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Mdgs nigeria

  1. 1. Economic Commission for Africa MDGs/LDCs Section, EDND Case Studies MDGs-based Planning in Africa: Lesson, Experiences and Challenges A Case Study of Nigeria Eric Eboh Prepared for the United Nations Economic Commission for Africa (UNECA)
  2. 2. Economic Commission for Africa EDND/MDGs/LDCs/CS/MP/2010/02 EDND Case Studies MDGs-LDCs Section A Case Study of Nigeria Eric Eboh Prepared for the United Nations Economic Commission for Africa (UNECA). Report made possible by the generous support of ECA joint pool partners. The views expressed in this report are those of the author and do not necessarily reflect the views of the United Nations, the United Nations Economic Commission for Africa or any of its officers.
  3. 3. Table of Contents List of Acronyms v Acknowledgement vii Executive Summary viii 1. Introduction 1 1.1 1.2 1.3 1.4 1.5 Context: MDGs and the 2005 World Summit Purpose and Objectives Key Issues Addressed by the Study Methodology Organization of the Report 1 2 2 3 4 2. Economic Context of the MDGs Challenge in Nigeria 4 3. Progress Towards the MDGs 2015 Targets 6 4. MDGs-Based Plan/Strategy: From Concept and Practice 7 5. Alignment of Nigeria’s Visioning/Planning to MDGs-Based Planning 8 5.1 5.2 5.3 5.4 5.5 The Planning Context Vis-À-Vis MDGs Philosophy and Succession of National Development Planning Alignment of NEEDS-1 to MDGs: The Status of Background Studies, NEEDS Assessment/Costing And Participatory Processes MDGs-Contents of NEEDS-1, NEEDS-2 & Vision 2020 Macroeconomic Frameworks, Fiscal Policy and MDGs-Based Planning: The Cases of NEEDS-1 and NEEDS-2 8 8 11 12 14 6. 18 ii Impact of Federal Setting and Subnational Authorities on MDGs and MDGs-Based Planning: Insights from Nigeria’s Experience 6.1 6.2 6.3 18 19 20 Concept vs Practice of “National Plan” in a Federal Setting Policy Decentralisation and MDGs: The Nigeria Experience Subnational Jurisdictions and MDGs Spending
  4. 4. 6.4 Localisation of MDGs: The Role of Subnational Jurisdictions sing the SEEDS-LEEDS Example 22 7. Monitoring, Evaluation and Reporting of MDGs 24 7.1 7.2 7.3 7.4 7.5 7.6 8.0 MDGs Monitoring and Evaluation is Crucial The National Monitoring and Evaluation (M & E) System Monitoring and Evaluation Arrangements Under NEEDS 1 & 2 The Challenge of Adequate, Reliable and Timely Statistics Preparation and Dissemination of MDGs Progress Reports Subnational Dimensions of MDGs Monitoring, Evaluation and Reporting 24 25 Conclusions and Policy Implications 32 8.1 8.2 8.3 8.4 8.5 25 28 29 30 NEEDS-1 & NEEDS -2 Attempted MDGs-Based Planning The ‘Open’ Initiative was Critical Turning Point for MDGs-Based Planning Coordination, Monitoring and Reporting Systems Need Overhaul 3 4 Capacity Gaps and Policy Uncertainties Remain Critical Capacity Weaknesses are Acute at the Subnational Level 32 33 33 34 35 Bibliography 36 Appendix I: Questionnaire 38 Appendix II: List of Persons Interviewed 47 Appendix III: Revenue and Expenditure Shares of Federal, State and Local Governments, 2003-2007 50 Appendix IV: State-level MDGs Status and Related Indicators 51 Appendix V: State-level MDGs Indicators 53 Appendix VI: Terms of Reference for Country Studies on MDGs-based Planning in SSA 55 List of Tables Table 1: Selected Macroeconomic Indicators: NEEDS-1 Targets and Achievements, 2004-2008 Table 2: Actual Spending of Debt Relief Gains (N billion) 2006-2008 5 16 iii
  5. 5. Table 3: Total Project Value of MDGs Conditional Grants Scheme Initiatives 2007-2009 Table 4: Relative Size of Education and Health Expenditures of Federal and State Governments Table 5: MDGs-Related Indicators Across Nigeria’s Six Geopolitical Regions Table 6: Respondents’ Rating of Constraints to MDGs-Consistent Planning iv 17 21 23 33
  6. 6. List of Acronyms BMEU BOF CBN CES CWIQ ECA FDI FMAWR FRN GDP HIPCs ICT IDPs IMC I-PRSPs JPB KPI LDCs LEEDS M&E MDAs MDGs MICS MoE MoF MoH MoWA MTEF MTSS NBS NCDP NDP NEEDS NLSS NPC ODA OPEN OPFR OSSAP PPP PRSPs RMAFC RPED Budget Monitoring and Evaluation Budget Office of the Federation Central Bank of Nigeria Consumer Expenditure Surveys Core Welfare Indicator Questionnaire Economic Commission for Africa Foreign Direct Investment Federal Ministry of Agriculture and Water Resources Federal Republic of Nigeria Gross Domestic Product Highly Indebted Poor Countries Information Communication Technology International Development Partners Independent Monitoring Committee Interim Paper on Poverty Reduction Strategy Papers Joint Planning Board Key Performance Indicators Least Developed Countries Local Economic Empowerment and Development Strategy Monitoring and Evaluation Ministries, Departments and Agencies Millennium Development Goals Multiple Indicator Cluster Survey Ministry of Education Ministry of Finance Ministry of Health Ministry of Women Affairs Medium Term Expenditure Framework Medium Term Sector Strategy National Bureau of Statistics National Council on Development Planning National Development Plan National Economic Empowerment and Development Strategy Nigerian Living Standard Survey National Planning Commission Official Development Assistance Overview of Public Expenditure on NEEDS Oil Price Fiscal Rule Office of the Senior Special Assistant to the President Purchasing Power Parity Poverty Reduction Strategy Papers Revenue Mobilization, Allocation and Fiscal Commission Regional Programme for Enterprise Development
  7. 7. SAP SEEDS SSA TAC TOR TT UN UNDP VPF vi Structural Adjustment Programme State Economic Empowerment and Development Strategy Sub Saharan African Technical Advisory Committee Terms of Reference Task Team United Nations United Nations Development Programmes Virtual Poverty Fund
  8. 8. Acknowledgement This study was executed with support and collaboration from many institutions and agencies including international bodies, agencies of the Nigerian Federal and State Governments, non-governmental organizations as well as groups and individuals. The role of the United Nations Economic Commission for Africa (UNECA) in initiating and facilitating the Nigeria study as part of the Africa multi-country learning on MDGs-based planning is very commendable. In this regard, we acknowledge with gratitude the general facilitation, reviews and feedbacks given by UNECA Officers, including Dr. Kasirm Nwuke, Chief, MDGs and Poverty Analysis and Monitoring Section, UNECA and Dr. Oumar Diallo, Economic Affairs Officer, MDGs/Poverty Analysis and Monitoring Section. We are also grateful to Cisse Z. Marcelin of the United Nations Development Programme in Nigeria for facilitating contacts with government institutions and officials for interviews and discussions. We would like to express gratitude to officials of the National Planning Commission, including Prof. Sylvester Monye, Mrs. C. M. Ikpechukwu and Mr. Kenneth Kwujeli for their individual and collective assistance in scheduling interviews and discussions with other institutions and agencies of the Federal Government in Abuja. We are very appreciative of the contributions of the Office of the Senior Special Assistant to the President on MDGs in providing relevant information and literature for the study. Special mention is due to Hajiya Amina Ibrahim, the Senior Special Assistant to the President on MDGs, for giving the right atmosphere for interactions and discussions with MDGs staff. In particular, we note with thanks the vital information given by the MDGs costing team led by Mr. Barth Feese. Our thanks also go to Director General of the Budget Office of the Federation, Dr. Bright Okogu, for providing relevant fiscal and budget information relating to the MDGs in Nigeria. Thanks are due to Dr. Vincent Akinyosoye, Director-General, National Bureau of Statistics and his team, for attending to our needs for data and statistics. We also got helpful attention from the officers in the Planning, Research and Statistics departments of respective government institutions including the Federal Ministry of Health, Federal Ministry of Agriculture, Federal Ministry of Water Resources as well as the Research Department of the Central Bank of Nigeria. We also acknowledge the cooperation of officers of the United Nations Development Programme, World Bank, African Development Bank and UK Department of International Development (DFID) in granting our requests for interviews and also providing useful literature. Critical logistics and secretarial support was provided by staff of the African Institute for Applied Economics, Enugu, Nigeria. Special gratitude is due to staff of the Institute, particularly Mr. Celestine Nzeh, Mr. Oliver Ujah, Ms. Queeneth Anyanwu, Mrs. Beatrice Ndibe, Mr. Itobore Diejomaoh and Mr. Chiwuike Uba for their individual and collective assistance throughout the field study, data analysis and report writing. vii
  9. 9. Executive Summary Context and Objectives of the Study In 2005, at the UN World Summit and Mid-term Review of Progress towards the Millennium Development Goals (MDGs) targets, world leaders resolved that countries with extreme poverty adopt and begin to implement, by the end of 2006, MDGs-based poverty reduction strategies/national development plans if they do not have one. In the same vein, countries that already have national plans were urged to align them with MDGs-based planning. Against this backdrop, the United Nations Economic Commission for Africa (UNECA) initiated multi-country studies to analyse the experiences and lessons of MDGs-based planning in Africa. This Nigeria case study is one of these country studies. Specifically, the Nigeria case study brings insights from experiences and challenges of aligning national planning processes with MDGs-based planning frameworks in a federal setting where autonomous subnational governments impact significantly on overall national MDGs policies and spending. Conceptual Framework of the Study By 2005, when the UN World Summit resolved that countries should design and implement MDGs-based development plans, Nigeria was already midway in the implementation of the equivalent of poverty reduction strategy (PRS) – the National Economic Empowerment and Development Strategy (NEEDS). Within this context, the study examined the alignment of NEEDS-1 and subsequent planning processes (including NEEDS-2, Nigeria Vision 2020 and Vision 2020 1st Implementation Plan) with MDGs-based planning framework. The study combines desk research and interviews with relevant authorities of Federal and State Governments, as well as NGOs and multilateral and bilateral development partners in the country. Nigeria’s Progress toward the MDGs 2015 targets Existing MDGs reports show that there is scope for achieving the MDGs targets in universal primary education, gender equality and women empowerment, HIV/AIDS, aspects of environmental sustainability and developing a global partnership for development. But, current trends reflect limited prospects of attaining the MDGs targets in poverty reduction, child mortality, maternal health and diseases other than HIV/AIDS. Alignment of National Planning Processes with MDGs Though NEEDS represents a significant attempt at getting a truly national PRS for Nigeria, the SEEDS (state-level PRS) were just derivatives or offshoots, rather than foundations or building blocks of the national plan. In both process and content, NEEDS lacked the essential bottom-up planning architecture that should underpin the national development plan process in federal setting like Nigeria. Current national development planning processes including the Vision 2020 and Vision 2020 1st Implementation Plan 2010-2013 have howev- viii
  10. 10. er attempted to overcome this top-bottom approach. The Vision 2020 blueprint has been prepared based on synthesis of Vision 2020 reports by the various States of the country. In similar vein, the process of formulating the Vision 2020 1st Implementation Plan 20102013 reflects attempt in bottom-top approach. However, the ‘theoretical ideal’ whereby the national plan is the culminated synthesis of Federal and State Governments’ plans is in reality constrained by institutional weaknesses, particularly in inter-governmental coordination. The MDGs-Impact of Debt Relief Gains Spending NEEDS enunciated a wide range of MDGs-friendly fiscal and institutional reforms. But, the greater impetus for MDGs-consistent planning came from successful negotiation of debt relief from the Paris Club in 2005. The deal released roughly US$1 billion or N100 billion per year (otherwise referred to as the debt relief gains) for spending by the Nigerian Government. Under the agreement, Nigeria committed to channel the annual savings from debt relief to MDGs spending. The debt relief fund was expected to provide an additional 5% of government expenditure for MDGs. Public spending of the debt relief savings was to be coordinated and monitored by a Special Presidential Unit, known as the Office of the Senior Special Assistant to the President on MDGs (OSSAP-MDGs), under the Overview of Public Spending in NEEDS (OPEN), widely regarded as Nigeria’s equivalent of Virtual Poverty Fund (VPF). Under the OPEN initiative, government adopted measures for tracking the efficiency and effectiveness of debt relief savings for MDGs-related expenditure. The Initiative featured perhaps the largest single investment in M E from 2006-2008, among federal agencies. In the same vein, the federal government, in 2005, adopted the integrated accounting system to tag, track and monitor the spending of debt relief savings for MDGs. The measure tallied with the rolling out of the fiscal strategy paper, medium term expenditure framework and medium-term sector strategies, also in 2005. It was only in 2006, that is, one year to the end of NEEDS timeframe, that the Federal Government launched MDGs needs assessment (costing) in line with MDGs-based planning. The costing exercise covered 2006-2015 with 2006 as the baseline. It focused on the first seven (out of eight) MDGs, 11 targets and 32 indicators. Having completed the costing exercise, it is unclear the extent to which the costing outputs will be mainstreamed into the budgetary framework of the different line Ministries. Coordination and Monitoring Systems are Weak and Poorly Integrated Overall, the MDGs coordination and monitoring system is weak and disjointed. On the one hand, the Nigeria MDGs Reports give progress towards the MDGs in terms of achievement of the various indicators and the gaps in relation to the 2015 targets. The MDGs Reports do not link the performance on various indicators to the amount of public spending and outputs generated. On the other hand, the budget monitoring reports (BMRs) give the amount of spending and the activities/outputs realized. The BMRs neither contain the outcomes in terms of use of goods and services nor impacts on MDGs indicators. This shows a lack of connectivity of the budget monitoring reports and the MDGs progress reports. Moreover, the MDGs monitoring and eval State Governments set up Stakeholder Development Committees to articulate and formulate their respective Vision 2020 drafts which formed inputs for the National Vision 2020 blueprint. . ix
  11. 11. uation process lack a systematic logical framework for connecting outputs, outcomes to impact. There is some collaboration between the NPC and OSSAP-MDGs in MDGs reporting and needs assessment (costing). However, insufficient collaboration and coordination exist, for example, in the identification, monitoring and evaluation of federal government’s MDGs interventions as well as in the monitoring of MDGs activities and progress in the States. The existing bipolar M E arrangement is susceptible to overlapping, duplication and inter-agency rivalries. There is therefore, a large scope for better coordination, organized collaboration and unified approach by the M E agencies including the National Planning Commission, OSSAP-MDGs, Budget Office of the Federation and MDGs-bearing MDAs. Institutional Weaknesses Hinder National MDGs-Based Planning Institutional and capacity weaknesses impede the alignment of NEEDS with MDGs-based planning. The planning systems at federal and subnational levels are fraught with debilitating factors which include lack of adequate capacity for information processing, inadequate analytical skills, poor mobilization of stakeholders, low political attention to the planning process and lack of coherence between planning and budgeting system. There is additional concern about sustainability of institutional framework and capacity retention for MDGs-based planning. The OSSAP-MDGs currently serves a vital complementary role in the coordination, monitoring and reporting of MDGs. Nevertheless, it remains an ad hoc administrative creation that exists at the instance of the President. Parallel to the OSSAPMDGs is the National Planning Commission (NPC), which has statutory responsibility for the formulation, coordination and monitoring of long-term, medium-term and short-term national development plans including annual plans, budgets, medium-term and perspective plans at the federal, state and local government levels. Ironically, most existing MDGs-based planning and monitoring capacity lie within OSSAP-MDGs. The poor diffusion of capacity from OSSAP-MDGs to MDGs line ministries and agencies, including the National Planning Commission, leaves big question marks for achieving coordination and sustainability. Poor Data Quality has Hindered MDGs-based Planning and Monitoring Capacity weaknesses also manifest in paucity of timely, adequate and reliable statistical data for MDGs monitoring and evaluation. At the time of formulating the NEEDS in 2003, most requisite data were in arrears, existing datasets lacked coherence and synergy. Also, data gaps across indicators diminish the usefulness of Nigeria’s annual MDGs reports. While considerable improvements have been achieved since 2003 through reforms at the National Bureau of Statistics, much still needs to be done and there is yawning need for statistical capacity building at the sub-national levels. In order to achieve systematic array of coherent, consistent and complete statistical data over time, Nigerian statistical agencies need improved technical skills, increased institutional resources and better coordination/collaboration between national and subnational levels. In particular, the MDGs monitoring and evaluation systems will benefit immensely if there is systematic matching of MDGs statistical data from the three major national surveys – the Multiple Indicator Cluster Survey, Nigerian Living Standard Survey and the Core Welfare Indicator Questionnaire Survey.
  12. 12. MDGs Progress Reports Lack Sufficient Evidence Base Till date, Nigeria has produced three annual MDGs Reports (2004, 2005 2006). These reports x-ray the progress scorecard on the MDGs 2015 targets, the contexts and prospects of the march towards the MDGs targets. The Nigeria MDGs Reports give progress towards the MDGs in terms of achievement of the various indicators and the gaps in relation to the 2015 targets. The MDGs Reports do not link the performance on various indicators to the amount of public spending and outputs generated. Besides, the MDGs annual report does not contain complementary State-level disaggregated statistics, thus obscuring apparent wide variations in MDGs status across the States. In order to solve this knowledge gap, some state governments are producing state-level MDGs reports. Without coordinated and synergistic interplay of national-level and disaggregate state-level MDGs statistics, there might be issues of non-coherence and disparity that raises credibility questions about MDGs statistics. Capacity Weaknesses are More Acute at the Subnational Level Evidence indicates that the capacity constraints to MDGs-based planning and monitoring tend to be more pronounced at the subnational levels. Nigeria’s subnational (state and local) governments enjoy autonomy for MDGs public spending, economic planning and sector policies. But, experience shows that state and local governments have largely depended on the policy leadership from the federal government. This dualistic scenario of autonomy and dependence is linked to the fact that subnational governments lack commensurate capacities to undertake MDGs-based planning. The situation can be linked to the fact that many states were created from existing ones without corresponding efforts to develop human and institutional capacities for strategic planning, economic policymaking and public service delivery. Older states often display greater policy and institutional capacities, relative to younger states. Moreover, the federal government ministries, departments and agencies (MDAs) seem to enjoy generally higher concentration of more experienced public officials, than state governments. Thus, the public service bureaucracy in many states is weaker relative to their federal government counterparts. For them to actualise their rightful roles and responsibilities for the MDGs, therefore, the subnational jurisdictions will require scaling-up of planning and monitoring capabilities. xi
  13. 13. 1. Introduction 1.1 Context: MDGs and the 2005 World Summit At the UN Millennium Summit in September 2000, a historic gathering of world leaders adopted the Millennium Declaration, committing their countries to a new global partnership to reduce poverty and achieve sustainable development. For the first time in history, countries collectively agreed on a globally applicable set of development goals, indicators and targets, now famously called the Millennium Development Goals (MDGs). The Millennium Development Goals are the world’s time-bound and quantified targets for addressing extreme poverty in its multiple dimensions—income poverty, hunger, disease, lack of adequate shelter and exclusion—while promoting gender equality, education and environmental sustainability. As the most broadly supported, comprehensive and specific poverty reduction targets the world has ever established, the Millennium Development Goals have become the standards for global and country-level self assessment, peer review and mutual accountability among countries. In addition, the MDGs now serve as the fulcrum of development policy across the globe and benchmarks against which citizens hold their governments accountable. Two years later (specifically in March 2002), world leaders met again at the International Conference on Financing for Development in Monterrey, Mexico, and agreed on a landmark framework for global development partnership for poverty reduction. Both the Millennium Declaration and the Monterrey Consensus marked significant new turn in international development. At the follow-up meeting in the same year - the World Summit on Sustainable Development in Johannesburg, South Africa - UN member states reaffirmed the MDGs as the world’s time-bound development targets. In order to promote systematic planning and investments for the achievement of (not just accelerating progress towards the) MDGs, the UN Secretary-General launched the UN Millennium Project, an independent advisory body charged with analyzing and proffering best strategies for meeting the MDGs. In January 2005, the UN Millennium Project presented its findings and recommendations – Investing in Development: A Practical Plan to Achieve the MDGs. The Report gives 10 broad recommendations. One is that developing country governments should adopt development strategies bold enough to achieve or even exceed the MDGs 2015 targets. In countries where Poverty Reduction Strategy Papers (PRSPs) or national development plans or strategies already exist, such should be aligned with MDGs-based planning. In line with these recommendations, the UN World Summit and Mid-term Review of Progress towards the MDGs targets, world leaders resolved that countries with extreme poverty adopt and begin to implement MDGs-based poverty reduction strategies/national development plans if they do not have one. Against this backdrop, the United Nations Economic Commission for Africa (ECA), through the MDGs/Poverty Analysis and Monitoring Section, has launched a set of country studies to investigate the implementation of this resolution in Africa, examine experiences and draw lessons for improving MDGs-based planning in Africa. This Nigeria case study is part of multi-country assessments of MDG-based planning across
  14. 14. Africa. The multi-country studies will provide analytical insights for peer-learning, knowledge sharing and capacity building under the “African PRS/MDG Learning Group” and the “Enhanced Knowledge Sharing Network to Support the Poverty Reduction Process in Africa”. The Terms of Reference (TOR) for the country studies is given as Appendix V. 1.2 Purpose and Objectives • To examine experiences learnt in formulating, implementing, monitoring and evaluating Nigeria’s MDG-consistent poverty reduction strategies or National Economic Empowerment and Development Strategy (NEEDS). • To draw lessons for the articulating of the national vision, for the process of formulating medium-term strategies to support the national vision and for improving the design and implementation of the MDGs at the local level. 1.3 Key Issues Addressed by the Study Bases for and process of articulating Nigeria’s national vision • Analyze whether the country has, through a participatory process, established a national development vision that fully takes on board the MDGs; • Review the extent to which the MDGs are tailored to country-specific conditions and priorities through a process that translates a national vision into measurable targets; and • Assess the degree to which national vision and tailored targets are supported by a set of policy priorities and an effective and supporting framework. Assessment of Nigeria’s medium-term strategy for MDGs • Review the degree to which the national development vision is supported by realistic medium-term strategies that ensure the achievement of the MDGs; • Evaluate how existing sector strategies are reviewed and adapted so as to be in tune with the national development strategy that is adopted for achieving the MDGs; • Assess the extent to which existing cross-cutting strategies (HIV/AIDS, gender) are reviewed and adapted in the national development strategy, on which efforts to reach the MDGs are anchored; and • Evaluate whether the MDGs alignment efforts are supported by efforts to improve budget execution and reporting, which are essential in ensuring efficient and effective use of resources. Subnational Dimensions and Localization of the MDGs • Assess the manner and extent to which Nigeria’s MDGs-consistent economic plan has been devolved to subnational and local levels; • Evaluate whether there has been a comprehensive assessment of needs, institutions and resources at the local level;
  15. 15. • Analyze whether the national development strategy assess the capacity of subnational jurisdictions to formulate, execute and report public expenditure programs; and • Assess the degree to which dialogue and consensus building guide the processes of prioritizing local development agenda as well setting local targets. Monitoring, Evaluation and Reporting of MDGs • Assess whether there is an institutional setup for monitoring, evaluating, and reporting progress toward the MDGs; • To examine the nature and degree of coordination and collaboration between agencies charged with monitoring, evaluation and reporting; • Evaluate the degree to which data requirements, for monitoring, evaluation and reporting are fulfilled, that is, the extent to which monitoring, evaluation and reporting systems are backed by a set of intermediary (input and output) and final (outcome and impact) indicators, which are tailored to country and region-specificities; and • Review specific areas of capacity need for effective monitoring, evaluation and reporting systems. 1.4 Methodology The study combined the analysis of documentary (published and unpublished) information and targeted interviews with respondents. Documents from government, international development agencies and non-governmental organizations were explored for information on MDGsoriented and related policies, institutions and strategies. Also, relevant government documents, monitoring/evaluation reports and research papers were studied in order to obtain literature and statistics on budget and expenditure and on progress towards the MDGs 2015 targets. In particular, some additional literature and statistics on the subnational dimensions in MDGs planning, monitoring and evaluation were obtained from the author’s previous paper prepared for the UNECA International Conference on ‘Subnational Jurisdictions and MDGs in Africa’. Primary data were collected through oral interviews with officials of MDGs-relevant government agencies, civil society organisations and international development agencies in the country. The interviews were done using the generic survey instrument, given as Appendix I. The face-to-face approach enriched the questionnaire feedback by allowing for elaborate discussion, interaction with respondents. The government agencies in the sample include Ministry of Health (MoH), Ministry of Education (MoE), Ministry of Women Affairs (MoWA), Ministry of Agriculture and Water Resources (FMAWR), Ministry of Finance (MoF), National Planning Commission (NPC), Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and Office of the Senior Special Assistant to the President on MDGs (OSSAP-MDGs). Officials of some international development partners including United Nations Development Programme, World Bank and African Development Bank were Eboh, E. C. (2009). Has Autonomy of State Governments Bolstered the Achievement of MDGs in Nigeria? Paper presented at the UNECA Expert Meeting on The role of sub-national jurisdictions in efforts to achieve the Millennium Development Goals (MDGs) in Africa”, in collaboration with Federal Ministry of Finance of Nigeria, Office of the Senior Special Assistant to the President of Nigeria on MDGs (OSSAP-MDGs) and The World Bank, May 5-7, 2009, Abuja, Nigeria. .
  16. 16. also interviewed. A total of twenty eight (28) individuals from across the relevant government MDAs, international development agencies, non-governmental organizations were interviewed. The names and organizations/institutions of the respondents are given in Appendix II. In terms of conceptual framework, this study observes that Nigeria has begun implementation of her equivalent of poverty reduction strategy (that is, National Economic Empowerment and Development Strategy - NEEDS) at the time the UN World Summit resolved that countries should design and implement MDGs-based development plans. Nigeria therefore falls within the category of countries which should align existing planning instruments and processes including national and sectoral medium-term plans with the MDGs. In view of this peculiar circumstance, this study examined the alignment of NEEDS policies/implementation and successive planning processes to MDGs-based planning as prescribed by the UN World Summit 2005 and Mid-term Review of Progress towards the MDGs targets. 1.5 Organization of the Report This paper is organized into 7 Sections. Section 1 defines the study within the twin context of the 2005 World Summit and UNECA’s initiative to inquire into the experiences and challenges of MDGs-based planning in Africa. Section 2 gives the economic context of the MDGs challenge in Nigeria. Section 3 reviews Nigeria’s progress scorecard on the MDGs 2015 targets. Section 4 outlines the conceptual and practice dimensions of MDGs-based planning in line with the UN Millennium Project. Section 5 examines the alignment of Nigeria’s visioning and planning processes with the MDGs-based planning frameworks, as operationally defined by the UN Millennium Project. Section 6 explores the implications of Nigeria’s federal structure and subnational jurisdictions on MDGs and MDGs-based planning. Section 7 evaluates the national and subnational systems for the monitoring, evaluation and reporting of the MDGs. Section 8 gives the conclusion and lessons from the findings. 2. Economic Context of the MDGs Challenge in Nigeria Since attaining political independence in 1960, Nigeria has exhibited vivid ironies in social and economic development. Despite huge endowments of natural and human resources, economic development and living conditions have been undermined by bad political governance and economic mismanagement. In 1960, agriculture dominated the economic structure (about 64% of GDP), provided the greater proportion of government revenue, foreign exchange and employment. But, with the oil boom of the 1970s, crude oil overtook agriculture as the largest single source of government revenue/foreign exchange, even though agriculture continued to provide the bulk of employment. The decline in agriculture share of GDP did not result from productivity-induced releases of resources into secondary sectors, but due to the phenomenal rise in crude oil sector. The surge in oil revenues during the 1970s precipitated dramatic expansion in the economy fueled by sharp rise in public spending. But, from early to late 1980s, the shock from decline in oil prices impacted negative GDP growth rates and economic indicators deteriorated. The economic stagnation continued to the 1990s as per capita GDP in Purchasing Power Parity (PPP) terms fell 40% from $1215 in 1980 to $706 in 2000.
  17. 17. Poverty rose from 28.1% in 1980 to 65% in 1996, coupled with decline in several human development indicators, including access to health and education. The “boom-and-burst” cycle exposed the unsustainable dependence on oil sector and the negative impacts on the productivity and competitiveness of the non-oil economy. By 2003, external and domestic debts amounted to about 70% of GDP, with serious budgetary consequences of debt servicing. Consequent upon monetary and fiscal measures and institutional reforms, coupled with relatively more favourable oil prices, the period from 2000-2003 witnessed modest improvements in the economy. Annual per capita GDP grew by 2.2% during 1999-2003, compared to stagnant levels throughout most of the 1990s. The period also witnessed a decline in poverty from 65% in 1996 to 54% in 2004. Since 2003, there has been remarkably improved macroeconomic and growth performance. The situation is associated with the adoption of the National Economic and Empowerment Strategy (NEEDS) in 2004. NEEDS was a medium-term economic reform framework designed to promote sustainable growth, poverty reduction and MDGs. Under NEEDS, the federal government initiated wide-ranging macroeconomic, institutional and sector reforms for a private sector-driven economy. The fortuitous rise in international price of crude oil and concomitant increase in government revenues provided a favourable fiscal context and relatively better macroeconomic environment, as shown in Table 1. Table 1: Selected Macroeconomic Indicators: NEEDS-1 Targets and Achievements, 2004-2008 Indicators 2004 2005 2006 2007 2008 GDP at Current Market Prices (N billion) 11,673.6 14,735.3 18,709.6 20,853.6 24,048.5 GDP at Current Market Prices (US$ billion) 76.17 88.37 144.49 148.69 175.36 GDP per Capita (N) 87,845.3 109,155.1 132,604.3 142,957.1 159,906.8 GDP per Capita (US$) 658.02 826.31 1,030.34 1,136.11 1,349.08 Real GDP Growth (%) 6.6 (5.0) 6.5 (6.0) 6.0 (6.0) 6.5 (7.0) 6.4 Oil Sector 3.3 (0.0) 0.5 (0.0) -4.2 (0.0) -4.5 (0.0) -4.8 Non-Oil Sector 7.8 (7.3) 8.6 (8.5) 9.4 (8.3) 9.5 (9.5) 9.1 GDP Deflator Growth (%) -0.2 22.0 18.1 3.3 12.5 Inflation Rate (%) (Dec-overDec) 10.0 (10.0) 11.6 (9.5) 8.5 (9.5) 6.6 (9.0) 15.1 Gross National Savings (% of GDP) 19.27 (14.1) 18.03 (17.2) 32.80 (23.0) 33.16 (29.0) 35.31 Retained Revenue 11.4 (9.7) 11.9 (7.8) 10.4 (7.6) 11.2 (7.3) 13.3 Total Expenditure 12.9 (23.5) 13.0 (23.4) 10.9 (22.9) 11.8 (22.3) 13.5 Domestic Output and Prices Federal Government Finance (% of GDP) * Figures in parenthesis are targets set under NEEDS-1, 2004-2007. Source: CBN Annual Reports for the period to 2008 Growth has not translated to significant MDGs scorecard: In spite of the improved macroeco
  18. 18. nomic performance in the last five years, there remain huge challenges of sustainable growth, poverty reduction and attainment of the MDGs 2015 targets. Overall growth has fallen below levels (that is, about 8-10%), required to position the country on the path to achieving the poverty-related MDG of halving income poverty by 2015. Even though growth has been driven by non-oil sector, particularly labour-intensive agriculture, employment opportunities have not increased commensurate to the overall growth of the economy, leading to suggestions of “jobless growth”. With an average annual investment rate of less than 14% of GDP, Nigeria is far below the minimum investment level of about 30% of GDP required to unleash poverty reducing growth rate of up to 8%. Fiscal decentralization remains a challenge to effective macroeconomic stabilization and efficient public finance management and there is large scope to improve intergovernmental coordination of fiscal policies and budget management in order to enhance collective impact on public services and MDGs. Though national poverty reduced from 70% in 2003 to 56% in 2005, the essential structural changes for aligning economic growth trajectory to attainment of the MDGs targets (poverty, health, education, etc) remains deficient. 3. Progress Towards the MDGs 2015 Targets Beginning from 2004, Nigeria has produced three annual MDGs Reports (2004, 2005 2006). The Report gives annual scorecard on progress towards the MDGs by 2015. Also, it gives the institutional and policy context as well as the challenges and imperatives for MDGs targets. Though the most recent progress report is about three years in arrears, it underscores the generally slow progress and the enormity of the challenges in meeting the 2015 targets. According to the most recent MDGs report (2006), Nigeria has good prospects of achieving the targets for universal primary education, gender equality and women empowerment, HIV/AIDS, aspects of environmental sustainability and developing a global partnership for development. The literacy rate of 15-24 years old increased from 70.7% in 1991 to 80.20% in 2005, against the 2015 targets of 100%. Progress towards the 2015 targets on the three indicators is considered as good. The ratio of girls to boys (girls per 100 boys) in primary education is about 81% in 2005, against the 2015 targets of 100%. The ratio of girls to boys (girls per 100 boys) in secondary education is about 81% in 2005, against the 2015 targets of 100%. On the other hand, the ratio of girls to boys in tertiary education (girls per 100 boys) increased from 46% in 1991 to 72% in 2003 against the 2015 targets of 100%. On the other hand, current trends indicate very slow progress and in fact dim prospects for meeting MDGs targets relating to poverty reduction, child mortality, maternal health and diseases other than HIV/AIDS. Poverty headcount is about 54.4% against the 2015 target of 21%. Progress is also regarded as slow on this hunger indicator. Infant mortality rate (per 1000 live births) was about 110 in 2005, against the 2015 target of 30.3. Under-five mortality rate (per 1000 live births) was about 197 in 2004, against the 2015 target of 63.7. Maternal mortality rate (per 100,000 live births) was about 800 in 2004, against the 2015 target of 75. The slow progress towards the MDGs 2015 targets underscores the necessity for MDGsbased planning framework in Nigeria. The MDGs-based planning is indeed a necessary ve. . NEEDS document, p.9. 2006 Nigeria MDGs Report
  19. 19. hicle to mobilize and harness national resources in plural political systems, like Nigeria. The MDGs-based national planning framework will give a shared vision and common understanding of what needs to be done to achieve desired national goals and delineate the responsibilities of respective stakeholders. In addition, MDGs-based planning framework is justified as a response to the inadequacies of the PRSP approaches for achieving the MDGs. 4. MDGs-based Plan/Strategy: From Concept and Practice Consequent upon the UN Millennium Declaration of 2000, “MDGs” became the unifying conceptual framework in global development literature and the universal empirical benchmark for measuring the progress of human development within and across countries. But, it was not until 2005 that the concept of “MDGs-based” planning or plan was given clear operational definition by the UN Millennium Project (UNMP). According to the UNMP report, MDGs-based national development plan is any ambitious goal-based national strategy that aims to achieve, or exceed, the MDGs. Instead of strategies to “accelerate progress toward the MDGs” through incremental expansions of social services and infrastructure, MDGs-based plans are bold and long-term strategies aimed at achieving the quantitative targets and goals. Corresponding to this ambition, MDGs-based planning works backward from the MDGs targets and time horizon to define the policies and investments required between now and 2015. This approach differs from the conventional practice - which is to formulate investment strategies independent of needs after the macroeconomic framework and overall budgetary ceilings have been set. Rather, MDGs-based strategy is formulated through a reverse planning process – an assessment of the actual MDG investment needs, followed by the design of a suitable macroeconomic framework and financing strategy. Additional core features of MDGs-based national development strategy include: • It is oriented to achieving specific MDGs outcomes; • The process of developing the plan should be inclusive and transparent and have national ownership and high-level political commitment; • It is based on bottoms-up needs assessment in terms of rigorous estimation of inputs (human resources, financial resources and infrastructure) for achieving the MDGs; • It identifies a full set of interventions for implementation at a scale required to achieve the MDGs; • It contains integrated and multi-sectoral measures to meet each of the MDGs; • It is long-term in outlook – provides for significant long-term investments to tackle human capacity and infrastructure constraints; and • It is linked to national budgets – constitutes the basis of national budgets and expenditure frameworks for MDGs investments (UN Millennium Project, 2005b). Preparing MDGs-based national development strategy requires a planning process underpinned by some fundamentals. On the basis of a nationally-owned planning process, the UN Millennium Project (2005a). Investing in Development: A Practical Plan to Achieve the Millennium Development Goals. New York: United Nations. . UN Millennium Project (2005b). Preparing National Strategies to Achieve the Millennium Development Goals. New York: United Nations. .
  20. 20. MDGs based strategy will necessarily begin with poverty mapping and review of dimensions and dynamics of poverty and living conditions. The baseline review/inventory is followed with needs assessment. The first leg of needs assessment is to identify the specific public investments/policies necessary to achieve the MDGs (including faster economic growth, key public investments, public policy and public management imperatives and private sector promotion). The second leg is to quantify specific investments (human, financial and infrastructure) across multiple sectors to meet the MDGs. Based on the results of the inventory, baseline review and needs assessment, a 10-year coherent framework is formulated for achieving the MDGs. The 10-year MDGs framework becomes the basis for preparing the national development strategy as a more detailed, operational plan, linked to a medium-term expenditure framework and to a monitoring and accountability mechanisms (UN Millennium Project, 2005a; 2005b). 5. Alignment of Nigeria’s Visioning/planning To MDGs- based Planning 5.1 The Planning Context vis-à-vis MDGs Using the benchmark characterization of MDGs-based planning, this section examines the nature and extent to which Nigeria’s visioning and development planning have been aligned with MDGs. The relevant national planning scenarios under MDGs-oriented scrutiny include the National Economic Empowerment and Development Strategy (NEEDS) I 2, 7-Point Agenda, Vision 2020 and Vision 2020 1st Implementation Plan. While NEEDS-I was implemented from 2004-2007, NEEDS-2 which was to cover 2008-2011 was replaced with the Seven-Point Agenda by the new federal government in 2007. The Vision 2020 blueprint was completed in October 2009 while Vision 2020 1st Implementation Plan covering 2010-2013 is currently being developed. Among these recent national policy frameworks/development strategies, NEEDS I is perhaps the most relevant case scenario for examining alignment with MDGs-based planning. This is due to two factors. NEEDS-I was the prevailing national development strategy (equivalent of poverty reduction strategy) at the time poor countries were urged by the UN World Summit 2005 to either adopt/implement MDGs-based national poverty reduction strategies/national development plans or align their existing PRSPs/national development plans with the MDGs. Moreso, NEEDS-I is the only national development strategy that has run its full course, 2004-2007. Notwithstanding the unique relevance of NEEDS-1 to the context of this study, it is remains useful to examine the alignment of successive planning/strategy formulation processes (including NEEDS-2, 7-Point Agenda, Vision 2020) to MDGs-based planning. 5.2 Philosophy and Succession of National Development Planning The fundamental philosophy underpinning Nigeria’s national development vision is the subsisting Nigerian Constitution 1999. Chapter II of the Nigerian Constitution otherwise referred to as the “Fundamental Objectives and Directive Principles of State Policy”, states among others, that the security and welfare of the people shall be the primary purpose of government. Government is entrusted with the responsibility to harness the resources of the nation to serve the common good and promote national prosperity based on an efficient, dy-
  21. 21. namic and self-reliant economy. Also, it states that government should manage the economy so as to secure the maximum welfare, freedom and happiness of every citizen. Furthermore, it specifically requires that the State shall ensure that suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care and pensions, and unemployment benefits, etc are provided for the citizens (Federal Republic of Nigeria, 1999). In fact, this national philosophy (which was also enunciated in previous Constitutions) has been the generic bases for development planning since independence in 1960. In the 1st post independence national development plan, 1962-1968, there was an attempt at enacting a common planning objective for the entire country. It aimed at laying the administrative and institutional framework for the future growth of the then infant economy. The successor plan, the 2nd National Development Plan, 1970-1974, which was launched after the Civil War, aimed at reconstructing the war-battered economy and promoting economic and social development. The 2nd Plan aimed at integrating the 12 newly created states into an organic national framework. As the 2nd Plan lapsed, a very ambitious 3rd National Development Plan was enunciated to expand agriculture, industry, transport, housing, water supplied, health facilities, education, rural electrification and community development. The plan was based on the strategy of utilizing the resources from oil to develop the productive capacity of the economy and improve overall welfare. To consolidate the progress achieved with the 1975-1980 Plan, the 4th National Development Plan 1981-1985 was aimed at promoting national self-reliance, balanced development and new national orientation as well as fostering improvements in agriculture, manufacturing, education, manpower development and infrastructure. There were also emphases on social services including health, housing and water supply in rural and urban areas. It incorporated, for the first time, the local government system in the planning framework, in line with the extant Constitution. The ambitious stance of the Plan was undermined by steep decline in revenue in the wake of the crash of international oil prices in the early 1980s. The government responded using a series of demand management or austerity measures aimed at conserving foreign exchange and reducing the general level of domestic expenditures. These measures were encapsulated under the Economic Stabilization Act 1982 which aimed at rationalizing overall public expenditures and restoring fiscal balance in the domestic and external sectors. Due to the circumstances, the country achieved merely 50% of the planned investment during 1981-85. By 1986, the economic downturn had worsened. The government adopted the Structural Adjustment Programme (SAP). The SAP was aimed at restructuring and diversifying the productive base, achieving fiscal and balance of payments viability, ensuring sustainable non-inflationary growth and minimizing the dominance of unproductive public sector investment and increasing the role of the private sector. Though the SAP was intended to span the initial period July 1986June 1988, its core elements were to become the principles for economic reforms in the ensuing period. The trend continued until 1994 when a new military government overturned economic liberalization, by reverting to fixed exchange rates and administratively controlled interest rates. Apparently dissatisfied by economic planning experience with the SAP and awed by the grave political consequences of continued economic deterioration, the same government that enunciated SAP reverted to deliberate multi-year planning, beginning from 1988. The plan. SAP was adopted following the rejection of the IMF facility by Nigerians through a national IMF loan debate.
  22. 22. ning approach was a departure from the previous fixed-term medium term planning model of the post-independence period. Rather, the government adopted a new planning approach based on a long-term strategic plan implemented through three-year rolling plans. Without a long-term strategic plan, the government went ahead to launch the Rolling Plans. For more than ten years, 1988-1999, Nigeria practiced the three-year Rolling Plans, but they were largely ineffectual in the absence of a perspective (long-term) planning framework. Also, because the annual budgets did not derive specifically from the Rolling Plans, their implementation was ineffectual. The Rolling Plan approach was continued until 1999 when a civilian democratic government enunciated its economic programme under the aegis of Economic Policy Directions for Nigeria, 1999-2003. The programme hinged upon the strategy of promoting market-oriented private sector-led economy with government serving as a catalyst and proving the enabling environment for the private sector to thrive and flourish. Government outlined basic principles for policy and legislative changes aimed at attracting foreign direct investment and enhancing private sector role in the economy. In addition to the fact that the implementation tools were not well articulated, the tenets of the programme were not domesticated by subnational and local jurisdictions. Moreover, there were not enough political will and executive capacity to implement the complex market-oriented reforms. Midway in the implementation of the Economic Policy Direction for Nigeria, 1999-2003, and in line with the framework of the country-level Poverty Reduction Strategy Papers (PRSPs), Nigeria started the process of developing an Interim Paper on Poverty Reduction Strategy (IPRSPs), in February 2001. By March 2003, Nigeria had completed the Draft Interim Paper on PRSP. The process of developing the Interim Paper has been critiqued as being consultative rather than participatory, ad hoc and not mainstreamed (Eboh, 2003). The national ownership of PRSP was stymied by public perceptions that it was donor-driven and externally instigated. Worse still, in practice, government showed very little political commitment to the process. Not surprisingly therefore, on the heels of the completion of the Interim Paper in 2003, the same government embarked upon what it termed a home-grown equivalent of the PRSP, known as the National Economic Empowerment and Development Strategy (NEEDS-1), 2004-2007. Towards sustaining the reforms and consolidating upon the achievements under NEEDS1, the federal government initiated the NEEDS-2 process (with the perspective of Vision 2020) to cover the period 2008-2011. However, NEEDS-2 was never adopted formally by the government. This is because the new government rather encapsulated its policy directions as the 7-Point Agenda. The 7-Point Agenda outlines the policy thrusts, priority sectors and agenda for social and economic development. At the same time, the government commenced the process of fixed-term development planning for the articulation of the Vision 2020 Economic Transformation Blueprint and the Vision 2020 1st Implementation Plan 2010-2013. 10
  23. 23. Within the context of the National Vision, the achievement of the MDGs will depend on the extent of MDGs mainstreaming in the national economic development framework. In clarifying the path to sustainable actualization of the MDGs, literature underscores the fact that success is more likely when efforts are focused also on solving fundamental institutional constraints to better livelihoods, rather than just increasing the provision of public services directly linked to the MDGs. All respondents (100%) indicated that the country has a long-term national vision. But, 62% and 25% of the respondents stated that the national vision is “very consistent” and “completely consistent” with the MDGs, respectively. 5.3 Alignment of Needs-1 To MDGs: The Status of Background Studies, Needs Assessment/costing and Participatory Processes Background Studies and Key Assumptions: Several macroeconomic and sector studies were already in place at the time of drafting of NEEDS-1. But, they were largely pre-existing stand-alone studies, not deliberately intended or specifically commissioned for NEEDS-1. Nevertheless, they provided useful analytical evidence base for articulating the macroeconomic framework and policy priorities under NEEDS-1. The development challenges espoused in these studies were reechoed in NEEDS-1. They included macroeconomic volatility, poor economic management, weak fiscal and budget management, lack of competitive business environment for non-oil private sector growth and worsening and growing inequality. MDGs Needs Assessment (Costing) in relation to National Planning: Though the NEEDS-1 time frame was 2004-2007, some form of MDGs needs assessment/costing exercise did not take place until 2006, midway into NEEDS-1. The costing exercise covered the period 20062015 with 2006 as the baseline. It focused on the first seven (out of eight) MDGs, 11 targets and 32 indicators. The models adopted are sector-based (that is, estimate cost of interventions in each of the MDGs sectors) rather goal-based (the cost of attaining each of the goals). The technical team for the costing exercise was coordinated by the OSSAP-MDGs and comprises officials from the relevant government ministries, the National Planning Commission and national consultants with technical and financial support from UNDP. According to the costing, it will take a cumulative sum of about US$248 billion to achieve the MDGs by 2015. On an annual basis, the projected cost rises from $15bn in 2007 to $43bn in 2015, and an annual average of about $28 billion10 over the period. On per capita basis, the cost estimate rises from about $127.72 in 2009 to $233 in 2015 and averages about $164. The cost estimates were analyzed from several perspectives: annual stream of capital and recurrent; infrastructure An example is given where achievement of MDGs education targets may not lead to gainful employment that assures income (UNCTAD, 2008 –The Least Developed Countries Report 2008 – Growth, Poverty and the Terms of Development Partnership). . OSSAP-MDGs (2005). MDGs Needs Assessment and Financing Strategy for Nigeria, Abuja 10. Based on data in CBN Annual Report for 2008, the projected cost ($28 billion) translates to about 16% of GDP estimate of $175.36 billion in 2008. The import of this project cost is the fact that the amount takes up the entire 2008 expenditure of the federal government and in fact reaches up to 50% of combined annual Year 2008 expenditures of the federal, state and local governments. The estimates underscore the huge challenge to identify and mobilise financing to meet MDGs investment requirements in a manner compatible with macroeconomic stability and fiscal competition pressures. . 11
  24. 24. and human capital; sector-by-sector (eight sectors11 on the whole) and cost sharing between the three levels of government. Interview with the OSSAP-MDGs reveals optimism that the costing would influence federal government’s budgeting and resource allocation processes. Level of Participation in the Preparation of NEEDS-1: The preparation of NEEDS-1 was anchored by a drafting team constituted by the National Planning Commission in 2003. The team comprised academics, industrialists, sector experts, finance experts, economists and government technocrats. Roles and responsibilities of the drafting team were structured along thematic issues –macroeconomic framework, sector policies, social and institutional climate, etc. The drafting team was given technical assistance by consultants under support of development partners. The consultants were charged with search for and collation of needed statistics and data from various ministries, departments and agencies, targeted reviews and documentation of literature, supplying the drafting team with data analysis feedbacks and conducting day-to-day management of the drafting process. On completion of the zero draft, the National Planning Commission sought and obtained inputs from the President and Federal Government Agencies. Based on these inputs and feedback, the zero draft was revised and presented to stakeholders in a forum attended by civil society, private sector and federal and state government agencies as well as development partners. In addition, inputs and feedback were obtained by electronic communication from the website dedicated to the drafting process. The first stage of consultation and feedback was followed by the revision of the zero draft by the drafting team. The resulting draft was then subjected to stakeholder reviews through consultative forums in the six geopolitical zones of the country. The stakeholder forums were instruments for eliciting the inputs and feedback from subnational actors – non-governmental organizations, private sector organizations, community-based associations and state governments’ agencies. Using the inputs and feedback from the stakeholder consultations, the drafting team produced yet another revised draft which was then presented to the Federal Executive Council for ratification. A final draft was produced after reflecting the inputs of the Federal Executive Council. Government officials and civil society practitioners differed on whether the process of preparing NEEDS was participatory or not. Government officials rated the process as participatory while civil society practitioners rated it as not participatory. About 75% of government officials say it was “very participatory”, while all the civil society officials say it was “not participatory”. The divergence of opinions underscores differential interpretation of ‘participatory processes’ between government and non-state actors and the need for measures to promote common understanding of what constitutes ‘participation’ in policymaking. 5.4 MDGs-contents of Needs-1, Needs-2 Vision 2020 In nominal terms, the MDGs were incorporated into the NEEDS-1 strategic goals which included poverty reduction, wealth creation, employment generation and value reorientation. The framework for achieving the goals consisted of four pillars: (i) growth and investment-oriented macroeconomic framework; (ii) growing the private sector through infrastructure development, credit, market reforms and policies to increase output, productivity and competitiveness of domestic producers; (iii) social empowerment including health and education sector reforms, water and sanitation; (iv) enhancing the efficiency and effectiveness 11. 12 Agriculture, Education, Energy, Environment, Health, Housing, Roads, Water and Sanitation.
  25. 25. of government by changing the way government does its work. Specifically, the NEEDS1 policy thrusts relating to MDGs were cast in broad national imperatives: empowering people through education, improving health, improving environmental health, tackling the HIV/AIDS challenge and developing affordable housing. Others are promoting employment creation for poverty reduction, empowering women, empowering youth and ensuring the welfare of children and strengthening safety nets. Each of these imperatives is further broken down into specific set of implementation measures/interventions. The measures cover institutional (legislative, regulatory) reforms, MDAs restructuring (roles/responsibilities, coordination/relationships and internal organization) as well as programme innovations. On its part, NEEDS-2 was a continuation of the vision, mission and strategies of NEEDS1, but with targets redefined for 2008-2011. With the perspective of being one of the top 20 economies by 2020, NEEDS-2 was anchored upon the strategic framework centered on reducing poverty by 30% in 2011. The avenues for the strategic goal included wealth creation and employment generation through promotion of domestic production and investments. The key tools for promoting domestic production, productivity and competitiveness included human capital development, infrastructure development, sound macroeconomic management, good economic governance, peace and security. The priority sectors included agriculture, manufacturing/SMEs, solid minerals and oil and gas. In addition, the included cross-cutting imperatives were science, technology and innovations, gender, youth, nutrition, HIV/AIDS, environment and employment. Government emphasized the achievement of MDGs as the centerpiece of the NEEDS-2 implementation strategy (NPC, 2007). Nigeria Vision 2020 encapsulates the key principles and thrusts of NEEDS-2 and the 7Point Agenda, situating both within a long-range planning perspective to year 2020. The strategic framework of Vision 2020 is underpinned by macroeconomic framework and critical policy priorities for guaranteeing the well-being and productivity of the people, optimizing the key sources of economic growth, fostering sustainable social and economic development and deepening government’s ability to consistently translate strategy into actions/results (NPC, 2009). The Vision 2020 explicitly integrates the MDGs (poverty, health, education, housing, sanitation, gender equality/women empowerment) within the strategic goal given as “guaranteeing the well-being and productivity of the people”. All government officials interviewed indicate that the country has a medium-term strategy (that is, NEEDS-1) to implement the MDGs-consistent national vision. About the major impetus for the MDGs-consistent national plan (NEEDS-1), the respondents indicated the following factors (in order of importance): new national orientation 57.1%, implementation of the UN Summit Outcome - 42.9%, increase in MDGs funding by development partners – 28.6%, – slow progress towards the targets -14.3%). In another vein, respondents were also asked their assessments of the bases for the MDGs-consistent national plan. The top-ranked factors are: national needs assessment (62.5%), assessment of fiscal space available for financing the MDGs – 12.5%, ten-year planning framework (37.5%), MDGs sector plans – 37.5%, 13
  26. 26. MDGs-based sector strategies – 62.5%, MDGs-based macroeconomic framework – 37.5%. 5.5 Macroeconomic Frameworks, Fiscal Policy and MDGs-based Planning: The Cases of Needs-1 and Needs-2 Macroeconomic and fiscal frameworks are critical signposts of national poverty reduction strategy or development plan (Klugman, 2002b). As an integral feature of MDGs-based strategy, MDGsconsistent macroeconomic framework should form the basis of national budgets and expenditure frameworks. A macroeconomic framework identifies how public expenditures and revenues relate to key macroeconomic variables, such as GDP growth, national savings rates, private investment, inflation and current account balances (UN Millennium Project, 2005b). Within the context of MDGs-based strategies, the macroeconomic framework is a valuable planning tool. With the macro-framework, planners can evaluate how growth arising from scaled-up MDGs public investments will impact on poverty-reduction as well as project key fiscal variables that determine domestic resource mobilization and MDGs financing strategy. Also, macroeconomic frameworks can forecast the impact of scaled-up MDGs spending on inflation and real exchange rates. Under NEEDS-1, alignment of public spending with MDGs hinged upon predetermined macroeconomic and fiscal framework. This is not consistent with the ideal MDGs-based planning which involves working backwards from the MDGs 2015 targets to defining the required policies, interventions and investments, the process provides credible up-front quantitative cost guides for macroeconomic framework and financing strategy. About 62.5% of the respondents indicated that NEEDS-1 was not based on a MDGs-consistent macroeconomic framework. This observation is consistent with hard evidence from evaluation of the process and content of NEEDS-1. Medium-term sector strategies and medium-term expenditure frameworks were situated within the macroeconomic framework espoused in Fiscal Strategy Paper 2005. In addition, the significant public finance management reforms adopted under NEEDS-1 include the establishment of oil price-based fiscal rule and creation of a stabilization fund for excess revenue from crude oil sales (known currently as Excess Crude Account), Fiscal Responsibility Act and the establishment of Virtual Poverty Fund, known as the Oversight of Public Expenditures on NEEDS (OPEN) using the Debt Relief Gains (DRGs). So far, there have been three successive Fiscal Strategy Papers including 2005-2007, 2008-2010 and 2010-2012. Nigeria’s Fiscal Strategy Papers (FSPs) set overall fiscal objectives and the policies to achieve these objectives including MDGs. It outlines a medium-term expenditure plan (MTEP), primarily concerned about how spending is allocated amongst spending MDA, statutory transfers and debt service over a 3-year period. FSPs outline reviews of fiscal and macroeconomic performance12 in the preceding periods and previews the reference period. Also, they mirror medium-term fiscal outlook including aggregate public revenues, aggregate spending and borrowings or savings, as well as define principles of quantitative resource allocations across sectors. Starting from the 2005 FSP, government adopted several principles notably average sustainable price of oil (oil price-based fiscal rule), budget deficit of not more than 3% of nominal GDP, deficit fiFor example, it was recognised that by 2003, up to 36% of government revenues were used for debt servicing and national public debt was about 79% of GDP. From 1999-2003, government budget deficits averaged 4.6% of GDP. Also during the period, annual growth in real GDP averaged about 3% while annual population growth was 2.8%, indicating that growth per capita was stagnant. The stock of external debts was US$ 32.9 billion as at 1 January 2004, with annual interest accrual of about US$ 1.4 billion. 12. 14
  27. 27. nancing not dependent upon borrowings from the Central Bank,13 envelope-based spending and allocation of up to two thirds of capital budget to the priority (including MDGs) sectors. With the framework of the Fiscal Strategy Paper, medium-term sector strategies and medium-term expenditure frameworks were adopted as planning tools for achieving the sectorlevel dimensions of NEEDS. Accordingly, the MTSS/MTEF process commenced during the 2005/2006 period. By the MTSS framework, projects within the budget ceiling of the Ministry are enumerated and key performance indicators developed for them. For example, beginning from 2005, MTSS/MTEF was prepared for health, education, agriculture, water resources and environment sectors/ministries, though in variable time sequence. The MTSS refers to hierarchies of goals, indicators and targets both from the MDGs framework and the NEEDS agenda in relation to the sector policy context. The MTSS of the Federal Ministry of Agriculture sets the broad sector context while linking its seven goals to MDGs and NEEDS. Specifically, the MTSS integrates MDGs 1, 7 8 and sets key performance indicators (KPIs) as basis to monitor and evaluate progress. In the case of the Federal Ministry of Health, the 2006-2008 and 2007-2009 MTSS integrate the health-related MDGs, giving detailed targets and concrete performance indicators. Similarly, like the preceding MTSS (2006-2008), the Federal Ministry of Education’s draft MTSS (2007-2009) incorporates five relevant MDGs14 within an 8-goals framework. In addition to organizing the 2007 budget along the MTSS priorities, attempts15 are made to link projects with output and outcomes through key performance indicators (KPIs) with statements regarding how and when the KPIs will be measured. All the respondents (100%) indicate that there have been budget process reforms to improve the efficiency of public sector financial management and public spending. About 70% of the respondents say the country has a medium-term budget framework or medium-term expenditure framework. Bolstering MDGs Spending through Debt Relief Gains (DRGs): Under NEEDS-1 and in line with the Fiscal Strategy Paper 2005, Nigeria negotiated debt relief from Paris Club of creditors, worth US$18 billion, in September 2005. The deal released roughly US$1 billion or N100 billion per year (otherwise referred to as the debt relief gains) for spending by the Nigerian Government. It was agreed that debt relief gains will be channeled, on an annual basis, to pro-poor spending for accelerating the achievement of MDGs. Specifically, the Federal Government committed to spending its share, that is, $0.75billion, for MDGs, based on implementation strategy tagged the Overview of Public Expenditure in NEEDS (OPEN), Nigeria’s equivalent of Virtual Poverty Fund (VPF). The VPF is a coding system within an existing budget classification structure that designates specific resources towards pro-poor projects and enables the tagging and tracking of such poverty-reducing spending. The OPEN initiative was based on a number of core principles: the debt relief funds as primarily catalyst for broader public expenditure reforms, given the fact that it constitutes a marginal portion of total government spending and also as key driver of resultsExpenditure envelopes impose spending ceilings within which government and its MDAs must operate. Within their respective ceilings, MDAs must cater for their personnel costs, overheads and capital expenditure. By this constraint, MDAs are compelled to prioritize resource allocation in order to achieve a right balance amongst competing needs, in line with criteria stipulated by the Budget Office. 14. They include: eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women, combat HIV/AIDS, malaria and other diseases and develop a global partnership for development. 15. Despite the attempts, the MTSS has been criticised as not having consistent array of linkages between activity, output and outcome. Because the links to outcome are not fully developed, the usefulness as M E tool is limited. 13. 15
  28. 28. based monitoring and evaluation framework for expenditure tracking and impact assessment. The debt relief fund was expected to provide an additional 5% of government expenditure for MDGs. Under the OPEN initiative, government adopted measures for tracking the efficiency and effectiveness of DRGs for MDGs-related expenditure. Accordingly, the federal government, in 2005, adopted the integrated accounting system16 to tag, track and monitor DRGs spending for MDGs, coinciding with the rolling out of the MTEF and MTSS processes, also during 2005. The DRGs cover 10 MDGs-related sub-heads: Health, Education, Water Resources, Power and Steel, Works, Agriculture, Environment, Women Affairs, Youth, Housing and Urban Development. The spending of DRGs takes place along two channels: Federal Government MDAs and State Governments (that is, the Conditional Grants Scheme. The DRGs spending by Federal Government MDAs is given as follows (Table 2). In terms of context, process and content, NEEDS-1 did not conform to MDGs-based planning. Despite evident attempts made to prioritise MDGs in the federal government’s fiscal, budget and policy arenas, NEEDS-1 lacked the integral ingredients of systematic MDGsbased planning. The missing ingredients include deliberate long-term planning outlook for MDGs 2015 targets, adequate participatory processes, MDGs-based macroeconomic and fiscal frameworks, MDGs needs assessment (costing) for investment planning and budgeting. It was expected that NEEDS-2 would learn from the MDGs pitfalls of NEEDS-1. But, the prospect of NEEDS-2 in tackling these gaps was diminished by the lack of MDGs-oriented evaluation of NEEDS-1, lack of political support for NEEDS-2 and the poor connections between the NEEDS-1 and the Seven-Point Agenda (which eventually succeeded NEEDS-1). Table 2: Actual Spending of Debt Relief Gains (N billion) 2006-2008 S/N AGENCY 2006 2007 2008 1 Health 20.2 (10.2) 16.06 (7.4) 22.80 (11.7) 2 Agriculture and Water (2006 For Water only) 16.5 0.85 15.50 3 Education 15.00 (9.9) 9.7 (4.7) 8.50 (3.9) 4 Environment 1.10 - 1.60 5 Housing 0.30 1.30 0.81 6 Power Steel 6.90 3.00 7 National Poverty Eradication Programme (NAPEP) - 8.00 8 FCT 9 Monitoring and Evaluation 4.00 0.86 1.10 1.70 1.50 Figures in parentheses show DRG expenditures as % of total sector budget of the federal government. Table 2 shows that DRG expenditures have been generally more intensive in the health sector. By this pattern, the DRG spending seems to be responding to the greater challenge of meeting the national health-related MDGs targets. Beginning from the 2006, the Office of the Accountant-General of the Federation (OAGF) adapted the Chart of Accounts to classify DRGs-funded MDGs line items. The Chart of Accounts is a series of codes that provide a unique label for every project, programme or allocation in the federal budget. The code of every project or programme funded by debt relief gains contains the digits 3500-3599 or 4500-4599. 16. 16
  29. 29. On the other hand, the DRGs disbursement to State Governments for qualified MDGs projects is given in Table 3 as follows. Table 3: Total Project Value of MDGs Conditional Grants Scheme Initiatives 2007-2009 State 2007 2008* 2009* Abia 290,000,000 1,735,144,020 1,959,037,070 Adamawa 267,700,000 950,487,450 501,249,076 411,594,706 1,695,000,000 Akwa Ibom Anambra 1,795,200,000 1,691,780,940 1,819,756,999 Bauchi 1,000,000,000 1,909,000,000 1,686,328,387 Bayelsa 1,586,161,314 1,603,133,363 Benue - 1,801,246,295 Borno 1,135,347,926 455,906,900 Cross River - 1,989,490,000 Delta 1,407,500,000 1,890,538,106 1,612,119,750 Ebonyi - 951,269,823 Edo 732,800,000 1,817,988,440 - Ekiti 2,054,300,000 1,749,999,916 - 762,827,000 1,727,104,405 Enugu FCT 1,708,900,000 1,586,262,454 - Gombe 698,200,000 1,909,665,272 1,287,370,456 1,969,515,636 1,924,165,292 Imo Jigawa 775,700,000 1,814,156,000 1,940,127,000 Kaduna 535,480,000 1,971,080,348 1,699,820,678 Kano 1,069,300,000 1,249,500,000 1,934,377,042 Katsina 648,000,000 1,836,558,924 1,977,876,402 Kebbi 1,640,437,300 1,448,565,300 Kogi 817,098,188 1,123,090,779 Kwara 1,468,650,858 1,599,960,000 Lagos 700,900,000 1,129,288,064 - Nasarawa 638,700,000 999,969,850 - Niger 1,004,580,938 1,813,065,416 Ogun 1,641,565,000 - Ondo 663,000,000 248,068,029 Osun 508,000,000 638,685,250 1,667,412,763 Oyo 1,882,593,696 850,198,641 Plateau 955,810,600 1,793,485,400 Rivers 1,807,800,000 626,340,000 Sokoto 822,926,600 605,989,027 Taraba 1,878,400,000 1,619,100,560 1,564,529,258 Yobe 489,700,000 1,770,913,080 753,715,160 Zamfara 1,216,000,000 1,957,814,132 515,159,006 Totals 18,414,780,000 48,797,842,568 43,174,957,717 *For 2008 and 2009, States are required to provide counterpart funding. Therefore the amounts listed are made up of 50% State contribution and 50% Federal Grant. For 2007, the amounts are all Federal Grants. 17
  30. 30. 6.0 Impact Of Federal Setting and Subnational Authorities on MDGs and MDGs-based Planning: Insights from Nigeria’s Experience 6.1 Concept vs Practice of “National Plan” in a Federal Setting Ideally, a national development plan (NDP) should be an embodiment of strategic priorities, policy thrusts and implementable programmes and projects for achieving predetermined national vision, goals and objectives. A national development plan should be truly “national”, politically in process and technically in content (Klugman, 2005a). By process, it is meant that the national development plan should have political ownership through effective participation and commitment of all stakeholders. By content, it is meant that the national development plan should be a comprehensive integrated framework of strategies, programmes and projects covering the entire country (see UN Millennium Project, 2005a; 2005b). In a unitary States, subnational authorities (for example, provincial and local) are, to a large extent, mere administrative or political extensions/appendages of the central government. As such, national development plan can be simply articulated by the central government, through participatory and consultative processes involving among others, lower administrative jurisdictions. So, in concept and reality, the “process” and “content” character of the national development plan are less complicated. But, in federal States, like Nigeria, subnational jurisdictions (particularly, state governments) have significant autonomy in budget and fiscal management and development policymaking. As such, the process of preparing a national development plan is neither simplistic nor straightforward. In ideal circumstances, a Nigerian national development planning should be anchored on intergovernmental bottom-up architecture. In content, the national development plan should not just be a mere aggregation or consolidation of the plans prepared by the Federal and all State Governments. Rather, it should be a synergistic synthesis17 of development plans of the Federal and all State Governments. In practice, however, Nigeria’s NDPs have to a large extent been prepared by the Federal Government, with variable participation by State Governments. This is not surprising. Most of Nigeria’s past NDPs were prepared under military governments which governed the country in the manner of unitary States. Under the setting, State Governments were mere appendages of the Federal Military Government. Though NEEDS represents a significant attempt at getting a truly national PRS for Nigeria, the SEEDS (state-level PRS blueprint) were just deA national development plan does not necessarily mean a single document, in a physical sense. The content can take various forms; it could have several interconnected components in separate documents. But, to be truly national, planning should be conducted through a single unified coordinated process. In Nigeria, the process of development planning appears to be more critical for assessing whether the plan is truly national, rather than the physical form of the national plan. National development planning should, in the Nigeria setting, be realised through bottom-up architecture (that is, effective mobilization and participation of subnational governments). The result will be synergistic and harmonious content that embodies state and federal governments’ plans. To realise a national plan, therefore, the plans of the federal government and those of all the state governments do not necessarily have to appear as a single document. 17. 18
  31. 31. rivatives/offshoots, rather than foundations/building blocks of the national blueprint. In both process and content, NEEDS lacked the essential bottom-up planning architecture that should underpin the NDP process in federal setting like Nigeria. Current national development planning processes including the Vision 2020 and Vision 2020 1st Implementation Plan 2010-2013 have however attempted to overcome this bottom-up approach. The Vision 2020 blueprint has been prepared based on synthesis of Vision 2020 reports by the various States18 of the country. In similar vein, the process of formulating the Vision 2020 1st Implementation Plan 2010-2013 reflects attempt in bottom-top approach. However, the ‘theoretical ideal’ whereby the national plan is the culminated synergy of Federal and State Governments’ plans is, in reality, constrained by institutional weaknesses, particularly in inter-governmental coordination. 6.2 Policy Decentralisation and MDGs: The Nigeria Experience Given its federal setting, Nigeria is characterized by policy decentralization. State Governments operate within constitutionally determined autonomous policy spheres in relation to the federal government. Considerable literature emphasizes political and economic arguments for fiscal federalism. Political arguments often relate to the merits of dealing with heterogeneity (e.g. multiple ethnic nationalities and regional differentiation) within countries and the imperative of accountable, responsive and effective governance. On the other hand, economic rationale is usually based on the need to streamline fiscal stabilisation, distribution and allocation responsibilities and policies (Musgrave and Musgrave, 1984) and to promote equitable and efficient use of public resources (Alade et al., 2003). Policy-and-fiscal decentralization poses major challenges for coordination between the central and subnational governments. The actions and/or inactions of the Federal and State Governments may directly or indirectly affect the subnational governments and vice versa (Ajakaiye, 2008). The sharing/exercise of revenue and spending powers and responsibilities are prone to tensions or conflicts that could be counter-productive. The Nigeria example is instructive. Fiscal decentralisation allows autonomy for State and Local governments to decide expenditures for providing public services. Moreover, more than half of consolidated public spending (including for MDGs) is accounted for by states and local governments. But, over the years, the lack of fiscal coordination between the central and subnational authorities tended to undermine sound public spending, macroeconomic stability and sustainable economic growth. It is often argued that there is lack of correspondence between the spending responsibilities and tax powers/revenue sources assigned to the different levels of government (Ajakaiye, 2008; Ekpo and Englama, 2008). As a federation comprising the federal government, 36 state governments, federal capital territory (FCT) and 774 local governments, Nigeria has 812 distinct political jurisdictions, which are tantamount to 812 politico-economic decision-making centres. The Nigerian Constitution 1999 allocates roles and responsibilities across the federal, state and local governments. The Exclusive List contains the functions reserved for the Federal Government only. On the Concurrent List, both the Federal and State governments could function, however, when there is a conflict, the Federal Government shall prevail. The functions reserved for the states are found in the Residual List; they are functions not assigned State Governments set up Stakeholder Development Committees to articulate and formulate their respective Vision 2020 drafts which formed inputs for the National Vision 2020 blueprint. 18. 19
  32. 32. to Local Governments and neither contained in the Exclusive and Concurrent Lists. Many public services bearing on the MDGs (for example, health, education, agriculture, environment), are statutorily concurrent responsibilities of the federal, state and local governments. Public services which impact on the MDGs are the concurrent responsibilities of the Federal, State and Local Governments. The public services include education, health, water and electricity infrastructure, poverty alleviation, social security and economic development. Given the preoccupation of the federal government with universal issues like defence, security, foreign affairs, currency management, immigration, export and import trade regulations and macroeconomic policies, the balance of the challenges of MDGs such as education, health and poverty reduction tilts to the subnational governments. The situation raises the risks of policy overlapping and wasteful expenditure duplication, if there is no strong intergovernmental coordination. Some national policy reviews have shown that state governments lag behind in policy and institutional reforms for promoting the MDGs. Despite recent examples of the federal government, many State Governments still lack strong institutional framework needed to effectively mobilise and utilise public resources and to enhance public service delivery for the MDGs. Policy-fiscal decentralization has double-edged implications for the achievement of MDGs in federal settings. This counteracting nature of the implications is exemplified by the fact that Nigeria’s federal setting poses both opportunities and challenges for achieving the MDGs.. Achieving the MDGs can be hindered or accelerated depending upon policy synergy and complementarity between the Federal, State and Local Governments. On the one hand, fiscal decentralization enhances the powers, responsibilities and abilities of subnational jurisdictions (State and Local Governments) to provide basic social and economic services (including MDGs) to the grassroots. Because Nigeria’s State and Local Governments ideally should be closest to the people and more easily held accountable for providing basic public services, their actions or inactions impact greatly impact on the MDGs. On the other hand, the autonomy enjoyed by the State and Local Governments increases the risks of coordination problems in planning and policy development. Without corresponding levels of good governance, fiscal accountability and policy responsibility at the state level, decentralisation per se will not effectively promote the achievement of the MDGs. Governance capacity, institutional coordination and effective service delivery are therefore crucial if state governments are to significantly accelerate the march to the MDGs. MDGs-oriented reforms of the federal government could be compromised by lack of corresponding/complementing policies and programmes at the state and local levels. But, it is doubtful that these preconditions are currently evident in the present Nigerian situation. 6.3 Subnational Jurisdictions and MDGs Spending Like other countries practicing fiscal federalism, Nigeria is characterized by the distribution of revenue powers and spending responsibilities among the Federal, State and Local Governments. Currently, subnational (state and local) governments account for significant chunk of public spending in Nigeria. The share of sub-national budget spending in 20
  33. 33. the consolidated public spending increased from 23 percent in 1999 to 46 percent in 2005 (World Bank, 2007). Moreover, estimates show that sub-national budget spending in 2005 was almost four times higher in real terms than the 1999 level. According to some statistics on inter-governmental fiscal relations,19 State and Local Governments together, on the average, accounted for 52.34% of total annual public expenditure within the period 2003-2007. In 2008, the States and Local Governments’ share rose to 57.6% of total public spending. On the average, State and Local Governments together, accounted for 59.97% of total annual capital spending and 48.24% of total annual recurrent spending from 2003-2007. At the sector level, State Governments alone accounted for 53.88% and 51.76% of total public spending on education and health from 2003-2007. Further details are given in Table 4 as follows. Table 4: Relative Size of Education and Health Expenditures of Federal and State Governments Expenditure type 2003 2004 2005 2006 2007 2003-2007 average Capital and recurrent expenditure on education by all governments 181.09 200.36 271.22 328.8 369.45 270.184 Federal Government share (N’ billion) 79.5 85.6 114.7 151.7 205.2 127.34 Federal Government share (%) 43.90 42.72 42.29 46.14 55.54 46.12 State Governments’ share (N’ billion) 101.59 114.76 156.52 177.1 164.25 142.844 State Governments’ share (%) 56.10 57.28 57.71 53.86 44.46 53.88 Capital and recurrent expenditure on health by all governments 91.92 119.56 169.08 197.33 217.27 159.032 Federal Government share (N’ billion) 39.7 52.4 77.5 94.5 131.4 79.1 Federal Government share (%) 43.19 43.83 45.84 47.89 60.48 48.24 State Governments’ share (N’ billion) 52.22 67.16 91.58 102.83 85.87 79.932 State Governments’ share (%) 56.81 56.17 54.16 52.11 39.52 51.76 Source: Central Bank of Nigeria Annual Reports, 2003-2007 Table 4 shows decrease in State Governments’ share of total health and education spending from 2005-2007. The trend is linked to the increased proportion of federal government in total health and education spending, largely on account of the OPEN initiative. For instance, the OPEN initiative reined in additional federal government MDGs spending of about N99.91 billion and N109.47 billion in 2006 and 2007, respectively. In spite of the boost to federal government MDGs spending since the start of the OPEN initiative, the subnational (state and local) governments remain very crucial, as revealed by the relative shares of Federal, State and Local Governments in aggregate national public spending from 2003-2007, as given in Appendix III. The impact of subnational governments would even be greater if the expenditures of local governments on education and health are taken into account.20 But, while fiscal decentralizaCentral Bank of Nigeria (CBN). Annual Report and Statement of Accounts for the year ending 31st December 2007. The expenditures of local governments were not included due to paucity of data. The data problem is symptomatic of severe fiscal capacity gaps in the local government system. Also, there are spending distortions arising from variable spending relations between state governments and their constituent local governments. 19. 20. 21
  34. 34. tion has enhanced the funds available for state governments to deliver public services, the gains for MDGs are largely muted. This is because increased availability of budgetary resources and public spending by state governments has not translated into better service delivery and human development (World Bank, 2007).21 No doubt, achievement of the MDGs 2015 targets will require enhanced cost efficiency of expenditures at all levels of government. But, the challenge of improving the quality of budget expenditure is more acute at the state level due to additional capacity constraints and slower progress of public financial management reforms. 6.4 Localisation of MDGs: The Role of Subnational Jurisdictions Using the Seeds-leeds Example Need for localization of MDGs: Localizing MDGs-based planning is an important precondition for the national achievement of MDGs targets. The localization of MDGs is a logical imperative of policy and fiscal decentralization. Moreover, the high levels of variability in MDGs-related indicators across Nigerian States provide legitimate grounds for localised plans that domesticate the global MDGs targets. The variability of MDGs status and related indicators across Nigerian states is given in Appendix IV. The regional dimensions of the variability are given in Table 5, as follows: World Bank, (2007). Nigeria: A Fiscal Agenda for Change – Public Expenditure Management and Financial Accountability Review. Abuja 21. 22
  35. 35. Table 5: MDGs-Related Indicators Across Nigeria’s Six Geopolitical Regions22 MDGs indicator Geopolitical zone NorthWest NorthEast NorthCentral SouthWest SouthSouth SouthEast One dollar per day poverty (%) 61.2 64.8 58.6 40.2 47.6 31.2 Relative poverty (% ) 71.2 72.2 67.0 42.0 35.1 26.7 Inequality (Gini index - %) 38.9 39.8 46.1 40.6 39.4 38.7 Percentage of women aged 15-24 years that are literate, 2007 21.2 8.7 55.6 87.4 81.0 87.5 Gender parity index for primary school – ratio of girls to boys – net attendance ratio, 2007 0.82 0.84 0.98 0.99 0.99 0.99 Gender parity index for secondary school – ratio of girls to boys – net attendance ratio, 2007 0.68 0.71 0.90 0.98 1.03 1.02 Net primary school completion rate 17.6 6.4 41.0 59.7 62.1 49.8 Percentage who reach grade 5 of those who enter 1st grade, 2007 93.8 89.0 94.4 98.0 96.9 96.7 Secondary school net attendance ratio - % of children of secondary school age attending secondary or higher school, 2007. 30.1 8.1 58.7 78.3 72.3 69.8 Primary school net attendance ratio for girls 43.5 12.5 82.8 97.0 95.8 95.7 Secondary school net attendance ratio for girls 23.8 6.6 55.6 77.4 73.4 70.4 % of women delivered in health facility 9.1 16.4 41.9 73.0 51.3 74.9 Vaccination coverage for 1-year old 13.6 21.1 19.8 50.6 38.7 54.6 % of children aged 12-23 months currently vaccinated against childhood diseases, 2007 3.2 1.0 28.9 36.3 20.8 20.4 Infant mortality rate (per 1000 live births) 101 96 74 64 71 88 Under five mortality rate (per 1000 live births) 166 157 117 99 111 142 HIV prevalence rate 3.5 4.3 6.1 2.6 5.3 4.7 % of household using improved sources of drinking water 42.5 27.3 42.2 72.7 54.1 54.1 % of household using sanitary means of excreta disposal 34.1 34.4 29.6 55.0 54.3 55.5 Source: Derived from NBS MICS, CWIQ, Poverty Profile of Nigeria, MDGs Reports. As shown in Table 5, poverty incidence is 31% in the southeast compared to 72% in NorthEast zone. Literacy rate of females between 15-24 years old is 8.7% in North-West zone, compared to 87% in the South-West zone. Infant mortality rate is 101 per 1000 in North-West zone compared to 64 per 1000 in South-West zone. Primary school net attendance ratio for girls is 12% in northeast compared to 95% in South-South zone. The high regional disparity in MDGs and related indicators underscores two lessons. One is that a simplistic aggreSources: Nigeria Poverty Assessment, 2007. National Bureau of Statistics and the World Bank. December 2007; Core Welfare Indicator (CWIQ) Survey, 2006. National Bureau of Statistics and Epidemological Fact Sheet on HIV and AIDS: 2008 Update. WHO, UNIAIDS, UNICEF. 22. 23
  36. 36. gate picture of progress towards the national MDGs targets could be misleading. Two is that there is large scope for subnational (regional and state-level) MDGs-based planning and implementation not just for achieving the national MDGs targets, but also in an inclusive manner. MDGs in State Governments’ Medium-term Plans: Since 2004, State governments have formulated/implemented MDGs-oriented plans/policies, otherwise called the State Economic Empowerment and Development Strategies (SEEDS). In line with NEEDS, sub-national governments (state and local governments) were encouraged to develop their MDGs-based medium-term plans – SEEDS for state governments and LEEDS for local governments. Conscious of Nigeria’s federal setting, SEEDS was conceived as derivatives or complements, rather than as subsets of the federal plan – the NEEDS. The process was launched at the Joint Planning Board (JPB) in 2003. A SEEDS manual was produced in early 2004 to guide state governments in preparing SEEDS blueprints. By 2005, every state government had either prepared or was completing the preparation of the SEEDS document. State and Local Governments were given technical assistance and capacity building for the preparation of their respective SEEDS and LEEDS documents. State governments retained the autonomy to determine their development priorities and economic policies within the context of unifying guiding framework developed by the federal government.23 The rationale was that NEEDS will have have limited impact if state and local governments (who play dominant roles in poverty reduction and public service delivery) fail to adopt corresponding MDGs-oriented economic plans that complement federal-level efforts. The SEEDS process represented a bold step towards localization of MDGs and fostering national consensus as well as intergovernmental coordination and synergy in development planning. All respondents (100%) indicated that there is awareness of the MDGs at the sub-national levels and that sub-national governments have their own development plans. In the same vein, 100% of the respondents stated that they agreed that the national development strategy is framed by constitutional division of “policy formulation responsibility”, “revenue or tax jurisdictions” and “spending responsibilities” across national and sub-national governments. All the respondents indicated that the sub-national plans are MDGs-consistent. 7.0 Monitoring, Evaluation and Reporting Of MDGs 7.1 MDGS Monitoring Evaluation is Crucial In order to assess if a national poverty reduction strategy or national development plan is effective for achieving the MDGs, it is necessary to establish systems to monitor progress and evaluate outcomes and impacts against outputs and inputs. Monitoring and evaluation (M E) is vital for ensuring accountability, transparency and effectiveness of poverty reducing and MDGs spending. The function of M E is to track key indicators over time and space and to ascertain if they change as a result of the national poverty reduction strategy or national development plan (Klugman, 2005a). Also, impact evaluations are needed to inform policymakers and stakeholders on which interventions and programmes have been effective and 23. Though SEEDS is offshoot, not subset of NEEDS, it retains the NEEDS framework 24

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