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Investment Learning Platform (ILP)

Investment Plans

An Investment Plan (IP) is a country-wide plan that maps the investments needed to achieve national development targets over a defined time frame. It is a strategic tool for policy implementation and the scope of coverage – from a narrow focus on productive agricultural activities to a broader scope including natural resources management, rural development and value addition, as well as food security and nutrition and social and health aspects – depends upon the country’s policy, institutional and geopolitical environment. IP is a generic term. The actual name of the plan in a particular country will reflect its scope and other national considerations. Names range from Country Investment Plan to National Agriculture and Food Security Investment Plan (NAFSIP) to National Investment Plan for the Rural Sector. IPs are developed and managed by governments in consultation and partnership with national stakeholders from the private sector and civil society. For an IP to be successfully implemented, all relevant stakeholders must be engaged in its development. Sector goals can only be achieved through a combination of public and private investment and IPs are an opportunity to forge greater synergies. IPs ideally should be anchored in country systems, structures and procedures, especially the budgeting process.

IPs were brought to prominence in the context of the Comprehensive Africa Agriculture Development Programme (CAADP) under the New Partnership for Africa's Development (NEAPD) of the African Union. This continent-wide agenda to transform Africa’s agriculture and stimulate growth, which included a commitment by each country to increase public resources for agriculture to ten percent of government spending in order to achieve a six percent average annual agriculture sector growth. In the context of CAADP, IPs are usually referred to as National Agriculture Investment Plans (NAIPs). While most prominent on the African continent, IPs have also been developed and are being implemented in some countries in other regions. An important driver for IP development has been the Global Agriculture and Food Security Program (GAFSP), a multilateral mechanism that has made incremental funding conditional on the existence of an IP in some FAO documents referred to as NAFSIP.

IPs can be a useful tool in the implementation of sector-wide approaches (see SWAps and for example promoting Climate Smart Agriculture (CSA) programmes integrating the three dimensions of sustainable development (economic, social and environmental).

IP: A programme, a plan or a framework?

IPs can have different forms, functions and structures depending upon the national context. An IP is not, normally a new development programme but should, rather add value to the existing planning and implementation processes through coordinating and harmonizing resources to accelerate implementation of existing/new initiatives.

Illustrative scenarios emerging from the IPs process include a) identification of priority investment programme areas, consisting of a number of programmes and projects financed through national budget allocation and external funding that combine different investment areas (such as research, irrigation, capacity development, etc.) into concrete packages contributing to sector goals; or b) IP ( at least in the context of the post CAADP NAIPs ) are mechanisms for screening priority investment areas with the goal of soliciting funds from the private sector and other sources to fill in the overall investment gap and, as a result, respond to the overall national development objectives

In practice, several variations are found in different countries, but in all cases IP development, implementation and revision should be mainstreamed into country planning systems – informing the medium-term expenditure framework (MTEF) and annual budgets for the sector ministries, as well as resource mobilization and prioritization of programmes financed by development partners.

A combination of public investment (ensured by the state) and private investment (realized by producers and other actors in the value chains) will contribute to achieving the global objectives set out in the IP. IP budgets must include an estimate of the required public funds – whether from the general budget or as specific, possibly externally funded, projects. Further, including an estimate of the contribution made by private investment will help to gain a global vision of the levels of investment required to achieve agriculture sector objectives. Progressively the IPs need to expand the role and contribution of the private sector in accelerating growth and transformation

The sectoral scope of the IP depends upon the country’s policy and institutional set-up. There is no hard and fast rule as to how narrowly or widely to define the “agriculture sector” – it depends upon the policy and institutional environment of the country. What is important is that in any given country or context the scope is clear and consistent with regard to the breadth of analytical work to be pursued, the range of organizations and stakeholders that are engaged, and the prioritization that leads to an IP and/or sector approach. The agriculture sector focuses on crop livestock, fisheries and aquaculture production. The scope can be further broadened to include the management of natural resources, (such as forests and water), rural development (including finance, infrastructure and social services), value addition (processing, marketing and retail) and food security and nutrition. In all cases, cross- cutting aspects such as governance, climate change, gender and trade have to be considered.

The value added of an IP

A solid IP, validated and endorsed by the relevant stakeholders, can be a powerful tool to: 

  • enable country leaders to take charge of the investment planning, and the implementation and monitoring process, with greater national ownership;
  • increase clarity and transparency in priority-setting for public investments;
  • align key actors around a shared agenda for action;
  • ensure the leading role of the private sector in all of the IP processes
  • achieve greater consistency in interventions, highlighting gaps, complementarities and overlaps; 
  • align projects and programmes to the priorities expressed in the IP and to its overarching results;
  • promote convergence of domestic and external sources of funding and strategic use of scarce resources, and serve as a basis to mobilize additional resources based on a well-identified financing gap; and
  • provide a framework to assess progress and underpin mutual accountability.

It is important to note that the IP development process does not stop once the document has been endorsed, nor should it be a one-off exercise resulting in a document that is likely to stay on a shelf. The IP must be used to be useful and this requires an iterative process that continues through implementation, monitoring and evaluation (M&E), sector review, annual revision and update, with lessons learned throughout implementation. For that, stakeholders need to use IPs regularly to inform their actions and advocate for their use by other stakeholders and partners.

IP development and implementation must be clearly embedded in the existing policy frameworks and policy processes, the medium-term and annual budgetary frameworks, and governance and coordination mechanisms, with the aim to strengthen and complement, rather than replace, existing mechanisms. 

The quality of the IP 

Technically, an IP is of “good quality” when it effectively guides the national government and development partners to invest in areas and interventions that provide the highest return on investment and are economically and socially beneficial in pursuit of the country’s development goals. 

The quality of the IP will be measured in terms of the extent to which it was formulated with the participation of all relevant stakeholders, especially the private sector and the agriculture communities, the robust evidence-based analysis that underpins it and the catalytic role it plays to ensure timely achievement of the overall sectoral development goal. IPs must be based on a robust results framework linked to national development goals, as well to sustainable development goals. They must also demonstrate clear priority-setting between and within programmes, be costed – usually at output rather than detailed activity level – delineate implementation mechanisms and M&E processes and protocols, and include an indicative financing plan showing incremental and existing financing. IPs should also note outstanding sector policy issues and their implications. A Quality IP advocates, adherence to transparency when allocating or using land, strong compliance with the principles for responsible investment in agriculture, and with tenure of land and other productive resources.

Key design tasks

Using evidence-based analysis to inform the identification of investment priorities should contribute to producing better outcomes. Such analysis will inform the design of the IP and contribute to making it credible, robust and realistic. Diagnostic studies can assess agricultural sector performance and analyze main bottlenecks, challenges, opportunities and drivers for growth. Tools and approaches include: policy and sector analysis, Computerized General Equilibrium (CGE) modelling and Public Expenditure Reviews (PERs) [see Plan Strategically]. 

Once overall investment priorities are agreed upon, by the government the following key IP design tasks should be undertaken, using a transparent and inclusive process:

  • Determine the main features of the IP, in particular: (i) purpose – for coordination and alignment, for accountability, for actual planning, for resource mobilization, implementation or for a combination of these; and (ii) scope – delineation of the plan’s sectoral scope and the extent to which private as well as public investment should be captured. 
  • Formulate the results framework, setting overall results to which the IP contributes at the impact level (e.g. reducing poverty, addressing chronic malnutrition, producing economic growth and transformation for improved livelihoods) as well as specific results with result indicators and eventually target values at the outcome and output levels.
  • Define the architecture –programme areas, subprogramme areas and components – linked to the results framework, and identify responsible/accountable actors for each programme and subprogramme area. 
  • Undertake priority-setting on the basis of criteria agreed upon by consensus, in line with existing national development priorities that may be linked to economic prosperity as well as food security and nutrition, resilience and environmental sustainability. Geographical balance within the country must also be taken into account.
  • Integrate cross-cutting themes (e.g. climate change, nutrition, gender and risk) in relevant programme areas in the IP.
  • Prepare the budget, based on an estimated cost per component/output for each programme. Output-based costing is recommended at the IP level, as more specific activity-based costing will take place during the subsequent preparation of projects and programmes.  IP costing will help determine the financing gaps, which will assist in attracting IP investment and leveraging funding. The IP budget must be realistic and credible.
  • Conduct a financial and economic analysis (FEA) at IP level to help assess the potential benefit of the IP against the total investment costs. The choice of method and level of detail will depend upon data availability. An FEA at the IP level only aims to capture a broad indication of whether expected returns can justify the planned expenditure; the methodology therefore differs from the more detailed FEA applied at investment project level. 
  • Design an M&E system for the IP coherent with the IP Results Framework. This is an integral section of the IP document. Designing the M&E system should be done in close partnership with all IP stakeholders, to ensure that the objectives and M&E institutional roles are well understood and shared. Regular monitoring of achievement against initial objectives and costs is essential.
  • Conduct a risk analysis, identifying the risks that could affect the progress or success of IP implementation and highlighting the most critical risks and relevant mitigation strategies in the plan write-up. 

Process matters: ensuring multi-stakeholder buy-in

IPs are developed and managed by governments, usually under the lead of the Ministry of Agriculture or the Ministry of Planning, in consultation with national stakeholders, including the private sector, farmers’ organizations, civil society, teaching and research institutes, chambers of commerce and other relevant actors. In CAADP and in the context of GAFSP, for example, multi-stakeholder governance and consultation processes are a requirement for IP development and endorsement.

The range of ministries involved – such as Agriculture, Public Works, Finance, Planning, Trade, etc. – will depend on the policy framework to be implemented through the IP and on how the sector is structured. Effective mobilization and coordination of all sector and subsector actors at central and decentralized levels, and a reflection and recognition of their contributions is critical to provide the foundation for successful IP implementation.

While development of an IP is a nationally owned exercise (partnership of public and private investors), it should be undertaken in collaboration with development partners. This is to ensure a common understanding of national investment priorities and needs in order to maximize opportunities for harmonized and predictable support to address financing gaps identified in the plan.

When IPs are formulated through a process that includes various national stakeholder groups, with strong ownership and leadership by national government, it is likely that more credible and effective plans will be produced, even though more time and resources may be required than if the formulation work is largely delegated to external experts. The experience of the Food and Agriculture Organization of the United Nations (FAO) suggests that 12-18 months may be needed to prepare an IP through an effective and inclusive process.

It is essential to establish a clear institutional set-up and coordination mechanisms that specify roles, responsibilities and accountabilities of the various actors involved. Leadership from one ministry at a level that is sufficiently senior to rally diverse stakeholders is necessary to move the process forward and avoid excessive fragmentation. Implementation experience in CAADP has shown that high level national commitment, even beyond the specific sector lead ministries and including representatives of the private sector, is required to make these multidisciplinary and multi-stakeholder processes a success and to translate commitments into results on the ground.

Key Resources

CAADP Country Implementation Guide: A Guide for Implementers

Guidance for country stakeholders on steps and considerations for national implementation of CAADP, including NAIP development.

Implementation Strategy and Roadmap to Achieve the 2025 vision of CAADP (2015)

Operationalizes the 2014 Malabo Declaration on Accelerated African Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihood.

Country Investment Plans in Agriculture: Lessons from early experience, FAO Investment Centre Learning Note (FAO, 2012)

Comparative analysis of the preparation processes and the outcomes of investment plan formulation in Bangladesh, Ethiopia and Tanzania.

The CAADP Results Framework (2015-2025) (NEPAD, 2015)

Includes indicators accompanied by baseline data and targets. The framework provides standardised tools which can be used by CAADP stakeholders to measure agricultural performance and progress.

Strengthening Systemic Capacities for the Formulation and Management of National Agriculture Investment Plans (FAO, 2014)

Modular guidance and learning materials to facilitate NAIP development. Includes guidance on process, results-based management, results framework development and programme definition, costing, monitoring and evaluation and capacity development for investment planning.