, but no to own, operate and maintain the bridge. actions were taken to mitigate this risk within the Ministry of Health itself. Financial sustainability and maintenance of the Nacala corridor was addressed through EU-funded design Water Supply and Sanitation. The sustainability studies which were used to identify the most cost- of outcomes for WSS projects has benefitted from effective implementation option. The selection of an the selection of simplified and uniform technical asphalt concrete paved carriageway is estimated to solutions to reduce the cost and complexity of have reduced maintenance costs by two-thirds over maintenance as well as the establishment of other alternatives. In addition, the GRZ has adopted commercial utilities and community maintenance a Road Maintenance and Management Strategy committees to ensure continued operations. (2014-2024) which provides a methodology for road However, WSS projects have struggled to ensure maintenance planning and encourages the use of financial sustainability of operations and reduce Output and Performance Based Contracting. Funds for unaccounted for water. In the case of the Nkana maintenance of the road are to be ring-fenced under WSS project, non-revenue water stood at 60 percent the National Road Fund Agency. due to leakages, faulty billing and illegal activities. The 8 Centers project faced similar challenges in ensuring adequate collection of revenues and Crosscutting Themes cost-recovery for water services. In the case of the NRWSSP, lack of consideration for the ability Coverage of crosscutting themes, including gender, and willingness of project beneficiaries to pay for inclusive growth and green growth has been services has resulted in the failure to establish a moderately unsatisfactory over the evaluation local utility for operations and maintenance. period. Evaluation Findings 53

Table 11: Crosscutting Issue Rating

Criteria Rating Coverage of Gender within CSPs Moderately Unsatisfactory Gender mainstreaming across the portfolio Moderately Unsatisfactory Inclusive and Green Growth within CSPs Moderately Unsatisfactory Inclusive and Green Growth across the portfolio Moderately Satisfactory Overall Rating for Crosscutting Themes Moderately Unsatisfactory

Coverage of Gender within the Bank's Gender Mainstreaming across the Project Strategies. Gender has received limited coverage Portfolio. With respect to the mainstreaming of across the CSP periods and has been moderately gender into the Bank's portfolio of projects, gender unsatisfactory with uneven coverage of gender- has been mainstreamed into project design for specific development constraints and few targeted the majority of projects by identifying employment interventions identified. The 2002-2004 CSP and and income generating opportunities for women. the Bank’ Multi-sector Country Gender Profile for However, in some cases, efforts to promote income- Zambia (2006) identified specific gender-related generating activities for women were limited by issues within the development context, including project design omissions, whereas other projects increased poverty among female-headed missed opportunities in this regard. Overall, households and lack of opportunities in education, mainstreaming of gender into project design is rated asset ownership and economic activities. Initiatives as moderately unsatisfactory. to address these issues were to be incorporated into the Bank's projects through complementary LOC projects identified female business owners grant funds. However, coverage of gender within as a key beneficiary group. It was expected that the Bank's CSPs decreased after this period. projects would increase lending to women-owned Country Strategy Evaluation No specific interventions pertaining to gender businesses. However, the project design did not were identified under the 2007-2010 JASZ. allow for the specific targeting of women in that Discussion of gender constraints under the 2011- each loan was subject to the specific due diligence An IDEV 2015 CSP has been limited to a lack of available requirements of the financial institutions. Through resources for implementing the National Gender the provision of TA, however, one financial institution Policy. However, some specific gender-related developed a credit product which specifically targets interventions were identified, including building female traders. GRZ capacity to collect sex-disaggregated data, providing support for gender-responsive budget Integration of gender into the Bank's agriculture and conducting gender audits of key sectors projects has been weak. For example, women are in which the Bank is active (for example the noticeably absent in decision-making positions proposed gender audit of the transport sector and among irrigation committees established under the inventory of women entrepreneurs). Significantly, SIP. Furthermore, for the CWMIP, treatment of gender none of the gender-specific knowledge work was was limited to an initiative to collect disaggregated eventually implemented. data, which was ultimately unsuccessful. Integration 54 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

of gender was more successful in the Water Supply addressed in terms of industrial pollution in the and Sanitation sector, for which the Nkana and Copperbelt region and environmental degradation 8 Centers WSS projects promoted employment caused by heavy reliance on farming in rural areas opportunities for women through income-generating but no specific interventions were identified in this activities, such as management of water points. regard.

The integration of gender into industrial and Coverage of inclusive and sustainable growth is less infrastructure projects was uneven. The Lumwana satisfactory in the 2007-2010 JASZ and 2011-2015 Copper Mine created employment opportunities CSP. Both strategies promote poverty reduction for women through: (i) the contracting of women's through the development of economic infrastructure, groups for specific services; (ii) implementation but the connection to reducing poverty in rural areas of income-generating activities; and (iii) direct is not explicit. The 2011-2015 CSP identifies the hiring and training of women for industrial jobs Bank's role cooperating with partners to implement (for example driving trucks). Similarly, initiatives the Zambia Chapter of the Global Pilot Project for targeting the capacity development of female Climate Change resilience and recognizes the contractors and business operators have been increased pressure that climate change is placing integrated into the design of the Kazungula on rural agricultural activities. However, no specific Bridge, Nacala Corridor and Chinsali-Nakonde interventions are identified in this regard. Road projects. However, no such initiatives were considered in the case of the Itezhi-Tezhi power Inclusive and Green Growth across the Project generation and transmission project. The experience Portfolio. The themes of inclusive and green growth of the Lumwana Copper Mine project suggests that have been integrated across the portfolio through more can be done to promote direct employment the promotion of socially and environmentally of women for semi-skilled jobs in the context of responsible investment and a reduction of disparities infrastructure and industrial projects. between urban and rural areas. Overall, integration of inclusive and green growth within the project Inclusive and Green Growth within the Bank's portfolio has been moderately satisfactory. CSPs. Coverage of inclusive and growth and environmental sustainability is most explicit under the Promotion of socially responsible investment 2002-2004 CSP but decreased across subsequent was achieved through: (i) implementation of CSPs over the evaluation period. Overall, coverage Environmental and Social Management Plans for of inclusive and green growth within the Bank's category 1 and 2 projects; and (ii) increasing the strategies has been moderately unsatisfactory. capacity of FIs to address environmental and social management issues in their portfolio. All Category The 2002-2004 CSP explicitly addresses the issue 1 and 2 projects in the power, transport, private, of high levels of rural poverty, noting that a lack of and WSS sectors are subject to ESMPs, for which investment in rural areas has left rural populations implementation has been satisfactory. Beneficiaries detached from the direct gains of growth and lacking have also made additional efforts to improve their access to inputs, services and infrastructure. These environmental performance. For example, the challenges were to be addressed through the Lumwana Mine has successfully reduced its water Bank's agriculture and WSS interventions, as well usage such that, in 2013, it was the best performer as policy based operations targeting decentralization among Barrick mines in terms of water used per ton of governance. Environmental concerns were of ore produced.90 LOC projects, although deemed as Evaluation Findings 55

Category 3, were complemented by TA to strengthen have performed poorly in terms of managing the content and implementation of the targeted FIs' environmental risks. As noted previously, the SIP Environment and Social Management policies. did not adequately address impacts related to climate change such that two outgrower schemes Other measures have been taken by private sector are now facing challenges due to reduced water partners to promote social sustainability of projects. levels in Lake Kariba. Furthermore, the CWMIP is Both ITPC and Barrick have established trust funds likely to cause environmental damage. Farmers in to support the development implementation of local the Chingola, Mkushi and Kapiri Mposhi regions are development plans in cooperation with surrounding gardening along dambos (a type of marshland) and chiefdoms and build the capacity of local perennial rivers, causing the dambos to dry up due governments. For example, the Lumwana Mine and to increased water extraction. ZESCO promoted local employment opportunities by working with chiefdoms to establish lists of eligible workers for temporary and permanent employment. Quality at Entry As a result, Barrick estimates that between 30-40 percent of its employees at the mine come from the Quality at entry of the Bank's CSPs over the evaluation local community. period was found to be moderately satisfactory. However, quality at entry for project design was Furthermore, nearly all of the Bank's projects in the found to be moderately unsatisfactory due to WSS sector have sought to reduce disparities in weaknesses in the clarity of project intervention logic service delivery among urban and rural communities by as well as the realism of project design. targeting areas where access to water and sanitation had previously been very low. The Bank's PRBS projects in the multi- and social sectors have sought to further Quality at Entry of CSPs reduce regional disparities through decentralization of government and improved delivery of health and social At the Strategy level, the quality at entry of the services in underperforming districts. Bank's CSPs for Zambia was assessed in terms Country Strategy Evaluation of: (i) understanding of the evolving development However, multi-sector projects have missed context; (ii) clarity and realism of the intervention opportunities to promote green growth. Environmental logic; (iii) selectivity and coherence of the project An IDEV sustainability was part of the PRBS Program under the portfolio; and (iv) positioning and comparative 2010 PAF for which the approval and submission of an advantage. Environmental Mainstreaming Strategy and Action Plan, Climate Change Response Strategy and Environmental All CSPs over the evaluation period are rooted Management Bill were identified as targets. This in a robust analysis of the political context, element of the PAF, however, was not identified among macroeconomic context, dimensions of poverty, the Bank's project objectives. Furthermore, some national development strategies and constraints to agricultural projects have inadvertently contributed to growth. Understanding of the country context has environmental degradation. been underpinned by the use of consultation to inform CSP design. The design of 2002-2004 CSP was not Finally, although agricultural projects have been consultative, relying instead on its alignment with successful in terms of addressing inclusive the PRSP and an opportunity provided for members growth within the project design, these projects of government, civil society and DPs to provide 56 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

feedback subsequent to drafting of the strategy. By the 2011-2015 CSP presents a credible results contrast, development of the JASZ was rooted in framework in which specific projects are linked to a harmonized division of labor among the DPs, in strategy outcomes through measurable outputs, consultation with GRZ, civil society and the private outcomes and performance indicators. However, sector. Development of the 2011-2015 CSP adopted an independent review of the quality at entry of the a similar consultative approach but consultations CSP found that the results Logframe continued to were expanded to include emerging donors such be impractical due to its scope and the fact that as Saudi Arabia, China, Brazil and India. It should be actual implementation of the framework would pointed out that the 2011-2015 CSP was finalized require onerous amounts of time and resources. The prior to the establishment of a new division of labor strategic selectivity and coherence of the Bank's under the JASZ-II. Under the new division of labor, portfolio has improved over time. The 2002-2004 finalized in 2012, the Bank was retained as "lead" portfolio identified interventions across five different partners for Agriculture and WSS, notably at odds sectors. The 2007–2010 JASZ again identified five with the priorities that had been formulated under different priority sectors under two different pillars: the CSP.91 (i) infrastructure development; and (ii) the promotion of good governance. In contrast, the 2011–2015 The clarity and realism of the intervention logic CSP narrows the Bank's strategic focus to just for the Bank's CSPs remained relatively weak until three priority sectors under two thematic pillars, the 2011-2015 CSP. The 2002-2004 CSP did not that is: (i) Supporting Economic Diversification; and identify a results matrix but instead provided a (ii) Supporting Economic and Financial Governance. policy matrix which linked projects to sector-level Although the CSP has become more selective in policy objectives without identifying project outputs, thematic terms, the number of sectors covered outcomes or performance indicators. Similarly, the under each portfolio has increased over time with Bank did not develop a separate results framework interventions approved in just four sectors between for its interventions under the JASZ based on the 2004 and 2006, five sectors between 2007 and intention to develop a joint monitoring framework 2010, and seven sectors between 2011 and 2015 with the GRZ which was never, in fact, delivered. (see Table 12 below). Despite implementing By contrast, though certain challenges remain, activities in a broader range of sectors, the

Table 12: Operational selectivity in Zambia CSPs

2002-2006 2007-2010 2011-2015 CSP Priority Sectors CSP Priority Sectors CSP Priority Sectors (WSS, Agriculture, Social, Multi-Sector, (WSS, Agriculture, Transport, Energy, (Transport, Energy, Multi-Sector) Private Sector) Multi-Sector) Sector # Project percent Sector # Project percent Sector # Project percent Funds Funds Funds WSS 2 40.44 Transport 1 42.37 Energy 2 25.73 Industry 1 33.27 Multi-Sector 2 28.59 Agriculture 4 22.49 Multi-Sector 1 22.22 WSS 1 21.38 Transport 1 21.44 Agriculture 2 4.62 Finance 4 6.26 Social 2 15.65 Finance 0 n/a Agriculture 3 0.01 Environment 2 11.32 Transport 0 n/a Industry 0 n/a WSS 2 1.50 Social 0 n/a Social 0 n/a Finance 1 0.45 Energy 0 n/a Energy 0 n/a Multi-Sector 0 n/a Environment 0 n/a Environment 0 n/a Industry 0 n/a

Source: SAP Evaluation Findings 57

Bank's strategy has become more coherent through the LOC were assessed according to their since projects across a range of sectors now regular due diligence processes. Otherwise, the support a more limited number of strategic FIs may not generate sufficient profit or would be outcomes. For example, under the 2011-2015 exposed to undue risk. Accordingly, there were no CSP, interventions in the finance, energy, transport, means of ensuring that specific underserved groups social and multi-sectors complement each other would benefit from the funds instead of the FIs' in removing barriers to private sector growth. The existing clientele. advantage of this approach is that it allows the Bank to address multiple facets of each targeted outcome. FIs targeted under the LOC projects also questioned why the funds were not provided on a revolving However, as indicated by an independent review of basis given the targeted number of businesses to quality at entry for the 2011-2015 CSP, such an be reached. Revolving funds would have allowed approach risks dispersing resources too thinly among the FIs to reach a larger pool of SMEs, especially multiple sectors, thereby limiting the achievement of considering the long tenor of the LOCs (10 years results across the sector. This risk is most apparent in the case of ZANACO), against the relatively short with the Bank's LOC projects, which have reached tenor of the loans provided to SMEs (on average, less a relatively small number of businesses. In contrast, than two years). the SSTEP is expected to have a broader impact, reaching 4,000 youths. The intervention logic for the Bank's projects under the PRBS program was limited by confusion among outputs, targets, triggers and outcomes. Quality and Realism of Project Design As such, it was not always possible to determine how GRZ activities addressed the PAF targets or to Overall, the quality and realism of project design was identify lessons learned. Furthermore, in an effort found to be moderately unsatisfactory, with issues to be selective, the Bank often limited its focus to identified across all sectors. In particular, problems specific areas of the PAF. However, disbursements were identified with regard to: (i) realism of the were triggered by performance against the PAF as Country Strategy Evaluation intervention logic; (ii) quality and realism of project a whole, calling into question whether donors truly design. Weaknesses identified with regard to the pooled resources to achieve a limited number of realism of the project intervention logic resulted shared objectives. An IDEV from weak realism of the intended outcomes, given the scope and design of projects and lack of clarity Issues with respect to the realism of project in the intervention logic due to confusion between design arose from the quality of feasibility studies outputs and outcomes. underpinning the project designs, resulting in an underestimation of project costs. In the case of In the case of LOC Projects, some targets, such as infrastructure projects, design challenges arose due "reduced unemployment among youths 15-24" and to the quality of engineering works. "one percent GDP growth in targeted countries," were unrealistic given the size and scope of the Quality and use of Feasibility Studies. The projects (together, the three LOCs accounted for just majority of projects in the agriculture sector were not USD 15 million in non-revolving funds). Furthermore, supported by feasibility studies to assess cost and no credible project mechanisms were identified implementation arrangements. In the case of the SIP, to reduce the cost of finance among subprojects. the funds provided were sufficient to fully implement Beneficiary FIs confirmed that subprojects supported only one of the six planned outgrower schemes. In the 58 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

case of PRODAP, the project design and appraisal did or-pay PPA and the use of Engineering, Procurement not clearly identify specific locations for investments and Construction (EPC) Contracts. However, one and did not consider the high dispersal of coastal issue noted in the design of the project is the decision communities. With respect to implementation to erect a 220 KV transmission line from Itezhi- arrangements, no consideration was given to the Tezhi to Mumbwa, necessitating the installation of availability and capacity of local suppliers and transformers at the Mumbwa substation, thereby contractors, which frustrated project implementation. increasing the project cost and complexity. Given that additional investment is expected in the Western In contrast, the design of WSS projects was Region, a 330 KV line would have facilitated future informed from lessons learned identified through expansion. previous interventions, including the adoption of demand-driven approaches, an assessment of The Ministry of Energy expressed dissatisfaction financial sustainability for maintenance, sensitization with the progress achieved in the Itezhi-Tezhi power of communities and simplicity and uniformity in the project to date owing to implementation delays selection of equipment. Feasibility studies were used relative to the complexity of the project. Given that to identify water demand, stakeholders' ability to the required infrastructure was already in place pay and the collection of baseline data. However, and owned by ZESCO, it was questioned why the cost of improvements to sanitation infrastructure Itezhi-Tezhi was implemented as a PPP instead of was underestimated, resulting in a low uptake of a more technically complex project. Itezhi-Tezhi improved sanitation technology among beneficiaries was regarded as "low-hanging fruit" within the and diminishing performance for these components. GRZ's Power Sector Development Master Plan. GRZ Furthermore, the RWSSP and Nkana WSS projects stakeholders felt that Itezhi-Tezhi could have been did not fully consider the ability or willingness of implemented more efficiently as a public sector communities to pay for water services, as well as project, diverting private resources to a project for operations and maintenance fees, resulting in which a PPP could yield greater efficiency. Although increases in unaccounted for water in the case of MoFNP has established a PPP division, it was noted Nkana and lack of a sustainable operations and that its staff lacked the sector expertise necessary to maintenance structure in the case of the RWSSP. identify projects for which a PPP modality can bring added value. Engineering Works and Project Modalities. The Bank's projects in the transport sector have been supported by detailed studies which identify Supervision cost-effective solutions to regional trade issues. Furthermore, projects in the transport sector have The frequency of supervision has increased over the incorporated lessons learned from previous initiatives evaluation period. in other countries, including the importance of integrating TA and community sensitization into A portfolio review indicated that, between 2002 the project design. However, initial engineering and 2004, projects were supervised, on average, and design work completed for the Nacala Corridor once every two years. However, the 2015 CSPCR Road project was insufficient, resulting in delays as indicates that, between 2011 and 2014, the number additional engineering work was undertaken. of projects supervised twice annually grew from five to eight projects out of an ongoing portfolio of The design and implementation of the Itezhi-Tezhi 13. Over that period, the percentage of supervision power project was similarly supported by detailed missions conducted by staff at ZMFO increased from feasibility studies. Other initiatives undertaken to 67 percent to 75 percent. Increased supervision has control a range of risks include negotiation of a take- also contributed to an increase in quarterly reports, Evaluation Findings 59

which were found to be available for 50 percent of CSPs as a means of maximizing the relatively the ongoing projects in 2011, and 85 percent of small quantum of ADF resources available. ongoing projects in 2013. The feedback from the government on the Bank’s supervisions shows that A portfolio review indicated that approximately quality of interaction with the Bank has improved 55 percent of projects approved throughout the over the evaluation period, particularly after the evaluation period have included some degree establishment of the Country Office. of co-financing from partners. Furthermore, the 2015 CSPCR notes that, over the strategy period, There are instances where supervisions have been the Bank managed to secure co-financing of 220 effective in improving the quality of the portfolio by percent of the original ADF allocation. taking steps to discontinue ageing and problematic projects (for example PRODAP) by restructuring With respect to the leveraging of funds, the the projects, limiting the components to suit the Bank has served as the lead arranger for three funds available and identifying alternative sources projects: (i) the Itezhi-Tezhi Power Generation of funding to complete all components as with the and Transmission Project; (ii) The Nacala Corridor original plan (for example, Small Scale Irrigation Road Project; and (iii) the Kazungula Bridge. projects). Through these projects, the Bank was able to leverage its own contribution by factors of 16, 3.68 and 1.82, respectively. The Bank has also Leveraging and Co-financing secured co-financing from emerging donors, including India Exim Bank, the Development Throughout the evaluation period, leveraging and Bank of South Africa and the OPEC Fund for co-financing have been identified in the Bank's International Development. Country Strategy Evaluation An IDEV

Conclusions and Recommendations 61

Conclusions and Recommendations

Conclusions limited by project design weaknesses and delayed implementation. With the exception of The Bank’s Country Strategies and Programs the transport and agriculture sectors, the delivery have been well-aligned with both national of outputs has been satisfactory. Transport sector development plans and the Bank's comparative projects have faced considerable delays but advantage. The Bank's CSP priorities have project outputs are likely to be achieved. The reflected contemporary national development achievement of project outcomes, however, has plans, including the FNDP, SNDP and Vision 2030. been less satisfactory, reflecting the weaknesses in The Bank's CSPs have also responded to changes project design, including (i) inadequate targeting of in national development priorities over time. beneficiary needs; (ii) lack of realism in intervention Removal of constraints to growth through economic logic; and (iii) weaknesses in project assumptions. infrastructure development and strengthening of economic governance reflects the objectives of both LOC projects were unable to influence the due the SNDP and Vision 2030, but also align with the diligence requirements and lending practices of Bank's comparative advantage in infrastructure FIs and did not address constraints arising from development and policy-based operations. the low productivity of Zambian SMEs. Agriculture projects faced challenges in implementation as The Bank's portfolio has become more project design was not supported by detailed coherent, adopting an integrated approach to feasibility studies, including credible project costs development challenges. Although interventions and concrete implementation arrangements. On the Country Strategy Evaluation have been approved in a greater range of sectors other hand, policy-based operations failed to address across each CSP period, the realism of the strategy poor ownership of reforms and capacity constraints logic has improved due to greater coherence of among line ministries. An IDEV the portfolio. Projects across different sectors now address different facets of a limited number Implementation delays have also affected the of strategy objectives. Development of economic achievement of outcomes. The timeliness of project infrastructure is now being addressed in terms of implementation was found to be unsatisfactory regional transport and energy infrastructure, trade across all sectors. Whereas progress has already facilitation and skills development. Strengthening of been made in addressing delays to loan effectiveness economic governance is being addressed through and first disbursement, the ongoing portfolio has complementary initiatives in the multi-sector been experiencing challenges arising from multiparty and financial sector to enhance the regulatory co-financing arrangements. In particular, projects in environment and increase access to finance. the power and transport sectors are delayed due to the need to harmonies terms, conditions and The Bank has largely delivered planned outputs, procurement arrangements among multilateral, but the achievement of outcomes has been bilateral and emerging partners. As experienced 62 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

in the Itezhi-Tezhi power project, these delays can Whereas the Bank's activities have attempted increase costs and prolong the achievement of to promote inclusive and green growth, outcomes. opportunities to mainstream gender have not been fully leveraged. The Bank's projects have The Bank has contributed to increasing attempted to promote sustainable investment as well access to basic services and improving the as the reduction of disparities between urban and business environment. However, opportunities rural areas. However, opportunities have not always for upscaling have not been leveraged. At been leveraged to generate business development the country level, the Bank has contributed and employment opportunities for women. LOC to improving access to basic services and and agriculture projects demonstrate that such infrastructure, including water, sanitation, power initiatives should be supported by targeted project and health. In contrast, efforts to strengthen PFM mechanisms whereas the Lumwana Mine project have been less successful. Notably, these gains demonstrates that more can be done to promote have not resulted only from direct investments direct employment opportunities for women within in each sector. Increased access to services and infrastructure and industrial projects. business development have also resulted from large private sector investments, including the Lumwana Mine and Itezhi-Tezhi power plant. Recommendations However, opportunities to complement and upscale the initiatives undertaken by private sector actors Based on the above findings and conclusions, (for example, the corporate social responsibility IDEV proposes the following recommendations. initiatives by Barrick Gold at the Lumwana Mine) have not been addressed. 1. Continue to support private sector regulatory reform and build capacity among Political and governance risks are becoming the accountability functions of government. an increasingly important factor in the sustainability of projects. Whereas risks to the Budget support and TA interventions have been sustainability of earlier projects implemented successful in promoting private sector regulatory in the agriculture and WSS sectors stemmed reform and strengthening of accountability from project design issues, institutional capacity functions, partly due to adequate ownership among and weak ownership among beneficiaries, more implementing bodies. These issues continue to be recent interventions are vulnerable to political and relevant, particularly the need to strengthen audit and governance risks. These risks include regulatory procurement capacity. Furthermore, strengthening changes implemented without consultation, external accountability functions can complement irregularities in procurement, and lack of political the implementation of financial control systems to will to address inadequate tariff regimes. For reduce irregularities and improve public financial example, the sustainability of LOC projects were management. limited by the introduction of interest rate caps and increased capital reserve requirements, whereas 2. Strengthen the Bank’s role in donor investments in the power sector will face challenges coordination, analytical work and policy due to the continued lack of cost-reflective tariffs. dialogue. Conclusions and Recommendations 63

The Bank, with its unique positioning in Africa 4. Identify opportunities to upscale and among the DPs, is expected to play a key development outcomes from private sector role in donor coordination, analytical work and investments. policy dialogue. The policy dialogue needs to be supported by rigorous analytical work, which Although the Bank has helped improved access is also demanded by government in several to services and infrastructure through public areas of public policy including private sector sector projects, private sector investments have development, public private partnerships, and yielded similar results through infrastructure works regulatory systems with policy predictability. and corporate social responsibility initiatives. As The donor coordination efforts are currently demonstrated by the experience of the Itezhi-Tezhi subdued due partly to the withdrawal of several Power Project and the Lumwana Mine, additional cooperating partners from key areas of assistance development impacts and private sector development including budget support. Coordinated efforts are could be realized through complementary required to address deficiencies in the monitoring infrastructure investments surrounding these and evaluation system at the country level to projects. Integrating lessons from past experience enable systematic reporting of results with active into the CSP, the Bank should more systematically participation of all line ministries, and the Bank identify opportunities to upscale and complement should contribute to the ongoing initiative in this such initiatives, thereby further contributing to regard. Finally, policy dialogue should also be service delivery, infrastructure improvements and implemented as a means of addressing increasing business development. political and governance risks to the sustainability of the Bank's projects, particularly with regard to 5. Deepen the integration of gender in Bank’s ensuring adequate consultation with the private operations and engage in policy dialogue on sector to inform regulatory changes. gender with the government in collaboration with cooperating partners. 3. Address constraints to private sector

involvement in service delivery. Even though the Bank’s analytical work on gender Country Strategy Evaluation in Zambia had recommended specific areas for Private sector participation in service delivery, intervention, those were not implemented in earnest. particularly in the energy sector, will play an In the increasingly relevant context of feminization An IDEV increasing role in addressing Zambia's infrastructure of poverty and HIV/AIDS pandemic, gender violence, bottlenecks. However, inadequate tariff structures women’s unequal access to education, health and macroeconomic pressures create disincentives services, and resources including land and credit, to private sector participation. The Bank should it is imperative that the Bank take concrete steps identify, through analytical and policy dialogue in to integrate gender in its operations with respect particular, opportunities to mitigate the impact of to design, implementation and the achievement these constraints through a range of instruments, of results. The Bank, with other cooperating including lending, TA for project selection and partners, should engage in policy dialogue with the guarantees for service delivery and purchasing government and assist in the implementation of the agreements. National Gender Policy 2014 with a focus on gender 64 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

auditing, gender responsive national planning and implementation delays, cost-overruns and output budgeting, and the establishment of a system for quality inconsistencies. Furthermore, the design and monitoring gender outcomes at country level. implementation of co-financed projects with both public and private components should be mindful of 6. Promote synergies within the Bank differences in the approval processes for these two program and in coordination with other sources of funds in order to avoid both unnecessary donors between projects which improve delays and additional costs. the productivity of small businesses and increase access to finance. 8. Increase the capacity of the GRZ for project selection, design and engineering, Increasing the pool of SMEs that generate sufficient particularly for infrastructure projects and revenue to afford formal financial products remains Public Private Partnerships. an obstacle to improving access to finance. Opportunities for creating linkages between Inadequate project design and engineering has interventions which increase production of high frustrated the implementation of projects across value crops, incomes and access to markets among several sectors, including the transport sector, for underserved groups with LOCs or TA for SME which inadequate project design and engineering finance should be explored. Such linkages may yield can result in considerable project delays as well as synergies in terms of access to finance, business procurement disputes. Assistance in implementing development and economic growth. Outgrower and high quality feasibility studies, which identify farmers club schemes provide a proven means of reasonable project costs, would also be beneficial improving agricultural productivity and diversity for the Bank's ongoing support to the WSS sector, while linking farmers to markets and increasing both for which underestimation of the project complexity incomes and access to finance. Attention should be and costs have limited the successful delivery of paid to ensuring that targeted project mechanisms improved sanitation facilities for past interventions. are included to ensure that the benefits are gender As additional PPPs are implemented in Zambia, inclusive. technical assistance should be provided to improve project selection and ensure that PPP arrangements 7. Identify means of harmonizing project are providing added value. Finally, greater attention implementation approaches with other co- should be devoted to identifying and assessing financing partners as well as within projects sensitivity to political and governance risks, including that possess both private and public sector tariff structures, regulatory changes and ownership. components. 9. Identify and mitigate operational issues Addressing regional and domestic infrastructure surrounding multinational projects aimed at constraints will likely necessitate continued regional integration. cooperation and co-financing. The experience of the Kazungula Bridge and Itezhi-Tezhi Power Project The implementation of regional projects has been demonstrates the need for the Bank to work closely subject to excessive delays caused by coordination with other partners by identifying harmonized issues at the regional level, as seen in the case terms, conditions, engineering and procurement of PRODAP, which was discontinued in course of approaches for co-financed projects in order to avoid implementation. Delays in the full implementation Conclusions and Recommendations 65

of one-stop border post constrain the movement establish linkages between the CSP and the broader goods, services and people, affecting the regional integration strategy to ensure bottlenecks competitiveness and economic growth of the are addressed at the right level – either through region in general and Zambia in particular. Based dialogue at country level or coordinated approach on the identification of constraints, the Bank should at regional level. Country Strategy Evaluation An IDEV

Annexes 68 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex A — Evaluation Questions

Evaluation Issue Specific Evaluation Questions 1. Relevance 1.1: To what extent are the Bank's Country Strategies and operations for Zambia aligned with the development needs, challenges and priorities of the country as well as the needs of the expected beneficiaries? 1.2: To what extent are the Bank's Country Strategies for Zambia aligned with the Bank's own strategies, priorities and policies? 1.3: To what extent are the Bank's interventions in Zambia aligned with the Bank's Country Strategies for Zambia? 2. Effectiveness 2.1: To what extent have the Bank's interventions achieved their objectives in terms of the delivery of outputs? 2.2: To what extent have the Bank's interventions contributed to the achievement of development results in terms of expected outcomes? 2.3: To what extent have the Bank's interventions contributed to the achievement of development results for the country, including intended and unintended impacts? 2.4: To what extent have the Bank's interventions benefitted target group members? 3. Efficiency 3.1: To what extent were the Bank's interventions delivered in an efficient and economical manner (were resources economically converted into outputs)? 3.2: To what extent are the Bank's interventions implemented in a timely manner which is consistent with best practices? 3.3: To what extent did the Bank's intervention achieve good value for money (cost-benefit)? 4. Sustainability 4.1: To what extent are the results achieved likely to continue once the Bank's interventions are completed? 4.2: To what extent has the Bank sought to mitigate risks to the sustainability of results as part of the project design process? 5. Crosscutting Themes 5.1: To what extent are the Bank's interventions inclusive in terms of geography, age and gender? 5.2: To what extent are the Bank's interventions environmentally sustainable and support the transition to green growth? 6. Design and Delivery 6.1: To what extent has the quality of CSPs been satisfactory? Are the Bank's interventions coherent and well-coordinated internally? 6.2: To what extent have the Bank's interventions been selective and strategic? 6.3: How has the Bank adapted its interventions to implementation challenges within the country? 6.4: To what extent has the Bank's engagement been informed by policy dialogue with national actors, DPs and other interested stakeholders? 6.5: How well has the Bank leveraged its financial resources within the country through mechanisms such as productive partnerships and co-financing? 6.6: To what extent has the Bank acted as a knowledge broker, advisor and convener? To what extent have the Bank's interventions been informed by the Bank's analytic work as well as that of other DPs? 6.7: To what extent has the Bank cooperated with other DPs to ensure complementarity and reduce overlaps? Annexes 69

Evaluation Issue Specific Evaluation Questions 7. Management for Results 7.1: To what extent has the Bank's supervision of its interventions been effective? 7.2: How has the Bank used supervision and results information to guide the management of its interventions? 7.3: To what extent has the Bank successfully implemented a performance measurement strategy which focuses on the achievement of outputs, outcomes and impacts? 7.4: To what extent have lessons learned been identified and incorporated into subsequent CSPs? 7.5: How has the Bank worked with the GRZ to enhance its own systems of Results-Based Measurement? 7.6: To what extent has the Bank identified and monitored potential implementation risks? Country Strategy Evaluation An IDEV 70 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex B — Zambia Project Portfolio 2002–2015

Project Name Approval Year Net Loan Status (UA'000) Domestic Projects Agriculture Small scale irrigation project* 2000 5,788.6 Completed Project to Support the Lake Tanganyika Integrated Regional Development 2004 1,340.4 Completed Program Humanitarian Emergency Assistance 2005 359.8 Closed Zambia Emergency Assist. Flood Vic. 2008 359.8 Completed Community Water Management Improvement 2009 571.8 Completed Finish Supported Small Scale Irrigation 2009 6,171.3 Ongoing Emergency Assistance to 2009 Flood Mitigation 2010 719.6 Completed Project Preparation Facility - ZM LISP 2013 299.9 Ongoing Livestock Infrastructure Support Project 2013 12,000.0 Ongoing Lake Tanganyika Development Project (Zambia) 2014 21,219.5 Approved GAFSP - Agriculture Productivity & MKT EP 2014 22,394.6 Ongoing Cashew Infrastructure Development Project (CIDP) 2015 32,383.0 Approved Environment Strengthening Climate Resilience Kafue 2013 27,345.6 Ongoing Finance Zanaco Fapa Ta Grant for Zambian Smes 2008 652.3 Closed Investrust Zambia 2008 2,518.7 Closed Zanaco Guarantee Fac./Loc Zanaco- Zambia 2008 7,196.2 Closed PFSL- FAPA TA - Zambia 2009 672.8 Closed FRB Subsidiary in Zambia 2012 31,640.3 Approved CETZAM Financial Services PLC 2013 1,079.4 Ongoing Industry, Mining & Quarrying Lumwana Copper Mining Project 2006 30,371.6 Closed Multi-sector Poverty Reduction Budget Support 2006 20,000.0 Closed Poverty Reduction Budget Support II 2008 14,901.8 Closed Poverty Reduction Budget SupportT III 2010 31,900.0 Closed Fourth Poverty Reduction Budget Support 2011 15,000.0 Closed Power Itezhi-Tezhi Power Project 2012 25,186.7 Approved Itezhi-Tezhi Power Plant and Transmission Line Project 2012 36,400.0 Approved Maamba Collieries Power Generation Project 2013 97,706.5 Approved KARIBA DAM REHABILITATION 2014 25,200.0 Ongoing Social Support for Science & Technology Education 2013 22,220.0 Ongoing Annexes 71

Project Name Approval Year Net Loan Status (UA'000) Skills Development and Entrepreneurship Project - Supportin 2015 21,588.6 Ongoing Transport Sadc North-South Tranport Corridor Improvement Study 2006 1,392.8 Closed Botswana/Zambia - Sadc North-South Corridor Improvement Study 2007 600.0 Closed Nacala Road Corridor Studies 2009 256.0 Ongoing Multi-Nacala Road Corridor Project - Phase II (ZAMBIA) 2010 69,369.0 Ongoing Kazungula Bridge Project 2011 51,000.0 Ongoing Nacala Road Corridor Development Project– Phase IV 2013 5,000.0 APVD Chinsali - Nakonde Road Rehabilitation Project (North-South) 2015 174,867.9 APVD Water Supply and Sanitation Central Province Eight Centers Water Supply and Sanitation 2003 21,342.0 Closed Rural Water Supply & Sanitation Program 2006 15,000.0 Closed Nkana Water Supply and Sanitation Project 2008 34,998.4 Closed Multipurpose Small Dams 2012 755.4 Ongoing Rural Water Supply and Sanitation II - Transforming Rural Livelihoods in 2014 13,937.0 Approved Western Zambia - National Lusaka Sanitation Program 2015 35,981.1 Approved Total (Domestic Projects) 947,837.1 Regional Projects Agriculture Comesa Agric. Marketing Promotion and Reg. Integration Project 2004 3,687.0 Completed SADC- Strengthening of Insitutions 2006 13,710.0 Completed Africa Food Crisis Response 2008 20,000.0 Completed Finance PTA Bank 2nd Line of Credit & Ta Support 2008 649.8 Ongoing Fifth Line of Credit to The Development Bank of Southern Africa Limited 2011 192,068.8 Completed

Business partners international southern africa fund 2012 4,612.7 Completed Country Strategy Evaluation PTA Bank Loc-Equity 2013 2013 32,490.9 Approved Multi-sector

Statistical Capacity Building Under the International Comparison Program 2004 18,140.0 Completed An IDEV for Africa Enhancing Procurement Reforms and Capacity Project 2006 5,660.0 Completed Capacity Strengthening for GS- IOC 2013 616.9 Approved PIDA Capacity Building 2013 5,600.0 Approved Social African Virtual University Project 2004 5,000.0 Completed SADC Support To The Control Of Communicable Diseases 2006 20,000.0 Ongoing SADC Capacity Building For Open And Distance Learning 2006 15,000.0 Ongoing African Virtual University Support Project - Phase II (AVU II) 2011 10,000.0 Ongoing Transport Program for Infrastructure Development 2005 1,679.0 Completed SADC Technical Assistance - Transport 2006 350.0 Completed COMESA Airspace Integration Program 2010 5,750.0 Ongoing Water Supply and Sanitation Support to Sadc Wss Program 2009 18,231.3 Ongoing Total (Regional Projects) 373,246.4 72 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex C — Evaluation Matrix and Theory of Change

1. Relevance Evaluation Question Judgement Criteria Data Sources 1.1: To what extent are the Bank's Country ❙❙ Thematic consistency of the Bank's ❙❙ National and Sector-level Development Strategies and operations for Zambia CSPs with the GRZ's strategic framework Strategies aligned with the development needs, for development and priorities. ❙❙ Bank CSPs for Zambia challenges and priorities of the country ❙❙ Consistency between Bank strategies ❙❙ Interviews with RMC stakeholders as well as the needs of the expected and country development needs among beneficiaries? RMC stakeholders. ❙❙ Available literature ❙❙ Degree of consistency between the Bank's strategies and development needs identified in the available literature. 1.2: To what extent are the Bank's Country ❙❙ Degree of consistency between the ❙❙ Bank Policy and Strategy documents Strategies for Zambia aligned with the Zambia Country Strategies and the ❙❙ Bank CSPs for Zambia Bank's own strategies, priorities and strategic priorities of the Bank. ❙❙ Interviews with Bank staff policies? ❙❙ Degree of consistency between the Bank's interventions and its strategic priorities at the sector level. 1.3: To what extent are the Bank's ❙❙ Degree to which project approvals over ❙❙ File Review of project information interventions in Zambia aligned with the each CSP period reflect contemporary ❙❙ Bank CSPs for Zambia Bank's Country Strategies? CSPs. ❙❙ Interviews with Bank staff Rationale and Approach The relevance of the Bank's assistance will be assessed at both the project and country levels along three dimensions: (i) alignment of projects and the CSP with demonstrable development needs; (ii) alignment of the CSP with the Bank's corporate and sector-level strategies; and (iii) alignment of projects with the CSP and with Regional Integration Strategies. Evidence from each of the evaluation questions will be triangulated to provide an overall rating on a 6-point scale from Highly Satisfactory to Highly Unsatisfactory, as provided below. 6 – Highly Satisfactory: It is demonstrated that the project objectives doesn’t have any shortcoming in their alignment with: i) the Bank’s CSP, ii) applicable Bank sector strategies, iii) the country’s development strategies, and iv) the beneficiary needs. 5 –Satisfactory: It is demonstrated that the project objectives have minor shortcomings in the alignment with: i) the Bank’s CSP, ii) applicable Bank sector strategies, iii) the country’s development strategies, and iv) the beneficiary needs. 4 – Moderately Satisfactory: It is demonstrated that the project objectives have moderate shortcomings in the alignment with: i) the Bank’s CSP, ii) applicable Bank sector strategies, iii) the country’s development strategies, and iv) the beneficiary needs 3 – Moderately Unsatisfactory: It is demonstrated that the project objectives have significant shortcomings in the alignment with one of the following: i) the Bank’s CSP, ii) applicable Bank sector strategies, iii) the country’s development strategies, and iv) the beneficiary needs. 2 – Unsatisfactory: It is demonstrated that the project objectives have major shortcomings in the alignment with two of the following: i) the Bank’s CSP, ii) applicable Bank sector strategies, iii) the country’s development strategies, and iv) the beneficiary needs. 1 – Highly Unsatisfactory: It is demonstrated that the project objectives have severe shortcomings in the alignment with all of the following: i) the Bank’s CSP, ii) applicable Bank sector strategies, iii) the country’s development strategies, and iv) the beneficiary needs. Annexes 73

2. Effectiveness Evaluation Question Data Sources 2.1: To what extent have the Bank's interventions achieved their ❙❙ Review of supervision reports and project monitoring objectives in terms of the delivery of outputs? information 2.2: To what extent have the Bank's interventions contributed ❙❙ PCRs, XSRs, BTORs and mid-term reviews to the achievement of development results in terms of expected ❙❙ Available country statistics for key indicators outcomes? ❙❙ Interviews with project stakeholders (Bank staff, 2.3: To what extent have the Bank's interventions contributed to implementing partners, GRZ) the achievement of development results for the country, including intended and unintended impacts? ❙❙ Interviews and/or surveys of beneficiaries as possible 2.4: To what extent have the Bank's interventions benefitted target ❙❙ Field visits group members? Judgement Criteria and Rationale Effectiveness will be examined at the project, sector and strategy levels and will center on the achievement of both outputs and immediate outcomes. The achievement of intermediate outcomes will be considered where credible data are available. This examination of the Bank's effectiveness will be based on a triangulation of qualitative and quantitative evidence from both primary and secondary sources to inform a robust and credible assessment. First, each project will be rated on a six-point scale ranging from Highly Satisfactory to Highly Unsatisfactory. Next, a rating will be provided for each sector based on the extent to which the collection of projects are found to have contributed to sector-level outcomes, identified below. Finally, a global rating will be provided based on the extent to which the projects are found to have contributed to country-level outcomes identified in the underlying Theory of Change for the CSP. The rating scale for the assessment of outputs is provided below. 6 – Highly Satisfactory: Based on the output execution ratio all the project output targets were reached or are considered on track to be reached by the end of the project in accordance with quality standards. 5 – Satisfactory: Based on the output execution ratio between 90 percent and 99 percent of the project output targets were reached or are considered on track to be reached by the end of the project. Corrective actions for off track indicators were implemented in a timely manner to ensure that the end of project targets could be achieved in accordance with quality standards. 4 – Moderately Satisfactory: Based on the output execution ratio between 75 percent and 89 percent of the project output targets were reached or are considered on track to be reached by the end of the project. Corrective actions for off track indicators were implemented in a timely manner to ensure that the end of project targets could be achieved in accordance with quality standards. 3 – Moderately Unsatisfactory: Based on the output execution ratio between 50 percent and 74 percent of the project output

targets were reached or are considered on track to be reached by the end of the project. Corrective actions for off track indicators Country Strategy Evaluation were not implemented in a timely manner to ensure that the end of project targets could be achieved. 2 – Unsatisfactory: Based on the output execution ratio between 35 percent and 49 percent of the project output targets were reached or are considered on track to be reached by the end of the project. Corrective actions were not implemented and closely monitored for off track indicators. Poor performance jeopardized the achievement of one or more outcomes of the project. An IDEV 1 – Highly Unsatisfactory: Based on the output execution ratio less than 35 percent of the project output targets were reached or are considered on track to be reached by the end of the project. Poor performance jeopardized the achievement of most expected outcomes and the possibility of stopping or suspending the project was considered. 74 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

2. Effectiveness Evaluation Question Data Sources 2.1: To what extent have the Bank's interventions achieved their ❙❙ Review of supervision reports and project monitoring objectives in terms of the delivery of outputs? information 2.2: To what extent have the Bank's interventions contributed ❙❙ PCRs, XSRs, BTORs and mid-term reviews to the achievement of development results in terms of expected ❙❙ Available country statistics for key indicators outcomes? ❙❙ Interviews with project stakeholders (Bank staff, 2.3: To what extent have the Bank's interventions contributed to implementing partners, GRZ) the achievement of development results for the country, including intended and unintended impacts? ❙❙ Interviews and/or surveys of beneficiaries as possible 2.4: To what extent have the Bank's interventions benefitted target ❙❙ Field visits group members? Judgement Criteria and Rationale The rating scale for the assessment of outcomes will be applied as follows: 6 – Highly Satisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/factors and assumptions, it is plausible to expect that all intended project outcomes were achieved or are likely to be achieved. 5 – Satisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/ factors and assumptions, it is plausible to expect that most (75 percent) intended project outcomes were achieved or are likely to be achieved. 4 – Moderately Satisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/factors and assumptions, it is plausible to expect that a substantial (50 percent-74 percent) intended project outcomes were achieved or are likely to be achieved. 3 – Moderately Unsatisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/factors and assumptions, it is plausible to expect that few (25-49 percent) intended project outcomes were achieved or are likely to be achieved. 2 –Unsatisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/ factors and assumptions, it is plausible to expect that few (5-24 percent) intended project outcomes were achieved or are likely to be achieved. For completed projects, IDEV will conduct an in-depth assessment of the results chain consistent with the approach recommended in the Evaluation Cooperation Group's "Big Book on Evaluation Good Practice Standards," including: ❙❙ An assessment of the causal chain in relation to the needs of the target population in collaboration with stakeholders and experts; ❙❙ Examination of the critical assumptions and expectations inherent in the project's design; ❙❙ Use of available research evidence and practical experience to compare the project with projects based on similar concepts; and ❙❙ Observation of the project in operation, focusing on interactions that were expected to produce the intended outcomes. Special note will be taken of challenges and enabling factors within the implementation context for each project in order to test the Bank's Theory of Change for its operations in Zambia. Annexes 75

Sector Results Chain and Potential Indicators Agriculture and Environment Ultimate outcomes ❙❙ Economic growth and diversification ❙❙ Reduced poverty and enhance food security in rural communities Intermediate outcomes ❙❙ Increase income for farmers ❙❙ Increased agricultural productivity ❙❙ Increased agricultural diversification Immediate outcomes ❙❙ Increased farm land under cultivation ❙❙ Increased use of irrigation technology and equipment ❙❙ Increased access to markets ❙❙ Increased access to credit Outputs ❙❙ Development of new farm blocks and out-grower schemes ❙❙ Provision of credit to farmers ❙❙ Guaranteed market agreements ❙❙ Delivery of improved infrastructure technology ❙❙ Provision of training and capacity building Sample Indicators ❙❙ hectares of cultivated land ❙❙ hectares of irrigated land ❙❙ average income for farmers in target area ❙❙ Simpson Diversity Index by crop ❙❙ agricultural exports (percent GDP) Production of key crops Country Strategy Evaluation An IDEV 76 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Sector Results Chain and Potential Indicators Water Supply and Sanitation Ultimate outcomes ❙❙ Increased access to basic services and infrastructure ❙❙ Poverty reduction Intermediate outcomes ❙❙ Increased use and maintenance of WSSS facilities ❙❙ Reduced incidence of water borne disease Immediate outcomes ❙❙ Increased access to improved WSS facilities ❙❙ Increased volume of treated water ❙❙ Increased reliability of water service ❙❙ Reduced unaccounted for water Outputs ❙❙ WSS facilities constructed or rehabilitated ❙❙ Sanitation facilities provided in public institutions (schools, health center and markets) ❙❙ Delivery of Sanitation and hygiene promotion training ❙❙ Implementation of sewerage and treatment infrastructure ❙❙ Establishment of Commercial Water Utilities and Community Maintenance Groups Indicators ❙❙ Number of people with access to safe water and sanitation facilities ❙❙ Number of cubic meters of water supplied annually ❙❙ Water supply and sanitation facilities constructed ❙❙ Number of water points rehabilitated ❙❙ Number of meters installed ❙❙ Percent unaccounted for water ❙❙ Proportion of water tests meeting standards ❙❙ Number of hours of water service per day ❙❙ Sewage treatment rate by area Annexes 77

Sector Results Chain and Potential Indicators Multi-Sector and Social Ultimate goal Sector ❙❙ Transparent and Accountable Public Financial Management ❙❙ Creation of a Business Enabling environment ❙❙ Increased Access to Pro-Poor Social Services Intermediate outcomes ❙❙ Improved access to health and education services ❙❙ Strengthened accountability functions ❙❙ Reduced public debt and budget variance ❙❙ Increased access to finance for the private sector ❙❙ Increased business registration ❙❙ Reduced perceived corruption Immediate outcomes ❙❙ Increased financial and administrative decentralization ❙❙ Improved budget credibility and financial controls ❙❙ Strengthened procurement and audit functions ❙❙ Reduced time to register property and businesses ❙❙ Reduced time to import and export ❙❙ Reduced number of business licenses Outputs ❙❙ Implementation of Private Sector Development Plans ❙❙ Implementation of a One Stop Border Post ❙❙ Implementation of Land registry Offices ❙❙ Annual Audits of Public Accounts ❙❙ Number of Audit Professionals Hired ❙❙ Establishment of the ZPPA and Standard Procurement Documents ❙❙ Implementation of IFMIS and Single Treasury Account ❙❙ Establishment of the DACF and Local Government Service Country Strategy Evaluation ❙❙ Construction of Schools and Health Centers ❙❙ Hiring of health and education professionals Indicators ❙❙ Doing Business Scores An IDEV ❙❙ CPIA Scores ❙❙ PEFA Scores ❙❙ World Development Indicators - businesses registered, number of days to register a business, etc. ❙❙ Percentage of budget released to district boards ❙❙ TPI Corruption Perception Index ❙❙ Percent Implementation of Audit Recommendations ❙❙ Percent Audit Coverage ❙❙ Percent use of competitive procurement processes ❙❙ Number of days to register a business ❙❙ Number of days to import and export products ❙❙ Expenditure variance 78 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Sector Results Chain and Potential Indicators Private Sector / Finance Ultimate Outcomes ❙❙ Economic growth and diversification ❙❙ Creation of an enabling business environment Intermediate Outcomes ❙❙ Job creation and employment ❙❙ Increased access to basic infrastructure and social services ❙❙ Increased profitability of beneficiary companies ❙❙ Increased access to finance ❙❙ Increased government tax revenues Immediate Outcomes ❙❙ Increased availability of SME financing products and services ❙❙ Increased SME lending ❙❙ Improved SME lending terms ❙❙ Enhanced capacity for compliance with environmental and social standards and monitoring Outputs ❙❙ Provision of training and TA ❙❙ Provision of LOC to financial institutions ❙❙ Delivery of planned infrastructure works ❙❙ Development of an open-cast copper mine ❙❙ Implementation of ESMP ❙❙ On-lending of funds to SMEs Indicators ❙❙ Number of jobs created (local jobs and jobs for women) ❙❙ Percent increase in SME lending portfolio among target institutions ❙❙ Percent increase in SME loan approvals (proportion for women) ❙❙ Number of new SMEs financed ❙❙ Percent reduction in collateral requirements ❙❙ Percent of projects in compliance with Environmental and Social standards ❙❙ Government tax revenues as a share of GDP/Expenditure ❙❙ Percent supported women owned businesses and first time borrowers ❙❙ Annual revenues ❙❙ Percent NPLs Annexes 79

Sector Results Chain and Potential Indicators Transport Ultimate Outcomes ❙❙ Improved access to basic social services and infrastructure ❙❙ Inclusive growth and poverty reduction Intermediate Outcomes ❙❙ Increased access to markets and social services ❙❙ Increased regional trade ❙❙ Job creation and increased incomes ❙❙ Increased trade volumes ❙❙ Reduced import and export time and costs Immediate Outcomes ❙❙ Reduced vehicle operating costs and transport costs ❙❙ Improved road safety ❙❙ Reduced travel and border transit time ❙❙ Increased traffic throughput ❙❙ Improved project coordination Outputs ❙❙ Delivery of project design plans and specifications, estimates and tender documents for planned infrastructure installations ❙❙ Provision of consultancy services ❙❙ Provision of HIV/AIDS sensitization training ❙❙ number and percentage of ESMP projects successfully implemented ❙❙ Construction of border posts and bridges ❙❙ Rehabilitation of key roads ❙❙ Delivery of procurement capacity development training Indicators ❙❙ Annual value of regional and international trade ❙❙ Quantity of traffic and value of goods transported through border posts

❙❙ Border transit time Country Strategy Evaluation ❙❙ Vehicle operating costs ❙❙ Number of job created during construction and operation

❙❙ Annual number of road accidents and fatalities along corridor An IDEV ❙❙ Number of people trained ❙❙ Length of roads rehabilitated ❙❙ Length of roads built ❙❙ Number of border stations built 80 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Sector Results Chain and Potential Indicators Energy Ultimate Outcomes ❙❙ Increased access to basic services and infrastructure ❙❙ Creation of an enabling business environment Intermediate Outcomes ❙❙ Increased government revenues ❙❙ Increased access to and use of electricity ❙❙ Reduced carbon emissions ❙❙ Improved sustainability of power supply ❙❙ Increased private sector development Immediate Outcomes ❙❙ Increased electricity generation capacity ❙❙ Job creation (for women and local population) ❙❙ Increased access to basic services Outputs ❙❙ Implementation of proposed works ❙❙ Transmission lines built ❙❙ Sub-stations built and/or extended ❙❙ Implementation of proposed ESMP/RAP activities ❙❙ Provision of capacity development assistance ❙❙ Improved tariff structure Indicators ❙❙ Power supply capacity in MW ❙❙ National electrification rate ❙❙ Number of jobs created during construction and operation (for women, youths and local population) ❙❙ Total up-front and annual concession fees accrued ❙❙ Length of transmission line built ❙❙ Number of substations built or extended ❙❙ Number of ESMP/RAP activities implemented ❙❙ Net tons of carbon emissions equivalents avoided each year Annexes 81

3. Efficiency Evaluation Question Indicators Data Sources 3.1: To what extent were the Bank's ❙❙ Implementation Progress Ratings (IPRs) ❙❙ Project Completion Reports interventions delivered in an efficient ❙❙ Perceived timeliness and economy of ❙❙ Interviews with Task Managers and and economical manner (were resources project implementation implementation partners economically converted into outputs)? 3.2: To what extent are the Bank's ❙❙ Ratio of planned versus actual ❙❙ Project Completion Reports interventions implemented in a timely implementation time at the project level ❙❙ Interviews with Task Managers and manner which is consistent with best implementation partners practices? 3.3: To what extent did the Bank's ❙❙ Extent to which the chosen project ❙❙ File review of project documents intervention achieve good value for money approach has yielded results at less cost ❙❙ Project completion reports (cost-benefit)? relative to other potential approaches. ❙❙ Interviews with task managers and ❙❙ Economic Internal Rate of Return implementation partners ❙❙ Financial Internal Rate of Return ❙❙ Review of available literature Judgement Criteria and Rationale The assessment of efficiency will involve three components, namely: (i) the effective use of resources for the delivery of planned outputs; (ii) implementation timeliness; and (iii) extent of the results achieved relative to cost and implementation time (cost-benefit). The assessment will be informed by a triangulation of qualitative and quantitative evidence from project supervision and completion reports, as well as a review of the available literature. A rating will be provided for each dimension using a six-point rating scale from Highly Satisfactory to Highly Unsatisfactory, depending on the availability of adequate data. In addition, a global rating will be provided for efficiency of the Bank's operations in Zambia over the evaluation period. With respect to timeliness, the following rating scale will be applied: 6 – Highly Satisfactory: The ratio of planned implementation time (as per PAR) and actual implementation time from the date of approval is expected to be <1. 5 – Satisfactory: The ratio of planned implementation time (as per PAR) and actual implementation time from the date of approval is expected to be 1.0-1.1. 4 – Moderately Satisfactory: The ratio of planned implementation time (as per PAR) from the date of approval and actual implementation time from the date of effectiveness is expected to be 1.11-1.2. 3 – Moderately Unsatisfactory: The ratio of planned implementation time (as per PAR) from the date of effectiveness and actual implementation time from the date of effectiveness is expected to be 1.21-1.3. Country Strategy Evaluation 2 – Unsatisfactory: The ratio of planned implementation time (as per PAR) from the date of effectiveness and actual implementation time from the date of effectiveness is expected to be 1.31-1.4. 1 – Highly Unsatisfactory: The ratio of planned implementation time (as per PAR) from the date of effectiveness and actual project An IDEV implementation time from the date of effectiveness is expected to be 1.41-1.5 With respect to economic efficiency, the following rating scale will be applied: 6 – Highly Satisfactory: If EIRR is equal or above the opportunity cost of capital. 5 – Satisfactory: If (90 percent of the opportunity cost of capital ≤ EIRR < the opportunity cost of capital) 4 – Moderately Satisfactory: If (80 percent of the opportunity cost of capital ≤ EIRR < 90 percent of the opportunity cost of capital). 3 – Moderately Unsatisfactory: If (60percent of the opportunity cost of capital ≤ EIRR < 80 percent of the opportunity cost of capital). 2 – Unsatisfactory: If (40 percent of the opportunity cost of capital ≤ EIRR < 60 percent of the opportunity cost of capital). 1 – Highly Unsatisfactory: If EIRR is less than 40 percent of the opportunity cost of capital. 82 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Judgement Criteria and Rationale The rating scale for the assessment of outcomes will be applied as follows: 6 – Highly Satisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/factors and assumptions, it is plausible to expect that all intended project outcomes were achieved or are likely to be achieved. 5 – Satisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/ factors and assumptions, it is plausible to expect that most intended project outcomes were achieved or are likely to be achieved. 4 – Moderately Satisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/factors and assumptions, it is plausible to expect that a substantial (50 percent-74 percent) intended project outcomes were achieved or are likely to be achieved. 3 – Moderately Unsatisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/factors and assumptions, it is plausible to expect that few (25-49 percent) intended project outcomes were achieved or are likely to be achieved. 2 –Unsatisfactory: Taking into account the latest value of the outcome indicators and the analysis of other relevant exogenous risks/ factors and assumptions, it is plausible to expect that few (5-24 percent) intended project outcomes were achieved or are likely to be achieved. For completed projects, IDEV will conduct an in-depth assessment of the results chain consistent with the approach recommended in the Evaluation Cooperation Group's "Big Book on Evaluation Good Practice Standards," including: ❙❙ An assessment of the causal chain in relation to the needs of the target population in collaboration with stakeholders and experts; ❙❙ Examination of the critical assumptions and expectations inherent in the project's design; ❙❙ Use of available research evidence and practical experience to compare the project with projects based on similar concepts; and ❙❙ Observation of the project in operation, focusing on interactions that were expected to produce the intended outcomes. Special note will be taken of challenges and enabling factors within the implementation context for each project in order to test the Bank's Theory of Change for its operations in Zambia. Annexes 83

4. Sustainability Evaluation Question Data Sources 4.1: To what extent has the Bank sought to mitigate risks ❙❙ File review of project documents to the sustainability of results as part of the project design ❙❙ Readiness Reviews process? ❙❙ Interviews with Bank staff, government and local stakeholders and implementation units ❙❙ Site visits Criteria Indicators Technical Soundness ❙❙ Extent to which the technical design of the project was supported by extensive analytics. ❙❙ Extent to which maintenance requirements and operational risks have been identified in the project design. ❙❙ Extent to which the technical design of the project is based on mechanisms and methods which have a demonstrated track record of success. Financial and Economic Viability ❙❙ Extent to which adequate public resources or user fees are available to support the continued operation and maintenance of the investment. ❙❙ Extent to which private sector operations demonstrate long-term profitability ❙❙ Extent to which long-term financial and technical support has been secured from partners and co-financers. Institutional Sustainability ❙❙ Use of country systems for implementation (where feasible). ❙❙ Identification and implementation of necessary institutional reforms and mechanisms. ❙❙ Extent of policy dialogue and national ownership in implementing necessary policy and institutional reforms. Ownership and Partnerships ❙❙ Extent to which interventions have been implemented in consultation and partnership with local authorities, CSOs, other donors and the private sector.

Resilience ❙❙ Degree of project resilience to exogenous factors, including Country Strategy Evaluation climate and economic shocks 4.2: To what extent are the results achieved likely to continue ❙❙ File review of project documents once the Bank's interventions are completed? ❙❙ Interviews with Bank staff, government and local stakeholders and An IDEV implementation units ❙❙ National Statistics (where available) ❙❙ Site visits Sector Indicators Agriculture and Environment ❙❙ Evidence of regular maintenance conducted for infrastructure investments (for example rural roads, irrigation schemes, storage facilities) ❙❙ Implementation of identified agricultural sector reforms ❙❙ Village and district development plans funded and implemented Water Supply and Sanitation ❙❙ Share of infrastructure investments appropriately maintained and still operational ❙❙ Share of water-supply schemes which are financially self- sustainable ❙❙ Technical and financial capacity for maintenance and operation among local officials. 84 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

4. Sustainability Sector Indicators Transport ❙❙ Evidence of regular maintenance for infrastructure investments ❙❙ Long-term trends is travel times and Vehicle Operating Costs ❙❙ Long-term financial sustainability of maintenance schemes ❙❙ Implementation of identified policy reforms Education ❙❙ Share of targeted institutions and training facilities operational and maintained ❙❙ Retention of specialized faculty and trained staff ❙❙ Financial sustainability of targeted training and educational facilities Finance / Private Sector Development ❙❙ Economic and financial performance of selected projects (profitability) ❙❙ Retention rate of trained staff ❙❙ Repayment rate for financial support to SMEs ❙❙ Growth of loans to MSMEs Multi-Sector ❙❙ Extent of implementation of targeted reforms ❙❙ Extent of reforms appropriately supported by public funds ❙❙ Retention of trained staff ❙❙ Demonstrated use and maintenance of improved systems Power ❙❙ Evidence of regular maintenance for infrastructure investments ❙❙ Share of electrical distribution systems and transmission lines properly functioning ❙❙ Long-term financial sustainability of maintenance schemes ❙❙ Technical and financial capacity for maintenance and operation among local officials ❙❙ Implementation of identified policy reforms ❙❙ The extent of line losses (technical and non-technical) ❙❙ Deviation between unite cost and average tariff Annexes 85

Judgement Criteria and Rationale The assessment of sustainability will be conducted via two streams of analysis: (i) the extent to which the project design has adequately examined and addressed critical elements to promote the long-term sustainability of the project; and (ii) the demonstrated long-term viability and sustainability of project outputs and outcomes. The assessment will primarily focus on the first stream of analysis. The second stream of analysis will be used to inform sector-level and global ratings depending on the availability and credibility of relevant data.

A rating for sustainability will be provided at both the project and program levels against a six-point scale from Highly Satisfactory to Highly Unsatisfactory, as provided below.

6 – Highly Satisfactory: The project is not technically complex or complexities have been mitigated appropriately. The project does not depend on exogenous factors, or risks to the achievement of results are limited. The project design has involved relevant stakeholders who remain engaged in project implementation. There are few political or governance risks which could impact the implementation of the project. Relevant institutional capacity needs have been identified and addressed. Arrangements have been made for the continued financial sustainability of the project. Identification and mitigation of risks to the achievement and sustainability of results has been comprehensive, contributing the achievement of results. 5 – Satisfactory: Identification and mitigation of risks to sustainability have been adequate, but not comprehensive. Omissions have had no impact on the achievement of results. 4 – Moderately Satisfactory: Identification and mitigation of risks to sustainability have been adequate, but not comprehensive. Some limited impacts on the achievement of results have been observed. 3 – Moderately Unsatisfactory: Identification and mitigation of risks to sustainability has overlooked some key risks. Results have been achieved, but achievement has been influenced by uncontrolled risks. 2 – Unsatisfactory: Mitigation of identified risks to sustainability has been inadequate with a material impact on the achievement of results. 1 – Highly Unsatisfactory: Limited consideration has been given to risks to sustainability, with substantial limitations to the achievement of intended results.

5. Crosscutting themes Evaluation Question Indicators Data Sources 5.1: To what extent do the Bank's ❙❙ Degree and depth of gender analysis in the design and ❙❙ File review of project interventions inclusive in terms of delivery of projects documentation geography, age and gender? ❙❙ Share of interventions with specific components ❙❙ Review of available PCRs/ addressing gender inequality XSRs Country Strategy Evaluation ❙❙ Share of projects utilizing gender checklists and ❙❙ Interviews with task gender-informed design managers, local ❙❙ Extent of institutional capacity development support government stakeholders An IDEV provided for the identification and management of and implementing gender disparities. partners ❙❙ Geographical distribution of operations ❙❙ site visits ❙❙ Share of bank interventions which explicitly consider or address regional disparities 5.2: To what extent are the Bank's ❙❙ Share of infrastructure projects which integrate interventions environmentally sustainable environmental protection measures and support the transition to green ❙❙ Share of new projects designed using climate growth? checklists, environmental experts and climate-informed design ❙❙ Existence of mechanisms for monitoring and addressing environmental impact ❙❙ Extent of support provided for institutional capacity development surrounding environmental management and climate change Judgement Criteria and Rationale The assessment of crosscutting themes will involve an examination of the extent to which the themes of inclusive and green growth have been incorporated into the design and delivery of each project. A global assessment will be provided for the Bank's portfolio in Zambia against a six-point scale ranging from Highly Satisfactory to Highly Unsatisfactory 86 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

6. Design and Delivery Evaluation Question Indicators Data Sources 6.1: To what extent has the quality of CSPs ❙❙ Extent to which CSPs have been identified as ❙❙ CSP documents been satisfactory? To what extent are the Satisfactory through reviews of Quality at Entry ❙❙ Government Development Bank's interventions coherent and well- ❙❙ Extent of linkages among operations in different sectors. Strategies coordinated internally? ❙❙ Available literature 6.2: To what extent have the Bank's ❙❙ Degree of concentration of the Bank's activities in interventions been selective and strategic? selected focus areas ❙❙ Reviews of Quality at Entry ❙❙ Evidence of demonstrated expertise and comparative advantage within selected focus areas ❙❙ Readiness Reviews ❙❙ Extent of complementarity with the activities of other ❙❙ Review of ESWs and donors and partners knowledge products 6.3: How has the Bank adapted its ❙❙ Evidence of ongoing analysis of implementation ❙❙ File review of project interventions to implementation challenges challenges and limitations documents within the country? ❙❙ Share of projects utilizing innovative design approaches ❙❙ Interviews with Country and instruments Team, GRZ ❙❙ Share of projects addressing emerging development ❙❙ stakeholders, partners needs and co-financers 6.4: To what extent has the Bank's ❙❙ Evidence of ongoing and strategic policy dialogue with engagement been informed by policy the GRZ dialogue with national actors, DPs and ❙❙ Evidence of appropriate stakeholder mapping and other interested stakeholders? engagement with potential partners in the design of programs and projects 6.5: How well has the Bank leveraged ❙❙ Share of projects which utilize co-financing its financial resources within the country ❙❙ Evidence of strategic engagement with partners to through mechanisms such as productive identify opportunities for co-financing partnerships and co-financing? ❙❙ Evidence of strategic selection of projects as candidates for partnership and co-financing 6.6: To what extent has the Bank ❙❙ Extent and quality of sector and thematic analyses acted as a knowledge broker, advisor ❙❙ Evidence of ongoing research and ESW to inform and convener? To what extent are the program and project design Bank's interventions coherent and well- coordinated internally? ❙❙ Evidence of TA provided to inform necessary policy and institutional reforms ❙❙ Evidence of ongoing policy dialogue with government stakeholders to identify opportunities for analytical support and partnership. 6.7: To what extent has the Bank ❙❙ Evidence of donor mapping to inform the Bank's cooperated with other DPs to ensure strategic positioning complementarity and reduce overlaps? ❙❙ Extent to which the Bank's interventions overlap with those of other development institutions ❙❙ Share of the Bank's interventions co-financed by other DPs ❙❙ Degree of collaboration with other DPs in project design, analytical work, monitoring and reviews ❙❙ Extent of participation and leadership in donor partnership groupings Annexes 87

Judgement Criteria and Rationale This assessment will involve consideration of the extent to which the Bank has successfully implemented strategic operating mechanisms to promote the achievement of sustainable development results and maximize its value as a DPs. These mechanisms, identified in corporate strategies such as the TYS and the MTS, include: ❙❙ Implementing high-quality strategies which are informed by dialogue and consultations with RMCs; ❙❙ Ensuring selectivity in operations; ❙❙ Providing innovative solutions to development challenges; ❙❙ Providing knowledge and technical advice; ❙❙ Leveraging financial resources through convening co-financers, including other DPs and the private sector; and ❙❙ Maintaining effective partnerships with other DPs. A global rating will be provided for management of the Bank's portfolio in Zambia against a six point scale ranging from Highly Satisfactory to Highly Unsatisfactory. The rating will be made based on a triangulation of evidence from project documents, interviews with key stakeholders and site visits. With respect to the Quality of Project Design, the flowing rating scale will be applied: 6 – Highly Satisfactory: The project design was fully conducive to achieving the project results. The original design was solid and remained appropriate throughout implementation; no adjustments to the scope, implementation arrangements or technical solutions were required to ensure the achievement of the intended outcomes and outputs. 5 – Satisfactory: The project design was largely conducive to achieving the project results. The original design was solid and remained appropriate throughout implementation; minor adjustments to the scope, implementation arrangements or technical solutions were required to ensure the achievement of the intended outcomes and outputs. 4 – Moderately Satisfactory: The project design was moderately conducive to achieving the project results. The original design was to some extent, sound and remained appropriate throughout implementation; adjustments to the scope, minor implementation arrangements or technical solutions were required and they were carried out in a timely manner to ensure the achievement of the intended outcomes and outputs. 3 – Moderately Unsatisfactory: The design was somewhat conducive to achieving the project results. The original design was either weak or lost its relevance during implementation; major adjustments to the scope, implementation arrangements or technical solutions were required during implementation, but these were done with substantial delays which negatively affected the achievement of the intended outcomes and outputs. 2 –Unsatisfactory. From approval to closure, the design was marginally conducive to achieving the project results. The original design was weak and remained irrelevant. Major adjustments to the scope, implementation arrangements or technical solutions were required during implementation, but these were not done which negatively affected the achievement of the intended outcomes and outputs. Country Strategy Evaluation 1 – Highly Unsatisfactory. The project design was fully not conducive to achieving the project results. The original design was weak and remained irrelevant during implementation. Major adjustments to the scope, implementation arrangements or technical solutions were required during implementation, but these were not done which negatively affected the achievement of the intended outcomes An IDEV and outputs. 88 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Judgement Criteria and Rationale With respect to the Quality at Entry of Country Strategies, the following rating scale will be applied: 6 – Highly Satisfactory: The Bank’s strategy is based on a compelling intervention logic demonstrating a thorough understanding of the country’s evolving context, proposing solutions fully adapted to this context in all areas of intervention, and showing substantive innovation (analysis and product mix) over time in responding to challenges to achieving results. The Bank’s strategy presents a compelling analysis of the respective positioning of development partners, areas of comparative advantage and matching of this analysis with the evolving context and challenges of the country to define priority areas of assistance for the Bank and the interconnections between those from a programmatic perspective. 5 –Satisfactory: The Bank’s strategy is based on a sound intervention logic demonstrating a thorough understanding of the country’s evolving context, proposing solutions variably adapted to this context depending on the area of intervention, and showing some innovation (analysis and product mix) over time in responding to challenges to achieving results. The Bank’s strategy presents a clear analysis of the respective positioning of development partners, areas of comparative advantage and matching of this analysis with the evolving context and challenges of the country to define priority areas of assistance for the Bank but does not fully articulate interconnections and integration constraints in the program. 4 – Moderately Satisfactory: The Bank’s strategy is based on a sound intervention logic demonstrating a good understanding of the country’s evolving context, proposing solutions variably adapted to this context depending on the area of intervention, and not showing much innovation (analysis and product mix) over time in responding to challenges to achieving results. The Bank’s strategy presents an analysis of the respective positioning of development partners and areas of comparative advantage but the analysis does not fully show how this translates into priority areas of assistance for the Bank matching the evolving context and challenges of the country. 3 – Moderately Unsatisfactory: The Bank’s strategy is based on an intervention logic showing partial understanding of the country’s evolving context, proposing solutions variably adapted to this context depending on the area of intervention, and not showing much innovation (analysis and product mix) over time in responding to challenges to achieving results. The Bank’s strategy proposes an analysis of positioning and comparative advantage. Priority areas of assistance aligned with needs are proposed without relating them to this analysis. 2 – Unsatisfactory: The Bank’s strategy is based on an unclear intervention logic showing low understanding of the country’s evolving context, proposing “business as usual” solutions variably adapted to this context depending on the area of intervention. The Bank’s strategy proposes a basic analysis of positioning and comparative advantage but fails to articulate clearly the result in terms of areas of intervention which in practice overlap with areas of intervention of the ongoing portfolio. 1 – Highly Unsatisfactory: The Bank’s strategy is disconnected from the evolving context of the country and used as justification for an ongoing portfolio of operations designed and implemented as a compilation of projects agreed with direct national counterparts in the area covered. The Bank’s strategy replicates areas of intervention of the ongoing portfolio without any convincing analysis of positioning. Annexes 89

7. Management for Results Evaluation Question Indicators Data Sources 7.1: To what extent has the Bank's ❙❙ Extent to which projects have been supervised on an ❙❙ File review of project supervision of its interventions been annual basis documents effective? ❙❙ Extent to which supervision has been supported by field ❙❙ Review of PCRs, XSRs, offices mid-term reviews and ❙❙ Share of projects which underwent a mid-term review BTORs of progress ❙❙ Interviews with Task 7.2: How has the Bank used supervision ❙❙ Evidence that supervision reports have been used to Managers, Field Office and results information to guide the inform ongoing implementation Staff, implementation units and GRZ management of its interventions? ❙ ❙ Evidence of implementation and design changes made stakeholders in response to ongoing supervision and monitoring ❙❙ Site visits 7.3: To what extent has the Bank ❙❙ Share of projects with an appropriate results successfully implemented a performance measurement framework, including clear targets measurement strategy which focuses on ❙❙ share of projects possessing appropriate baseline data the achievement of outputs, outcomes and impacts? ❙❙ Evidence of regular data collection against established results indicators 7.4: To what extent have lessons learned ❙❙ Extent to which evidence from PCRs/XSRs, Mid-term been identified and incorporated into reviews and evaluations have been incorporated into subsequent projects and CSPs? CSPs ❙❙ Evidence of incorporation of lessons learned into the design of new projects 7.5: How has the Bank worked with ❙❙ Conduct of a needs assessment to identify capacity the GRZ to enhance its own systems of challenges for results based management Results-Based Measurement? ❙❙ Implementation of regular dialogue or capacity development support to promote ongoing management for development results. 7.6: To what extent has the Bank identified, ❙❙ Evidence of identified implementation risks and monitored and addressed potential mitigation measures implementation risks? ❙❙ Evidence of ongoing risk monitoring

❙❙ Use of risk monitoring information to inform project Country Strategy Evaluation design and implementation Judgement Criteria and Rationale A final rating will be provided at the country level based on an assessment of the extent to which the Bank has successfully An IDEV implemented a rigorous performance measurement regime and used this information to manage risks, guide implementation and inform the development of new projects and country strategies. In addition, this assessment will involve an examination of the Bank's efforts to develop capacity for results based management within Zambia. A global rating will be provided based on a 6-point scale ranging from Highly Satisfactory to Highly Unsatisfactory based on a triangulation of evidence from project documents, interviews and site visits. 90 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex D — Theory of Change for the Bank's Assistance to Zambia (2002-2015)

Activities / Outputs Immediate Outcomes

Construction of roads, bridges and border crossings Reduced travel times and VOC Construction of Power stations, sub-stations Improved road networks and safety and transmission lines Increased traffic throughput Implementation of ESMP Increased energy generation Provision of Technical Assistance

Creation of out-grower schemes, market schemes and farmer groups Increased access to markets Provision of training to farmers Increased use of improved irrigation systems Implementation of improved irrigation technologies Increased land under cultivation Establishment of new farm blocks

Rehabilitation of TVET Facilities Enhanced quality of TVET Provision of Training for Educators Increased TVET enrollment

Provisions of loans to SMEs Increased SME lending Development of an open cast mine and supporting Increased profitability and business expansion infrastructure Increased availability of financial products for SMEs Technical Assistance to FIs Job creation Provision of LOC and PCGF to FIs Improved terms of finance

Implementation of new systems (IFMIS, TSA and IPPD2) Improved commitment controls New legislation developed Reduced wage expenditure Strengthened accountability functions Development of DACF and Local Government Service Increased financial and administrative decentralization Construction of schools and hospitals Reduced time and cost to start a business Regulatory Reforms for Private Sector Reduced time to import and export

Water points and sanitation facilities constructed Increased access to improved WSS sources Hygiene promotion training Increased volumes of treated water Establishment of community management groups and public utilities Increased reliability of water services Rehabilitation of water treatment and sewerage Reduced unaccounted for water infrastructure Annexes 91

Intermediate Outcomes Strategic Outcomes

Increased regional trade

Increased access to social services

Increased energy connections

Increased reliability of power supply Improved Agricultural Productivity, Trade

and Diversification INCLUSIVE AND SUSTAINABLE GROWTH

Increased incomes

Increased agricultural productivity Increased Access to Basic Services

Reduction of skills gaps Creation of an Enabling Business Environment Increased business development Country Strategy Evaluation

Increased government revenues Transparent and Accountable Public Financial Management

Increased access to finance An IDEV

Reduced debt and expenditure variance

Reduced urban /rural gaps in service delivery

Increased business development

Reduced disease burden Private Sector and Finance

Social Sector Increased use and maintenance of WSS facilities Power and Transport

Agriculture

Multi-Sector

Water Supply and Sanitation 92 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex E — List of Documents Consulted

African Development Bank Group (1999) "Bank Group Policy on Good Governance." African Development Bank Group (2002) "African Development Bank Group Strategic Plan 2003-2007." African Development Bank Group (2003) "Zambia - Central Province Eight Centers Water Supply and Sanitation Project - Appraisal Report. African Development Bank Group (2004a) "Multinational - Project to Support the Lake Tanganyika Integrated Regional Development Program – PRODAP (Project Appraisal Report)." African Development Bank Group (2004b) "Multinational Program: Proposal for Financial Support for Statistical Capacity Building for Regional Member Countries under the International Comparison Program for Africa." African Development Bank Group (2004c) "Multinational Proposal for an ADF Grant of UA 5 million to Fund to African Virtual University Support Project." African Development Bank Group (2005) "Zambia - Humanitarian Emergency Assistance to the 2005 Drought- Affected Communities (Proposal)." African Development Bank Group (2005) "Zambia 2005 Country Portfolio Performance Review." African Development Bank Group (2006a) "Document de stratégie pays 2002-2004 mise à jour 2006." African Development Bank Group (2006b) "Poverty Reduction Budget Support (PRBS) Appraisal Report." African Development Bank Group (2006c) "Investment Proposal of USD 43,000,000 to the Lumwana Copper Project. African Development Bank Group (2006d) "Zambia: The National Rural Water Supply and Sanitation Program - Appraisal Report." African Development Bank Group (2006e) "African Development Bank, Government of the Republic of Zambia, Zambia: Small-Scale Irrigation Project (SIP): Mid-Term Review Mission - 14TH – 25TH May 2007 (Aide Memoire)." African Development Bank Group (2006f) "Southern African Development Community (SADC) Region: The Strengthening Institutions for Risk Management of Transboundary Animal Diseases (TADs)." African Development Bank group (2006g) "Zambia - Lumwana Copper Mine - Investment Proposal of USD 43,000,000 to the Lumwana Copper Project." African Development Bank Group (2006h) "Multinational - Proposal for an ADF Grant of UA 5,660,000 to fund the Enhancing Procurement Reforms and Capacity Project." African Development Bank Group (2007a) "Joint Assistance Strategy for Zambia (2007-2010)." African Development Bank Group (2007b) "Zambia: Small-Scale Irrigation Project (SIP) Mid-Term Review Mission (14TH – 25TH May 2007) (aide memoire)." African Development Bank Group (2008a) "Zambia: The Nkana Water Supply and Sanitation Project - Appraisal Report." African Development Bank Group (2008b) "African Development Bank Group Medium Term Strategy 2008-2012." African Development Bank Group (2008c) "Project Completion Report: Poverty Reduction Budget Support." African Development Bank Group (2008d) "Second Poverty Reduction Budget Support (PRBS II) Appraisal Report." African Development Bank Group (2008e) "Strategy Update for the Bank's Private Sector Operations." Annexes 93

African Development Bank Group (2008f) "Zambia - Proposal for a Line of Credit of USD 10 Million and a Partial credit Guarantee Facility of USD 8 million to Zambia National Commercial Bank." African Development Bank Group (2008g) "Zambia: Proposal for USD 3.5 Million LOC to Investrust PLC." African Development Bank Group (2008h) "Zambia: Emergency Humanitarian Food Assistance to Flood Victims (Appraisal Report)." African Development Bank Group (2009a) "Back to Office Report: Mission to Zambia - Supervision Mission of the Lumwana Mining Project." African Development Bank Group (2009b) "Guarantee Agreement between the African Development Bank Group, USAID and Zambia National Commercial Bank." African Development Bank Group (2009c) "Aide Memoire: Budget Support Dialogue and Identification of PRBS III Mission." African Development Bank Group (2009d) "BTOR of Poverty Reduction Budget Support Review and Identification of PRBS III Mission." African Development Bank Group (2009e) "Enabling Water Management for Increased Productivity and Resilience among Traditional Farmers in Zambia (Project Appraisal Report)." African Development Bank Group (2009f) "BTOR: Mission to Zambia - Supervision of Lumwana Mining Project." African Development Bank Group (2009g) "Letter of Agreement - Fund for African Private Sector Assistance - Grant for Pulse Financial Services Ltd." African Development Bank Group (2010a) "BTOR of Third Poverty Reduction Budget Support Appraisal Mission." African Development Bank Group (2010b) "Second Poverty Reduction Budget Support (PRBS II) Project Completion Report." African Development Bank Group (2010c) "Third Poverty Reduction Budget Support (PRBS III) Appraisal Report." African Development Bank Group (2010d) "Aide Memoire: AfDB Mission on Appraisal of a Poverty Reduction Budget Support program (PRBS III)." Country Strategy Evaluation African Development Bank Group (2010e) "BTOR of Zambia PRBS 2009 PAF Annual Assessment Review."

African Development Bank Group (2010f) "Fund for African Private Sector Assistance - Letter of Agreement between An IDEV African Development Bank Group and African Training a Management Services Foundation." African Development Bank Group (2010g) "Zambia - Extended Supervision Report on the Lumwana Copper Mining Project." African Development Bank Group (2010h) "Inter-office Memorandum- Line of Credit Agreement between the African Development Bank Group and Zambia National Commercial Bank." African Development Bank Group (2010i) "Multinational - The Nacala Road Corridor Project – Phase II" (Project Appraisal Report). African Development Bank Group (2010j) "Zambia - Nacala Road Corridor-Phase II: Environmental and Social Impact Assessment Summary." African Development Bank Group (2010k) "Zambia - Humanitarian Emergency Assistance to 2009/2010 Flood Mitigation (Request for Grant)." African Development Bank Group (2010l) "Zambia Country Portfolio Performance Review." African Development Bank Group (2010m) "XSR on the Lumwana Copper Mining Project." 94 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

African Development Bank Group (2011a) "Back to Office Report - Investrust Bank Line of Credit and Technical Assistance." African Development Bank Group (2011b) "Republic of Zambia 2011-2015 Country Strategy Paper." African Development Bank Group (2011c) "Country Strategy Paper for Zambia 2011-2015." African Development Bank Group (2011d) Multinational: Kazungula Bridge Project (Environmental and Social Impact Assessment Summary). African Development Bank Group (2011e) "Multinational - Republic of Zambia and Republic of Botswana - Kazungula Bridge Project" (SADC North-South Transport Corridor Improvement) (Project Appraisal Report). African Development Bank Group (2011f) "Fourth Poverty Reduction Budget Support - Project Appraisal Report." African Development Bank Group (2012a) "Third Poverty Reduction Budget Support (PRBS III) Project Completion Report." African Development Bank Group (2012b) "Bank Group Policy on Policy Based Operations." African Development Bank Group (2012c) "Back to Office Report - Supervision Mission on the Line of Credit of 3.5 Million Dollars Extended to Investrust Bank." African Development Bank Group (2012d) "Project Concept Note - Africa SME Program." African Development Bank Group (2012e) "FAPA Project Status Report - August 2012." African Development Bank Group (2012f) "FAPA Project Status Report - March 2012." African Development Bank Group (2012g) "Development of Operational Guidelines for Investments in Multipurpose Small Dams (Appraisal Report)." African Development Bank Group (2012h) "Zambia - Community Water Management Improvement Project (Farmers Clubs) for Traditional Farmers in Mkushi, Kapiri Mposhi, Masaiti and Chingola Districts (Aide Memoire Supervision Mission: 6 to 10 March 2012)". African Development Bank Group (2012g) "Working Paper Series - Bank Financing to Small and Medium Enterprises in East Africa - Findings of a Survey in Kenya, Tanzania, Uganda and Zambia." African Development Bank Group (2012h) "Itezhi-Tezhi Power Project - Summary of the Environmental and Social Impact Assessment." African Development Bank Group (2012i) "Itezhi-Tezhi Hydropower and Transmission Line Project - Appraisal Report." African Development Bank Group (2012j) "Zambia - Poverty Reduction Budget Support Program PRBS IV Back to Office Report." African Development Bank Group (2012k) "Nacala Corridor Environmental Management Plan." African Development Bank Group (2013a) "Back to Office Report - Supervision Mission on the Line of Credit of 3.5 Million Dollars Extended to Investrust Bank." African Development Bank Group (2013b) "Extended Supervision Report - Investrust." African Development Bank Group (2013c) "ADOA Rating, Africa SME Program." African Development Bank Group (2013d) "Private Sector Development Policy." African Development Bank Group (2013e) "Ten Year Strategy for the African Development Bank Group." African Development Bank Group (2013f) Multinational (Malawi/ Zambia) "Nacala Road Corridor Development Project- Phase IV" (Project Appraisal Report). African Development Bank Group (2013g) "ZAMBIA Central Province 8 Centers Water Supply and Sanitation - PCR". Annexes 95

African Development Bank Group (2013h) "Zambia - Livestock Infrastructure Support Project - LISP (Project Preparation Facility)." African Development Bank Group (2013i) "Zambia: Strengthening Climate Resilience in the Kafue Sub-Basin." African Development Bank Group (2013j) "Zambia: Livestock Infrastructure Support Project (LISP) - Project Preparation Facility (PPF)." African Development Bank Group (2013k) "Zambia - Combined 2011-2015 Country Strategy Paper Mid-Term Review and Country Portfolio Performance Review." African Development Bank Group (2013l) "Zambia Maamba Collieries Power Generation project - Senior Loan of USD 150 million." African Development Bank Group (2013m) "Disbursement Letter - Support to Science and Technology Education Project." African Development Bank Group (2013n) "Support to Science and Technology Education Project -Appraisal Report." African Development Bank Group (2013o) "Readiness Review - SSTEP." African Development Bank Group (2013p) "Development Effectiveness Review - Zambia." African Development Bank Group (2014a) "Inter-office Memorandum - Line of Credit to CETZAM Financial Services: Fulfilment of Conditions Precedent to First Disbursement." African Development Bank Group (2014b) "Project Status Report - CETZAM Financial Services 03/31/2014." African Development Bank Group (2014c) "Project Status Report - CETZAM Financial Services 11/14/2014." African Development Bank Group (2014d) "Inter-office Memorandum - Satisfaction of Conditions Precedent and Legal Clearance for Disbursement." African Development Bank Group (2014e) "Line of Credit Agreement between African Development Bank Group and CETZAM Financial Services." African Development Bank Group (2014f) "Board Credit Risk Memorandum - CETZAM Financial Services." African Development Bank Group (2014g) "African Development Bank Group Financial Sector Development Policy Country Strategy Evaluation and Strategy."

African Development Bank Group (2014j) "2013-2017 Private Sector Development Strategy." An IDEV African Development Bank Group (2014i) "Project Completion Report for Technical Assistance Operations - Enhancing Zambian SMEs Competitiveness and Access to Finance." African Development Bank Group (2014j) "Back to Office Report - ZANACO Line of Credit." African Development Bank Group (2014k) "Nacala Road Corridor Project - Phase II" (Implementation Progress and Results Report 11/11/2014). African Development Bank Group (2014l) "Multinational: Kazungula Bridge Project" (Supervision Mission 13-17 October 2014 - Back to Office Report). African Development Bank Group (2014m) "Zambia - Transforming Rural Livelihoods in Western Zambia – (NRWSSP) Phase II - Project Appraisal Report." African Development Bank Group (2014n) Project to Support Lake Tanganyika Integrated Regional Development Program – PRODAP (Implementation Progress and Results Report 17/01/2014). African Development Bank Group (2014o) "Zambia - Agriculture Productivity and Market Enhancement Project (GAFSP Grant Proposal)." 96 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

African Development Bank Group (2014p) "Zambia - Lake Tanganyika Development Project (Project Appraisal Report)." African Development Bank Group (2014q) "Zambia: Small-Scale Irrigation Project (SIP): 2014 Updated Baseline Survey, Ministry of Agriculture and Cooperatives, Government of the Republic of Zambia." African Development Bank Group (2014r) "Finnish Financed Small Scale Irrigation Project Supervision Mission 1-5 December 2014 (Back to Office Report)." African Development Bank Group (2014s) "Zambia - Agriculture Productivity and Market Enhancement Project (APMEP) (Project Appraisal Report)." African Development Bank Group (2014t) "Development of Operational Guidelines for Investments in Multipurpose Small Dams (Implementation Progress and Results Report - IPR)." African Development Bank Group (2014u) "Multinational - Zambia and Zimbabwe Kariba Dam Rehabilitation Project - Appraisal Report." African Development Bank Group (2014v) "Zambia - Fourth Poverty Reduction Budget Support PCR.” African Development Bank Group (2014w) "Zambia - PRBS IV Audit Comments." African Development Bank Group (2014x) "Nacala Road Corridor Project Phase II - BTOR." African Development Bank Group (2014y) "Zambia - Supervision of the National Rural Water Supply and Sanitation Program.'' African Development Bank Group (2015a) "Back to Office Report - ZANACO Line of Credit." African Development Bank Group (2015b) "Back-to-Office Report - CETZAM Financial Services." African Development Bank Group (2015c) "Credit Risk Committee Secretariat - CETZAM Lessons Learnt. African Development Bank Group (2015d) "Republic of Zambia 2016-2020 CSP - Draft Concept Note." African Development Bank Group (2015e) "African Economic Outlook - Zambia." African Development Bank Group (2015f) "PCR - Nkana Water Supply and Sanitation Project." African Development Bank Group (2015g) "Project to Support Lake Tanganyika Integrated Regional Development Program – PRODAP (Project Completion Report)." African Development Bank Group (2015h) "Zambia - 2011-2015 CSP Completion Report." African Development Bank Group (2015i) "ITT Power Generation and Transmission Project - Supervision Mission 25 May-06 June - Aide Memoire." African Development Bank Group (2015j) "Back to Office Report - ITT Power Generation and Transmission Project." African Development Bank Group (2015k) "Evaluation of the Small-scale Irrigation Project." African Development Bank Group (2016a) "Draft - XSR - Line of Credit to ZANACO PLC." African Development Bank Group (2016b) "Back to Office Report - Zambia Kariba Dam Rehabilitation Project, ITT Power Project - December 2015." African Development Bank Group (2016c) "Zambia 2016-2020 Country Strategy Paper and 2015 Country Portfolio Performance Review - Draft Concept Paper." African Health Workforce Observatory (2010) "HRH Factsheet - Zambia." Africa Oil and Power (2016) "Power Privatization Series - Zambia Case Study." African Training and Management Services (2011) "Enhancing Zambian Small and Medium Enterprises Competitiveness and Access to Finance (2010-2012) - Biannual Progress Report)." Barrick Gold Corporation (2012) "Responsibility Report - 2012." Annexes 97

Barrick Gold Corporation (2013) "Annual Report - 2012." Barrick Gold Corporation (2013) "Responsibility Report - 2013." Barrick Gold Corporation (2014) "Annual Report - 2013." Barrick Gold Corporation (2014) "Responsibility Report - 2014." Barrick Gold Corporation (2015) "Annual Report - 2014." Barrick Gold Corporation (2016) "Annual Report - 2015." CETZAM Financial Services Plc (2014) "CETZAM Framework for Environmental and Social Management." CETZAM Financial Services Plc (2015) "Summary of Utilization of AFDB LOC." Department for International Development (2015) "Project Completion Report - Growth and Poverty Reduction Grant - Zambia." Desjardins Développement International (2013) Impact Assessment of EFC Zambia." Development Assistance from People to People (2011a) "Community Water Management and Improvement for Traditional Farmers Project in Chingola, Kapiri Mposhi, Masaiti and Mkushi Districts - Annual Report 2011." Development Assistance from People to People (2011b) "Value Chain Analysis and an Analysis of Selected Opportunities for Community Water Management Improvement Project for Traditional Farmers in Mkushi, Kapiri Mposhi, Masaiti and Chingola districts." Development Assistance from People to People (2011c) "Report on Baseline Study for Community Water Management and Improvement for Traditional Farmers Project in Chingola, Kapiri Mposhi, Masaiti and Mkushi Districts." Development Assistance from People to People (2011d) "Community Water Management and Improvement for Traditional Farmers Project in Chingola, Kapiri Mposhi, Masaiti and Mkushi Districts. Annual Report 2011." Development Assistance from People to People (2012a) "DAPP Farmers' Club: Northern Success Stories." Development Assistance from People to People (2012b) "Community Water Management and Improvement for Traditional Farmers Project in Chingola, Kapiri Mposhi, Masaiti and Mkushi Districts - Annual Report 2012." Development Assistance from People to People (2013) "Community Water Management and Improvement for Country Strategy Evaluation Traditional Farmers Project in Chingola, Kapiri Mposhi, Masaiti and Mkushi Districts - Annual Report 2013."

Development Assistance from People to People (2014) "The Community Water Management Improvement Project An IDEV for Traditional Farmers in Mkushi, Kapiri Mposhi, Masaiti and Chingola Districts (Project Completion Report)." Finscope (2015) "Finscope Zambia 2015." FSDP Secretariat, Bank of Zambia (2010) "Finscope Zambia Survey 2009." FSDP Secretariat, Bank of Zambia (2015) "Finscope Zambia Survey 2015." Government of the Republic of Zambia (2005) "Zambia Public Financial Management Performance Report and Performance Indicators - PEMFA Program Evaluation." Government of the Republic of Zambia (2006a) "Fifth National Development Plan 2006-2010: Broad-based Wealth and Job Creation through Citizenry Participation and Technological Advancement." Government of the Republic of Zambia (2006b) "Vision 2030 for Zambia: A Prosperous Middle-Income Country by 2030." Government of the Republic of Zambia Ministry of Finance and Economic Planning (2006) "Fifth National Development Plan 2006-2010." Government of the Republic of Zambia Ministry of Commerce, Trade and Industry (2007) "Zambia Commercial, Trade and Industrial Policy." 98 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Government of the Republic of Zambia Ministry of Commerce, Trade and Industry (2008a) "Micro, Small and Medium Enterprise Development Policy." Government of the Republic of Zambia (2008b) "Letter of Development Policy." Government of the Republic of Zambia (2008c) "Zambia Public Financial Management Performance Report and Performance Indicators - PEMFA Program Evaluation Assessment and Update." Government of the Republic of Zambia (2008d) "Annual Report of the Roads Development Agency 2007." Government of the Republic of Zambia (2009) "Annual Report of the Roads Development Agency 2008." Government of the Republic of Zambia (2010a) "Public Expenditure Management and Financial Accountability Program Evaluation - Overview Report. Government of the Republic of Zambia (2010b) "Final Report on the 2009 Performance Assessment Framework" Government of the Republic of Zambia - Ministry of Finance and National Planning (2011a) "Sixth National Development Plan 2011-2015." Government of the Republic of Zambia - Ministry of Finance and National Planning (2011b) "Letter of Development Policy - Fourth Poverty Reduction Budget Support Loan." Government of the Republic of Zambia (2012a) "Zambia Public Financial Management Performance Report and Performance Indicators - PEMFA Program Evaluation Assessment and Update." Government of the Republic of Zambia - Ministry of Finance and National Planning (2012b) "Joint Assistance Strategy for Zambia (2011-2015)." Government of the Republic of Zambia (2013) "Public Expenditure Management and Financial Accountability Program Exit Report." Government of the Republic of Zambia Ministry of Agriculture and Livestock (2014a) "Small Scale Irrigation Project: Socio-Economic Impact of SIP on Beneficiaries (Case Study of Buleya Malima Irrigation Scheme)." Government of the Republic of Zambia - Ministry of Health (2014b) "2013-2014 Demographic and Health Survey." Government of the Republic of Zambia - Zambia Development Agency (2015a) "Zambian Mining Sector Profile." Government of the Republic of Zambia - Ministry of Finance and National Planning (2015b) "PRBS Performance Assessment Framework for 2012-2014." Government of the Republic of Zambia - Zambia Energy Regulation Board (2015c) "Statement on electricity Tariff Adjustments." Indaba Agricultural Policy Research Institute (2015d) "Status of Smallholder Crop Diversification in Zambia." International Council for Mines and Minerals (2012) "Enhancing Mining's Contribution to the Zambian Economy and Society." International Growth Centre (2012) "Zambia Regional Integration Policy Challenges." International Hydropower Association (2014) "Country Profile - Zambia." International Labor Organization (2007) "Expand Your Business Program - Training Manual for Growth-Oriented Enterprises." International Labor Organization (2012) "Final Evaluation Report - Zambia SME Support Project - Enhancing Zambian SMEs Competitiveness and Access to Finance." International Trade Centre (2010) "ITC Facilitates Access to Finance Program for Zambian SMEs." Investrust Bank PLC (2014) "Annual Report and Financial Statements - FY 2013." Annexes 99

Investrust Bank PLC (2010) "Memorandum - fulfilment of conditions precedent." International Monetary Fund (2015) "Report on Article Four Consultation in Zambia 2015." IOB (2003) "Results of International Debt Relief (1990-1999)." Itezhi-Tezhi Power Corporation (2015) "Status Report - ITT Power Project." Moore Stephens (2014) "Audit of Financial Statements and Ex-Post Procurement Review of the Project Entitled Community Water Management Improvement Project for Traditional Farmers in Mkushi, Kapiri Mposhi, Masaiti and Chingola districts." NEPAD Infrastructure Project Preparation Facility (IPPF) 2009. Multinational – Mozambique / Malawi / Zambia Nacala Road Corridor Studies. Norad (2011) "Joint Evaluation of Support to Anti-Corruption Efforts (2002-2009)." OECD (2002) "DAC JV for Procurement Country Pilot Program Zambia - Assessment of Public Procurement System." OECD (2007) "OECD-DAC JV for Procurement Country Pilot Program - Zambia Assessment of Public Procurement Systems." OECD (2010) "Evaluation of the Joint Assistance Strategy for Zambia." OECD (2012) "Between High Expectations and Reality - An Evaluation of Budget Support in Zambia." Oxford Policy Management (2010) "Agriculture Case Study: Evaluation of Budget Support in Zambia." Transparency International (2012) "UN Convention against Corruption Civil Society Review: Zambia 2012." Transparency International (2015) "Corruption Perceptions Index 2015." United Nations Conference on Trade and Development (2014) "Challenges and Opportunities Facing Landlocked Countries - Zambia." UNDP (2013) "Millennium Development Goals (MDG) Report for Zambia - 2013." World Bank Group (2009) "Doing Business 2008." World Bank Group (2010) "Doing Business 2009." World Bank Group (2010a) "The Profile and Productivity of Zambian Enterprises." Country Strategy Evaluation World Bank Group (2011) "Doing Business 2010."

World Bank Group (2012) "Zambia Poverty Assessment - Stagnant Poverty and Inequality in a Natural Resource- An IDEV based Economy." World Bank Group (2015a) "Doing Business 2014." World Bank Group (2015b) "Zambia Country Program Evaluation FY04-13." World Bank Group (2015c) "Zambia Economic Brief - Powering the Zambian Economy." Zambia Extractive Industries Transparency Initiative Council (2012) "Reconciliation Report for the Year 2011." Zambia Extractive Industries Transparency Initiative Council (2013) "Reconciliation Report for the Year 2012." Zambia Extractive Industries Transparency Initiative (2014) "Reconciliation Report for the Year 2013." Zambia National Farmers Union (2010) "Agricultural Productivity in Zambia: Has there been Progress?" ZANACO PLC (2013) Line of Credit Development Outcome Template - October 2013. ZANACO PLC (2014) Line of Credit Development Outcome Template - December 2014. ZANACO PLC (2015) Line of Credit Development Outcome Template - March 2015. ZANACO PLC (2012) "Environmental and Social Management Policy - Version 2.0." ZANACO PLC (2014) "AfDB Report - Use of the Partial Credit Guarantee Facility." 100 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex F — Organizations Engaged - Stakeholder Interviews

In keeping with evaluation best practices as well as the agreement reached between the evaluation team and individual stakeholders, it is not possible to provide identifying information about interviewees. The table below provides an indication of the number of interviewees engaged from various organizations.

Organization or Stakeholder Group Number of Stakeholders Engaged African Development Bank Group 18 Agence Française de Développement / Proparco 1 African Management Services 1 CETZAM Financial Services 1 Development Assistance from People to People 2 Development Bank of Southern Africa (DBSA) 2 Department for International Development (DfID) 1 European Investment Bank (EIB) 4 European Union 1 Food and Agriculture Organization of the UN (FAO) 1 Indaba Agricultural Policy Research Institute 1 International Finance Corporation (IFC) 2 International Fund for Agricultural Development (IFAD) 1 International Growth Centre 1 International Labor Organization (ILO) 1 International Monetary Fund (IMF) 1 Investrust Merchant Bank 2 Itezhi-Tezhi Power Corporation (ITPC) 1 Japan International Cooperation Agency (JICA) 2 KfW Benkengruppe 1 Lumwana Mining Company / Barrick Gold Corporation 7 National Water Supply and Sanitation Council (NWASCO) 2 Nkana Water and Sewerage Company 11 United States Agency for International Development (USAID) 1 World Bank 1 ZANACO Plc 3 Zambia Institute for Policy Analysis and Research (ZIPAR) 1 ZESCO 3 Other Civil Society 1 Project Contractors 6 Other Private Sector 4 Project Beneficiaries 31 District Council Officials 7 Government of the Republic of Zambia - Ministry of Agriculture and Livestock 2 Government of the Republic of Zambia - Central Statistics Office 4 Annexes 101

Organization or Stakeholder Group Number of Stakeholders Engaged Government of the Republic of Zambia - Ministry of Education, Science, Vocational Training and 4 Early Education Government of the Republic of Zambia - Ministry of Energy 5 Government of the Republic of Zambia - Energy Regulation Board 6 Government of the Republic of Zambia - Ministry of Finance and National Planning 3 Government of the Republic of Zambia - Ministry of Fisheries 3 Government of the Republic of Zambia - Ministry of Health 1 Government of the Republic of Zambia - Ministry of Mines and Minerals 3 Government of the Republic of Zambia - Office of the Auditor General 3 Government of the Republic of Zambia - Office for the Promotion of Private Power Investment 1 Government of the Republic of Zambia - Roads Development Agency 5 Government of the Republic of Zambia - Zambia Development Agency 2 Government of the Republic of Zambia - Zambia Public Procurement Authority 2 Government of the Republic of Zambia - Zambia Revenue Authority 9 Total 176 Country Strategy Evaluation An IDEV 102 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Annex G — Alignment of the Bank's CSPs with National Development Strategies

BANK STRATEGY NATIONAL DEVELOPMENT PLANS COUNTRY STRATEGY PAPER (2002-2004) POVERTY REDUCTION STRATEGY PAPER (2002) Strategic Objective: Strategic Objective: Poverty reduction through economic growth and social service Poverty reduction and broad-based economic growth delivery Areas of Emphasis: Areas of Emphasis: ❙❙ Diversification of production and exports through support to the ❙❙ Strengthening and climate-proofing agricultural infrastructure agricultural sector ❙❙ Increasing access to safe water and sanitation ❙❙ Improved delivery of basic social services ❙❙ Increasing access to health and education services, particularly ❙❙ Crosscutting emphasis on HIV/AIDS and gender for vulnerable children ❙❙ Management of public debt ❙❙ Decentralization of governance ZAMBIA JOINT ASSISTANCE STRATEGY (2007-2010) FIFTH NATIONAL DEVELOPMENT PLAN (2006-2010) Strategic Objective: Strategic Objective: Increased wellbeing of the Zambian population Broad-based wealth and job creation Areas of Emphasis: Areas of Emphasis: ❙❙ Strengthening of agricultural and water and sanitation ❙❙ Development of economic infrastructure in the agricultural infrastructure sector ❙❙ Development of regional transport corridors ❙❙ Human resources development ❙❙ Regional power interconnectivity ❙❙ Improved delivery of basic social services ❙❙ Promotion of domestic debt management ❙❙ Accountable and transparent public expenditure management ❙❙ Development of public procurement capacity ❙❙ Strengthening of accountability and transparency mechanisms COUNTRY STRATEGY PAPER (2011-2015) SIXTH NATIONAL DEVELOPMENT PLAN (2011-2015) Strategic Objective: Strategic Objective: Economic growth, diversification and poverty reduction Poverty reduction through economic growth and diversification Areas of Emphasis: Areas of Emphasis: ❙❙ Development and rehabilitation of national and regional ❙❙ Infrastructure development, including feeder roads, water transport infrastructure canals, access roads and power infrastructure ❙❙ Strengthening power generation capacity and national and ❙❙ Promotion of agri-business regional power connectivity ❙❙ Basic Service Delivery ❙❙ Increased capacity for efficiency, transparent and accountable public financial management ❙❙ Private sector regulatory reform ❙❙ Increased access to finance

Sources: The 2002 CSP and its update in 2006; the first Joint Assistance Strategy of Zambia 2007-10; and the 2011-15 CSP. Annexes 103

Annex H — Zambia's Progress against MDG Indicators

Progress Against Selected MDG Indicators Indicator 2006-2008 2010-2013 Target 2015 Likelihood Goal 1 - Eradicate Extreme Hunger and Poverty Proportion of population below USD 1 (PPP) per day 51.0 42.3 29.0 Unlikely (percent) Prevalence of underweight children (percent) 14.6 13.3 12.5 Likely Goal 2 - Achieve Universal Primary Education Net enrolment in primary education (percent) 97.0 93.7 100 Attention Required Primary Six Completion Rate (percent) N/A 90.9 100 Attention Required Literacy Rate 15-24 year-olds (percent) 70 89 100 Attention Required Goal 3 - Promote Gender Equality and Empower Women Ratio of females to males primary enrolment (girls per 0.97 0.99 1 Likely 100 boys) Ratio of females to males secondary enrolment 0.73 0.89 1 Attention Required (girls per 100 boys) Proportion of literate females to males (15-24) 0.8 0.87 1 Likely Goal 4 - Reduce Child Mortality Infant mortality rate (per 1000 live births) 119 138 63.6 Unlikely Under-five mortality rate (per 1000 live births) 70 76 35.7 Unlikely Goal 5 - Improve Maternal Health Maternal Mortality Rate (per 100,000 live births) 449 483 162 Unlikely Proportion of births attended by skilled health personnel 46 46.5 100 Unlikely (percent)

Goal 6 - Combat HIV/AIDS, Malaria and other Diseases Country Strategy Evaluation HIV Prevalence rate (percent) N/A 14.3 15.6 Met Population with advanced HIV infection with access to N/A 79 80 Likely ARVs An IDEV New malaria cases per 1000 individuals N/A 330 < 225 Attention Required Malaria fatality rate per 1000 individuals N/A 34 11 Attention Required Goal 7 - Ensure Environmental Sustainability Proportion of the population using an improved drinking 40 36.9 25.5 Unlikely water source (percent) Proportion of the population using an improved sanitation 36.1 percent 32.7 percent 87 percent Unlikely facility (percent) Goal 8 - Develop a Global Partnership for Development ODA (millions US$) 415 480 N/A 1 Latest data available during the specified period. Sources: African Development Bank 2012-2016 CSP and the 2010 UNDP / GRZ Millennium Development Goals Report. 104 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

Endnotes

1. OECD (2012) "Between High Expectations and Reality - An Evaluation of Budget Support in Zambia" pp. 50-52 2. Zambia Development Agency (2015) "Zambia Mining Sector Profile," p. 3. http://www.zda.org.zm/?q=content/ mining-sector 3. IOB (2003) "Results of International Debt Relief (1990-1999)," at 1-3; OECD (2012) p. 54 4. OECD 2012 p. 55 5. OECD 2012 p. 56 6. World Bank Group (2015c) "Zambia Economic Brief - Powering the Zambian Economy," p. 7 7. CIA World Fact Book 8. World Bank Group (2015) p. 7 9. OECD 2012 p. 56; CIA World Fact Book (2016) https://www.cia.gov/library/publications/the-world-factbook/ fields/2048.html 10. World Bank Group (2015) p. 10; World Bank Group (2016) "Macro Poverty Outlook for Zambia" 11. World Bank Group (2015) p. 7; OECD 2012 pp. 50-52. 12. World Bank Group (2015) p. 9 13. Ibid. p. 17 14. Ibid. p. 7 15. Ibid. p. 13 16. Data from the World Development Indicators. 17. Government of the Republic of Zambia - Ministry of Health (2014b) "2013-2014 Demographic and Health Survey" p. 2 18. Ibid. p. 7 19. Ibid. p. 14 20. Ibid. p. 2 21. World Bank Group (2012) "Zambia Poverty Assessment - Stagnant Poverty and Inequality in a Natural Resource- based Economy" p. 1 22. Data from World Development Indicators 23. World Bank Group (2012) p. 1 24. Ibid. p. 1; CIA World Fact Book 25. The International Growth Centre (2012) "Zambia Regional Integration Policy Challenges" p. 6 26. World Bank Group (2010b) "The Profile and Productivity of Zambian Businesses," p. 5 27. Ibid. p. 7 28. Ibid. p. 14 Annexes 105

29. Ibid. p. 10 30. African Development Bank Group (2012h) "Working Paper Series - Bank Financing to Small and Medium Enterprises in East Africa: Findings of a Survey in Kenya, Tanzania, Uganda and Zambia" p. 7 31. World Bank Group (2010b) p. 27 32. Data from World Integrated Trade Solution (WITS) 33. The evaluation has included one project approved in 2000, as it was not completed during the planned period but continued implementation through additional funding support and is now nearing completion. The portfolio has been updated with the four operations approved during 2015 to acknowledge the trend in priorities. 34. UNCTAD (2014) "Challenges and Opportunities Facing Landlocked Countries - Zambia," p. 12 http://unctad.org/ meetings/en/Presentation/aldc2014_16_ppt_Zambia.pdf 35. World Bank Group (2010b) p. 27 36. Output averages were assessed across completed projects with a value assessed for each output. Outcomes values were similarly assessed for each project and averaged for each sector. Each outcome for which targets were achieved was assessed a value of 1.0, whereas outcomes which were partially achieved were assessed a value of 0.5. Items for which limited progress was achieved were assessed a value of 0. 37. CETZAM Financial Services Plc (2015) "Summary of Utilization of AfDB LOC" 38. Zambia EITI Council (2012) "Zambia Extractive Industries Transparency Initiative - Reconciliation Report for the Year 2011" (See also 2012, 2013 and 2014 reports). 39. ZANACO PLC (2014) Line of Credit Development Outcome Template - December 2014; African Development Bank Group; African Development Bank Group (2013b) "Extended Supervision Report - Investrust"; African Development Bank Group (2010m) "XSR on the Lumwana Copper Mining Project" 40. Ibid. 41. Barrick Gold Corporation (2012) "2012 Responsibility Report" p. 73 42. International Council on Mines and Minerals (2012) "Enhancing Mining's Contribution to the Zambian Economy Country Strategy Evaluation and Society" p. 8

43. Barrick Gold Corporation (2016) "Annual Report 2015" An IDEV 44. ICMM (2012) p. 86 45. Ibid. p. 85 46. African Development Bank Group (2015j) "Back to Office Report - ITT Power Generation and Transmission Project." 47. Ibid. 48. African Development Bank Group (2015g) "Project to Support Lake Tanganyika Integrated Regional Development Program (PRODAP) - Project Completion Report." 49. DAPP (2014) "Project Completion Report – The Community Water Management Improvement Project for Traditional Farmers in Mkushi, Kapiri Mposhi, Masaiti and Chingola Districts" 50. Ibid. 51. Ibid. p. 15 106 Zambia: Evaluation of the Bank's Country Strategy and Program 2002–2015 - Summary Report

52. Assessment compiled against project triggers and outputs using information from: African Development Bank Group (2008c), (2009c), (2009d) and (2010b); and Government of the Republic of Zambia (2008d), (2010b) and (2011b). 53. Government of the Republic of Zambia (2010) "Final Report on the 2009 Performance Assessment Framework" 54. PEFA (2005) paragraphs 3.6.4-3.6.8. 55. Based on feedback from GRZ stakeholders. 56. PEFA 2008 at 3.4.33; PEFA (2012) p. 75. 57. PRBS III PCR p. DI 58. PRBS IV PCR p. DI 59. GoZ (2010) 2009-2010 PAF Report 60. PEFA 2008 paragraph 3.4.33; PEFA 2012 p. 75 61. African Development Bank (2015f) "Project Completion Report - Nkana Water Supply and Sanitation Project; African Development Bank (2013g) "Zambia - Central Province Eight Centers Water Supply and Sanitation Project - Project Completion Report; African Development Bank Group (2014) "Zambia - Supervision of the National Rural Water Supply and Sanitation Program - BTOR" 62. African Development Bank (2014k) "Nacala Road Corridor Project - Phase II - Implementation Progress and Results Report." 63. World Bank Group (2007) "Doing Business 2006;" World Bank Group (2015) "Doing Business 2014." 64. Data from World Development Indicators 65. International Labor Organization (2012) "Final Evaluation Report - Zambia SME Support Project - Enhancing Zambian SMEs Competitiveness and Access to Finance." 66. IMF Data. 67. CPIA World Bank. 68. International Hydropower Association (2014) "Country Profile - Zambia" https://www.hydropower.org/country- profiles/zambia 69. Africa Oil and Power (2016) " Power Privatization Series - Zambia Case Study" http://africaoilandpower.com/index. php/2016/05/16/power-privatization-series-zambia-case-study/ 70. Data from World Development Indicators "Access to electricity (percent population)" 71. African Health Workforce Observatory (2010) "HRH Factsheet - Zambia" http://www.hrh-observatory.afro.who.int/ en/country-monitoring/92-zambia.html 72. Data from World Development Indicators 73. Data from World Integrated Trade Service 74. Indaba Agricultural Policy Research Institute (2015) "Status of Smallholder Crop Diversification in Zambia" p. 4 75. Ibid p. 10 76. Oxford Policy Management (2010) "Agriculture Case Study: Evaluation of Budget Support in Zambia" at 176; Zambia National Farmers Union (2010) "Agricultural Productivity in Zambia: Has there been Progress?" p. 24 77. Government of Zambia (2015k) "Evaluation of the Small-scale Irrigation Project" Annexes 107

78. 2011-2015 CSP Completion Report, Table 1 79. African Development Bank Group (2013) "Development Effectiveness Review 2013 - Zambia" p.36. 80. Barrick Gold 2012 Annual Report; Barrick Gold 2015 Annual Report. 81. African Development Bank Group (2015b) "Back-to-Office Report - CETZAM Financial Services" 82. IMF (2015) "Zambia - Article IV Consultation" p. 9. 83. Zambia Energy Regulation Board (2015) "Statement on Electricity Tariff Adjustments." http://www.erb.org.zm/press/ statements/ElectricityTariffAdjudtment2015.pdf 84. Bloomberg News, February 17, 2016 " Zambia Plans to Re-visit Power Tariff Increase After Reversal." http://www. bloomberg.com/news/articles/2016-02-16/zambia-plans-to-revisit-power-tariff-increase-after-reversal 85. As confirmed by World Bank (2015) "Zambia Country Program Evaluation FY2004-13." 86. OECD 2012 p. 54 87. IMF (2015) p. 12 88. 2010 Aide Memoire of Annual Joint Supervision p. 7.3 89. Ibid. 90. Barrick Gold (2014b) "2013 Responsibility Report," p. 13. 91. Government of the Republic of Zambia (2012b) "Joint Assistance Strategy for Zambia ii (2011-2015). Country Strategy Evaluation An IDEV

in developmentprojects. more effortsarestillneededtoscaleupprivatesectorinitiativesandmainstreamgender important factorinthesustainabilityofprojects. However, theevaluationpointsoutthat the evaluationconfirmsthatpoliticalandgovernancerisksarebecominganincreasingly more coherent, adoptinganintegratedapproach todevelopmentchallenges. Moreover, development plansandtheBank'scomparativeadvantage, alsoitsportfoliohasbecome StrategyPapershavebeenwell-alignedwithbothnational that thedifferentCountry Evaluation of the Bank's Development Results. The assessment reveals, among others, StrategyPaperfor2016–2020; and (ii)tosupport IDEV's Comprehensive Zambia Country child welfare, etc. Itwasconductedfortwopurposes: (i)toinformthedevelopmentof transport, private sector development, access to water supply and sanitation, promotion of insomekeyareasincludingagriculture,country governance, infrastructuredevelopment, in Zambiaduringthe2002–2015periodanditscontributiontodevelopmentof This evaluationpresentstheperformanceof African DevelopmentBank’s assistance About thisEvaluation E-mail: [email protected] Phone: +22520 26 2041 Avenue Joseph Anoma, 01BP1387, Abidjan 01, Côted’Ivoire African DevelopmentBankGroup An IDEV idev.afdb.org Country Strategy EvaluationCountry

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