KARACHI: The Asian Development Bank’s Independent Evaluation Department (IED) has released a report evaluating the performance of the Technical Assistance (TA) project. The project was aimed at operationalizing Pakistan’s Export-Import Bank of Pakistan (EXIMBP). Unfortunately, the evaluation of TA fell short in terms of relevance, effectiveness, and overall success.
The Government of Pakistan identified that inadequate trade facilitation, infrastructure, and financial support systems were limiting the growth and diversification of its export trade, hindering long-term economic growth. Trade financing was primarily handled by local commercial banks, which preferred larger clients and neglected small and medium-sized enterprises (SMEs). Limited access to trade finance, characterized by short repayment periods and collateral requirements, disadvantaged SMEs and other exporters compared to international competitors who could access financial support from their own export credit agencies.
To address these trade financing constraints, in 2015 the government established EXIMBP as Pakistan’s export credit agency for the promotion, expansion, and diversification of international trade through the provision of credit guarantees, insurance products and ancillary services to exporters and importers. The State Bank of Pakistan (SBP) assigned staff (including a CEO) to managerial positions at EXIMBP. However, by late 2017, EXIMBP was still not operational. Subsequently, the Ministry of Finance requested assistance from Asian Development Bank (ADB) in operationalizing it.
The government specifically requested the Technical Assistance (TA) project, which was in line with the country’s Strategic Trade Policy Framework 2018-2023. Although the TA was not initially included in the ADB Country Operations Business Plan, its objectives were consistent with ADB’s country partnership strategy (CPS) of 2015-2019 for Pakistan, which aimed to enhance SMEs’ access to trade credit, export credit insurance, and related products.
The Technical Assistance (TA) project built upon previous efforts to support financial sector development in Pakistan and created a draft operational roadmap for EXIMBP.
According to the IED report, the main function of the technical assistance (TA) project was to support the operationalisation of the Export-Import Bank of Pakistan (EXIMBP) by developing constitutive documents, strategies, systems, and policies in line with international best practices. However, deficiencies in the design affected the delivery of the targeted outcome.
The project had 4 main outputs, but only three were fulfilled. The output related to passing legislation for EXIMBP was delayed. Thus the commencement certificate was not obtained by the completion of the TA.
The project’s Design and Monitoring Framework (DMF) did not sufficiently assess risks or consider potential delays caused by external entities, including the State Bank of Pakistan (SBP) and government ministries, involved in enacting the EXIMBP Act. The project was completed later than planned, with a target completion date of December 31, 2019, but actually finished on February 1, 2022.
Moreover, a contract variation in October 2020 increased the scope of work for three of the outputs, however, DMF targets were not revised. This resulted in all outputs being delivered beyond stipulated timeframe.
Considering these factors, the evaluation rated the TA as less than successful.
The report further suggested that a phased approach with better sequencing of activities and outputs could have improved the outcome.
On the positive side, the TA worth $0.5 million was approved in September 2018. while the disbursement was $0.494 million which shows the efficiency of TA that despite delays, the project was completed within the budget.
