Document of The World Bank

Report No: ICR0000882

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-33450)

ON A

{LOAN/CREDIT}

IN THE AMOUNT OF SDR 14.4 MILLION (US$ 20.0 MILLION EQUIVALENT)

TO THE

REPUBLIC OF NIGERIA

FOR AN

ECONOMIC MANAGEMENT CAPACITY BUILDING PROJECT

June 26, 2008 Poverty Reduction and Economic Management Africa Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

ii

CURRENCY EQUIVALENTS

(Exchange Rate Effective April 21, 2008)

Currency Unit = Nigerian Naira (NGN) NGN 1.00 = US$ 0.00852 US$ 1.00 = NGN 117.296

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AuGF Auditor General of the Federation ASC Audit Service Commission BB Bank Administrative Budget BMPIU Budget Monitoring and Price Intelligence Unit of the Presidency CBN Central Bank of Nigeria CFAA Country Financial Accountability Assessment CPAR Country Procurement Assessment Report CPI Consumer Price Index CPS Country Partnership Strategy CWIQ Core Welfare Indicator Questionnaire DFID Department for International Development of the United Kingdom DMD Debt Management Department of the CBN DMO Debt Management Office EFD External Finance Department of the FMF EMCAP Economic Management Capacity Project EMTAP Economic Management Technical Assistance Project EPCC Economic Policy Coordination Committee ERGP Economic Reform and Governance Project EU European Union EC European Commission FGN Federal Government of Nigeria FIRS Federal Inland Revenue Service of the FMF FMJ Federal Ministry of Justice FMF Federal Ministry of Finance FOS Federal Office of Statistics GDDS General Data Dissemination Standard GDLC Global Distance Learning Center HOS Head of Civil Service of the Federation of Nigeria IFEMIS Integrated Financial and Economic Management System ISR Implementation Status Report KPI Key Performance Indicator M&E Monitoring and Evaluation MTR Mid-Term Review

iii

MULT Multilateral Institutions Department of the FMF NASS National Assembly of Nigeria NAO National Authorizing Officer NBS National Bureau of Statistics NEEDS National Economic Empowerment and Development Strategy NPC National Planning Commission NNPC Nigerian National Petroleum Corporation OAGF Office of the Accountant General of the Federation, FMF OAtGF Office of the Attorney General of the Federation OAuGF Office of the Auditor General of the Federation OCJ Office of the Chief Justice PAC Public Accounts Committee PAD Project Appraisal Document PBPD Plan Budget and Policy Department of the NPC PCU Policy Coordinating Unit of the FGN PDO Project Development Objective PEAs Project Executing Agencies PER Public Expenditure Review PHRD Japan Policy and Human Resources Development PIP Public Investment Program PRS Planning, Research and Statistics Department of the FMF PU Project Unit SC Steering Committee SCN Supreme Court of Nigeria USAID United States Agency for International Development

Vice President: Obiageli Katryn Ezekwesili Country Director: Onno Ruhl Sector Manager: Jan Walliser Task Team Leader: Gregory Taiwo Nzekwu ICR Team Leader: Hawa Cisse Wague

iv

REPUBLIC OF NIGERIA

ECONOMIC MANAGEMENT CAPACITY BUILDING PROJECT

(EMCAP)

Contents

Page A. Basic Information................................................................................................................................... v B. Key Dates ............................................................................................................................................... v C. Rating Summary..................................................................................................................................... v D. Sector and Theme Codes....................................................................................................................... vi E. Bank Staff.............................................................................................................................................. vi F. Results Framework Analysis ................................................................................................................ vii G. Ratings of Project Performance in ISRs ............................................................................................. viii H. Restructuring (if any) .......................................................................................................................... viii I. Disbursement Profile ............................................................................................................................. ix 1. Project Context, Development Objectives and Design..........................................................................1 2. Key Factors Affecting Implementation and Outcomes .........................................................................4 3. Assessment of Outcomes .......................................................................................................................7 4. Assessment of Risk to Development Outcome....................................................................................12 5. Assessment of Bank and Borrower Performance ................................................................................12 6. Lessons Learned...................................................................................................................................14 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners......................................16 Annex 1. Project Costs and Financing.......................................................................................................17 Annex 2. Outputs by Component...............................................................................................................18 Annex 3......................................................................................................................................................22 Annex 4. Bank Lending and Implementation Support/Supervision Processes..........................................23 Annex 5. Beneficiary Survey Results (if any) ...........................................................................................25 Annex 6. Stakeholder Workshop Report and Results (if any) ...................................................................26 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR.................................................27 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................................................28 Annex 9. List of Supporting Documents ...................................................................................................29 Annex 10: Indicators in the PAD, DCA and ISR .....................................................................................30

v

A. Basic Information

Country: Nigeria Project Name:

ECONOMIC MANAGEMENT CAPACITY BUILDING PROJECT

Project ID: P065301 L/C/TF Number(s): IDA-33450 ICR Date: 06/08/2008 ICR Type: Core ICR Lending Instrument: TAL Borrower: Original Total Commitment:

XDR 14.4M Disbursed Amount: XDR 13.9M

Environmental Category: C Implementing Agencies: Federal Ministry of Finance, NPC, OAGF, OAuGF, PRS, MULT, NBS, HOS, NASS, SCN, and OAtGF. Cofinanciers and Other External Partners: DFID, European Union, and USAID

B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 10/01/1998 Effectiveness: 07/07/2000 07/07/2000 Appraisal: 06/21/1999 Restructuring(s): N/A N/A Approval: 05/11/2000 Mid-term Review: 09/15/2002 11/15/2002 Closing: 12/31/2005 12/30/2007

C. Rating Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Moderately Satisfactory Overall Borrower Moderately Satisfactory

vi

Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments (if

any) Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

Satisfactory

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes Original Actual

Sector Code (as % of total Bank financing) Central government administration 89 Law and justice 11

Theme Code (Primary/Secondary) Economic statistics, modeling and forecasting Primary Judicial and other dispute resolution mechanisms Secondary Other accountability/anti-corruption Primary Public expenditure, financial management and procurement Primary

E. Bank Staff Positions At ICR At Approval

Vice President: Obiageli Katryn Ezekwesili Callisto Madavo Country Director: Onno Ruhl Mark Tomlinson Sector Manager: Jan Walliser Cadman Atta Mills Project Team Leader: Gregory Taiwo Nzekwu Jose Sokol ICR Team Leader: Hawa Cisse Wague ICR Primary Author: Abdoulaye Bamba

vii

F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) As stated in the project appraisal document (PAD), the overall objective of the project was to strengthen economic governance in key institutions by achieving the following 4 project development objectives (PDO): (a) fostering greater transparency and accountability in fiscal operations, (b) strengthening the systems designed to improve the efficiency of resource use, while discouraging - via public transparency - those elements that have deterred such efforts in the past, (c) improving the quality and timeliness of data for economic and social analyses, as well as their wide dissemination, and (d) enhancing the capacity to carry out, coordinate, and monitor macroeconomic and structural policies. These PDOs were consistent with the Federal Government of Nigeria’s development objectives, and with the Bank and other donors support programs, which stressed the importance of governance and capacity building for alleviating poverty and promoting sustainable economic growth. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) ─ from Project Appraisal Document (Indicators pre-populated from the ISR) Baseline Values from Project Outcome Indicators/Date of Value (from approval documents) The table will be pre-populated from the last ISR. (b) Intermediate Outcome Indicator(s) The table will be pre-populated from the last ISR

viii

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 12/26/2000 Satisfactory Satisfactory 1.51 2 06/28/2001 Satisfactory Satisfactory 3.38 3 01/16/2002 Satisfactory Satisfactory 5.41 4 06/05/2002 Satisfactory Satisfactory 6.03 5 12/03/2002 Satisfactory Satisfactory 8.31 6 05/22/2003 Satisfactory Satisfactory 9.59 7 12/30/2003 Satisfactory Satisfactory 11.47 8 05/28/2004 Satisfactory Satisfactory 12.29 9 12/16/2004 Satisfactory Satisfactory 14.08

10 04/14/2005 Satisfactory Satisfactory 15.00 11 12/22/2005 Satisfactory Satisfactory 17.16 12 06/29/2006 Satisfactory Satisfactory 18.12 13 01/19/2007 Satisfactory Satisfactory 18.46 14 06/09/2007 Satisfactory Highly Satisfactory 18.46 15 12/19/2007 Satisfactory Satisfactory 19.32 16 12/27/2007 Satisfactory Satisfactory 19.32

H. Restructuring (if any) Not Applicable

ix

I. Disbursement Profile

1

1. Project Context, Development Objectives and Design 1.1. Context at Appraisal Country/sector background. In spite of considerable revenues from oil exploration, Nigeria is still one of the poorest nations in the world. Sound macroeconomic reforms initiated in the mid-eighties were abandoned by the middle of the nineties, leading to years of slow growth, high inflation, and a decline in per capita income. Key public institutions had extremely low economic and financial management capacity. These weaknesses, coupled with widespread mismanagement and corruption, undermined Nigeria’s economic growth prospects and hurt the government’s ability to design, implement and enforce economic policies effectively. In 1999, the new democratically-elected president undertook vigorous measures to deter corruption and restore public confidence. Rationale for Bank Assistance. EMCAP was aligned with both the newly-elected government’s priorities and donor support programs which included strengthening economic governance, spurring economic growth and focusing public expenditures on poverty reduction. Both the FGN and donors identified massive corruption and poor economic management as key constraints to rapid economic growth and poverty reduction objectives. EMCAP was designed to support the FGN in dealing with these constraints. By restarting its lending program to Nigeria, the Bank also helped the FGN engage with the international donor community. 1.2. Original Project Development Objectives (PDO) and Key Indicators (as approved) The project development objectives identified in the PAD are: (a) fostering greater transparency and accountability in fiscal operations, (b) strengthening the systems designed to improve the efficiency of resource use while discouraging - via public transparency - those elements that have deterred such efforts in the past, (c) improving the quality and timeliness of data for economic and social analyses as well as their wide dissemination, and (d) enhancing the capacity to carry out, coordinate, and monitor macroeconomic and structural policies. The key performance indicators identified in the PAD are: (a) detailed corruption surveys; (b) uniform periodicity, transparency, and reliability of published fiscal data; (c) evaluation of public expenditures as well as strengthening of sound procurement, accounting, and auditing practices; and (d) vigor and robustness of enforcement actions involving corruption incidents. The outcome/impact indicators in the PAD are: (a) first phase of IFEMIS in place and publish data; (b) solid economic justification for capital projects; (c) publication of timely economic, social and poverty data; (d) publication of candid OAuGF audits; (e) penalties for major violators; and (f) completion of joint reviews.

2

1.3. Revised PDO and Key Indicators

The PDOs and key indicators were not revised. However, the PDO indicators and key indicators monitored by the supervision team are slightly different from the key indicators in the PAD. The ICR focuses on indicators identified in the PAD and those monitored by the supervision team as the latter were relevant to assess the achievement of PDO. 1.4. Main Beneficiaries, Original and Revised The main beneficiaries of the project are key institutions of the federal government. The primary target groups as identified at appraisal included the Federal Ministry of Finance (FMF); agencies within the FMF such as the Office of the Accountant General of the Federation (OAGF), Office of the Auditor General of the Federation (OAuGF), PRS, MULT, Federal Office of Statistics (FOS) (now National Bureau of Statistics (NBS), Head of Civil Service of the Federation (HOS), National Assembly of Nigeria (NASS), Nigerian National Petroleum Corporation (NNPC), National Planning Commission, the Supreme Court of Nigeria. As the operation unfolded, some states and local governments would benefit through support to the national and state assemblies. Secondary beneficiaries included the Nigerian population. Indeed, enhanced economic governance and sound financial management were likely to ultimately lead to efficient delivery of public goods and services as well as reduction in poverty. Other stakeholders, public and private, would also benefit from the Project. In particular, new investors would gain from the implementation of the recommendations of studies on Private Sector development. 1.5. Original Components (as approved) Component 1: Improvement of Statistics - $8.5 million (under the former FOS, now called NBS). This component included assistance to the FOS to strengthen its capacity to improve the quality of the statistical base and the timeliness of the information releases. It focused specifically on national accounts, consumer price index (CPI), and poverty and social sector data, with the objective of bringing Nigeria into full compliance with the General Data Dissemination Standard (GDDS). Component 2: Improvement and Monitoring of Public Expenditure - $2.9 million (under National Planning Commission (NPC) and Federal Ministry of Finance (FMF) through budget office). This component focused on strengthening the prioritization, allocation, and monitoring of public expenditures. It provided local and external technical assistance to the NPC with the participation of the Budget Office, and it formed the basis for an annual Public Expenditure Review (PER) exercise which should be tied to the budget cycle within the context of a rolling three-year public investment program and a medium-term expenditure framework. Expectations were for this component to help improve the publication of annual budgetary outcomes, summary revenue, and expenditure data. The strengthening of FMF and that of the NPC’s capacity to monitor the execution of the public investment program were also two expected outcomes of this component. Component 3: Monitoring and Accounting of Fiscal Operations - $7.0 million (under the Office of the Accountant General of the Federation (OAGF), and the Office of the Auditor General of the Federation (OAuGF)). This component supported oversight institutions in their promotion of transparency and accountability in the public sector, including the dissemination of data on fiscal operations. It provided assistance in the areas of accounting and internal auditing (OAGF) and external auditing (OAuGF), and budget monitoring activities of the National Assembly. This component sought to help the OAGF in some of its key statutory functions, specifically as they relate to bringing

3

the fiscal accounts of 1994 to 1998 up-to-date and ensuring the completion of the 1999 accounts (and the subsequent years). Component 4: Petroleum Sector Review - $3.5 million (under Federal Ministry of Petroleum). This component sought to fund a comprehensive review of the petroleum sector covering financial, operational, technical, legal, and contractual aspects, as well as reforms of key institutions of the sector. Component 5: Strengthening the Procurement Activities in the Public Sector - $2.9 million. The component sought to undertake a review of procurement practices at the federal and state levels (including some government-sponsored enterprises), and a review of financial accountability systems (i.e., the state of accounting and audit practices) was also part of the component. Component 6: Strengthening Policy Development Capabilities $8.9 million (under various ministries and agencies). This component aimed at enhancing policy analysis capacity and improving the efficiency and transparency of policy design and coordination in the FGN. To this end, financing was provided for technical assistance to undertake studies/reviews in the area of civil service reform, fiscal federalism, tax policy analysis, transparency surveys and audits, trade policy, and other aspects of economic governance such as an investor roadmap and internet technology. The component also sought to fund the establishment of a distance learning center to help policy makers to learn from experience around the world. Component 7: Information Management System - $2.5 million (under various departments and agencies: FMF, OAGF, NPC and the Central Bank of Nigeria (CBN). This component dealt with the design and implementation of a financial management system linking key government departments and providing them with comprehensive and integrated financial information (IFEMIS). It was expected that IFEMIS would provide timely, consistent and accurate information for the production of monthly, quarterly, and yearly fiscal accounts. Component 8: Strengthening the Legal and Judicial Systems - $2.9 million (under the Office of the Attorney General of the Federation (OAtGF), and the Office of the Chief Justice (OCJ)). The component provided support to the OAtGF and OCJ in carrying out preliminary diagnostic studies on the constraints impeding the proper functioning of the legal and judicial systems. It was expected that the results of these studies would lead to the formulation of a comprehensive legal and judicial reform program aimed at improving the performance of the legal sector. Component 9: Support for the Project Unit - $2.8 million (under the Multilateral Department of the FMF), the Project Unit (PU) acted as the Secretariat of the project Steering Committee SC for capacity building for economic matters and coordination issues. 1.6. Revised Components Due to its urgency, the Petroleum Sector Review - Component 4 - was dropped from EMCAP financing in 2000 and funded out of the Bank’s administrative budget (BB). The Petroleum Sector Review was completed in 2000, and its original EMCAP funding allocation was used to provide other components with additional funds and compensate for exchange rate losses. This ICR reports on the remaining 8 components.

4

1.7. Other significant changes There were a number of significant changes pertaining to funding allocations and the project's schedule. With respect to funding allocations, the resources for the Petroleum Sector Review component, supplemented with the allocation for contingencies, were reallocated as follows: (i) US$800,000 for civil works of the GDLC building; (ii) US$500,000 for the value-for-money audits; (iii) US$400,000 for the IFEMIS studies; (iv) US$250,000 for the establishment of the BMPIU; (v) US$1,800,000 in US$/SDR exchange rate losses. An appreciated value of SDR vis-à-vis the US$ in the last few months of the life of the Project (June-December 2007), caused an increase in available US dollar funds for the Project. A US$0.4 million PHRD grant fund from the Government of Japan, which was intended to finance the preparation activities of the IFEMIS, lapsed due to non-utilization. The grant was subsequently cancelled and the Bank compensated for the loss. The EU increased its initial resource allocation for EU-EMCAP components by 20 percent, essentially support the relocation of FOS staff from Lagos to the new offices in Abuja. The ceiling on the funds was also increased by 20 percent. Regarding the project's schedule, the closing date was extended by two years, from June 2005 to December 2007. This change was approved in order to allow for the completion of the construction of the GDLC facility. 2. Key Factors Affecting Implementation and Outcomes 2.1. Project Preparation, Design Stage, and Quality at Entry The project was comprehensive in tackling constraints in various areas relating to economic governance, and was well aligned with overall government objectives. The Project Appraisal Document (PAD) provided a sound background analysis and a solid understanding of the main sector issues, and helped identify appropriate measures to improve economic governance in Nigeria. It took stock of an earlier Bank project (EMTAP), and incorporated important lessons from other successful World Bank operations in Sub-Saharan Africa. The project adopted a comprehensive approach, dealing with weaknesses in areas of economic and policy analysis, financial management, and information systems. It was also designed in a way that allowed stakeholders to be involved in the process. The shortcomings on the project design is relating to the arrangement of donors coordination through parallel disbursements. The weaknesses relating to donors coordination (see section 2.2.1.) delayed the implementation pace and caused some shortcomings in achievement of the PDOs. At appraisal, the project was rated highly risky. The main risks were appropriately identified, some were mitigated by dialogue. But others such as weak capacity of implementing agencies delayed project implementation. 2.2. Implementation This assessment draws on strengths and shortcomings. Positive factors included the good quality of cooperation between Government and the project supervision team, and the unanticipated relocation of NBS staff from Lagos to a convenient working space in Abuja. Furthermore, as discussed in section 5.1.2, the midterm review (MTR) and other supervision missions were thorough and helpful in keeping the project on track.

5

On the less positive side, implementation and project outcomes were affected by factors outside the control of the government and factors subject to government control. 2.2.1. Factors outside the control of government or implementation agency: Multiple donors funding through multiple disbursement processes, and weak coordination among donors: The project adopted a parallel financing approach, which afforded donors the flexibility of setting up and following their own internal rules. But, this flexibility created a multitude of redundant and sometimes confusing requirements of accessing each fund, and resulted in a set of inconsistent management processes and reporting systems, . While in the PAD it is stated that the PU was mandated to manage the overall EMCAP, EU and DFID had their own arrangements; the team could not develop common arrangements and concerted actions to address issues. The project accountant was also unable to provide consolidated financial information due to all this lack of coordination. Although coordination was tightened following the midterm review, these initial deficiencies caused delays especially in the EU components which also suffered from high turnover among the consultants/ experts working on the project. Delay in fund availability: Donor funds were not always available in a timely manner. In September 2003, for example, the supervision mission noticed that NAO, the authorizing officer for the EU components, was taking more than five months to approve proposals and requests made by PEAs, causing substantial delays not only in the commencement of certain activities, but also in the payments for activities already carried out. 2.2.2. Factors generally subject to government control: Absence of an effective Steering Committee. The SC led by the Federal Minister of Finances was expected to meet once a month and oversee the project implementation stage, technical issues, and other capacity building efforts. The committee could have dealt with unforeseen technical, political, and funding issues as well as advised the stakeholders on areas that required modification, restructuring, and improvement. However, the SC never exercised its leadership role and its effectiveness was further curtailed by the absence of high level representatives from key government agencies. These shortcomings were partially addressed by the setting up of several steering sub-committees. Weak capacity management of the PU and PEAs The management of EMCAP was demanding on the PU because the operation was involving several agencies and various donors. The PU was expected not only to monitor and coordinate the implementation progress of all of the PEAs’ activities, but also to act as a PEA itself. Indeed, the PU was in charge of the Strengthening Policy Development Capabilities component which included the coordination of 7 key studies and the installation of the GDLC. During the first two years, the PU lacked sufficient office equipment to carry out its basic functions which limited their ability to monitor the progress of implementation effectively, and to communicate with other PEAs and funding agencies in a timely manner. The managerial capacity of PRS and NPC was also weak. Delay in fund availability and delivery of land for GDLC: Government counterpart funds were available sometimes with considerable delays, compelling some PEAs, like SCN, to use their own resources to finance urgent activities. The major source of delays, which was also the primary cause for extending the closing date from December 2005 to December 2007, was the slow pace of implementation of the GDLC. Delays were essentially recorded in the delivery of the plot of land for

6

the GDLC, the hiring of consultants and contractors for its construction, and the amendment to the plan layout requested by the Bank. 2.3. Monitoring and Evaluation (M&E) Design, Implementation and Utilization The M&E was rated moderately unsatisfactory. The M&E design was weak, and it was not implemented effectively. 2.3.1. M&E Design. The PAD did not develop an effective M&E framework. It is indicated that the PU, based on reports generated by PEAs, was supposed to monitor and evaluate implementation of EMCAP, and publish progress reports on a quarterly basis. The PAD, however, did not outline the monitoring tools to be used, the data collection methods, baseline data, and annual target values. Some indicators were neither measurable nor defined in a way as to capture the intent of achievement of the PDO. Thus, for example, corruption surveys (one of the outcome indicators) could not capture the intent of the PDO to improve fiscal transparency and efficiency of resource use. Other KPI such as “vigor and robustness of enforcement actions involving corruption incidents”, “evaluation of public expenditures in light with announced and agreed priorities as well as strengthening of sound procurement, accounting, and auditing practice and solid economic justification for capital projects” were not measurable. Others, such as “publication of timely economic, social and poverty data” were appropriately defined. 2.3.2. M&E Implementation Weaknesses in the M&E design were carried into implementation. The PU did not produce the expected quarterly M&E progress reports and the above-mentioned framework was not updated on a regular basis. The project did not elaborate an M&E manual which would have helped on facilitating the implementation. The Bank team, in some cases jointly with donor agencies, undertook semi-annual supervision missions throughout the life of the project, and a midterm review (MTR) which helped project monitoring. But baselines and final target values were identified and included in the framework somewhat late in project implementation (March 2005) and combined broad intermediate outcome indicators (“greater transparency through improved accounting”) with processing steps (“procurement bill finalized and forwarded to the national assembly”). Although these indicators were adequate and appropriate, they did not reflect progress toward actual achievement of PDOs fully because the framework did not include 2 project components and an adequate indicator for the fourth PDO. This ICR assesses progress toward the actual achievement of PDOs from the aide-memoires, the Implementation Status Reports (ISR), the MTR report, various reports generated by the PEAs and interviews with stakeholders. 2.3.3. M&E Utilization The monitoring framework developed by the Bank team could not be used because it could not track the progress of the implementation of all components and was not updated on a regular basis.

7

2.4. Safeguard and Fiduciary Compliance. Not applicable 2.5. Post-completion Operation/Next Phase. Not Applicable.

3. Assessment of Outcomes 3.1. Relevance of Objectives, Design, and Implementation (to current country and global priorities, and Bank assistance strategy) The PDOs are still consistent with current development priorities of the FGN and the donors’ strategy and lending program in the areas of economic governance and capacity building. They are in line with the country sectoral strategies as expressed in Nigeria's recent National Economic Empowerment and Development Strategy (NEEDS), the Country Strategy Partnership (2005-2009) of the Bank and DFID, and the Economic Reform and Governance Project (ERGP) funded by the Bank and DFID. The latter can be seen broadly as a continuation of EMCAP. This shows that EMCAP’s higher level objective is still relevant and should be further consolidated in the event of successful implementation of ERGP. 3.2. Achievement of Project Development Objectives (Including a brief discussion of causal linkages between outputs and outcomes, with details in Annex 4) Overall, the achievement of the PDO is rated moderately satisfactory with regard to the main objective of the first stage in strengthening economic governance. EMCAP’s contribution has been strong when it comes to the improvement of statistics, strengthening of the procurement procedures in the public sector, and improving the policy dialogue among various stakeholders. The ensuing sections assess the results under each PDO. PDO 1: Foster greater transparency and accountability in fiscal operations. The objective was to have an actual and perceived improvement in transparency and accountability. Three KPIs and three outcome indicators were associated to this PDO. The shortcomings in these were discussed above. The corruption survey was conducted once and the results were not published. Under the “Component: Monitoring and Accounting of Fiscal Operations”, the goal of publishing candid OAuGF audits and the levying penalties on major violators was partially achieved. While accounts from 1994-2002 have been audited and published, those for the period 2003-2006 have not yet been published by the project closing date (December 31, 2007). There is no evidence of any penalty levied against any major violators. But there were significant achievements; in addition to the clearing of years of unprocessed backlog in fiscal account, EMCAP major outputs under this component included the reinforcement of OAGF's statutory function and its capability to undertake internal auditing. Through training, the project has strengthened the efficiency of the accounting system by introducing consistency in accounting and controls in the line ministries using updated Financial Regulations and new procedures in line with the recommendations of the CFAA. EMCAP also contributed to the Reorganization of OAGF from six to eight functional departments, aimed at enhancing its functional relationship with the ministries and agencies of government in order to improve the existing information flows. On the audit function, EMCAP assisted the FGN in reviewing the outdated 1958 Audit Act, which had been revised into a new Audit Bill and submitted to the National Assembly but is not yet passed into an act. Through training, the project has strengthened the efficiency of the auditing function.

8

EMCAP contributed to the reinforcement of the oversight role of the public account committee (PAC) of the NASS as strong legislative support is critical for the success of government’ audit reforms.

As a goal, the implementation of IFEMIS was not achieved. Under the “Component: Information Management System”, IFEMIS infrastructure is in place, but the publication through the system of the budget expenditures and receipts, including revisions and outcomes, has not happened as the software has not been installed. EMCAP was supposed to provide support for the design and implementation of IFEMIS through the Japan PHRD grant (which was canceled) and EU funding. The more serious problems that affected IFEMIS stemmed from the high turnover of the EU staff and the lack of strong Government’s leadership from the outset. Implementation performance was also impaired by the lack of coordination between the EU, the PRS, and the NAO. Based on shortcomings presented above as regard to the KPI and the outcome indicators, the PDO 1 is rated moderately unsatisfactory. PDO 2: Strengthen systems designed to improve the efficiency of resource use, while discouraging - via public transparency - those elements that have deterred such efforts in the past. The primary goals were to (i) strengthen the prioritization, allocation, and monitoring of public expenditures by enhancing the capacity of NPC to undertake annual PERs and monitor PIP, including a solid economic justification for capital projects, and (ii) improve the procurement activities in the public sector of Nigeria. With regard to what has been achieved, under the “Component: Improvement and Monitoring of Public Expenditure”, key staff were sensitized, thorough several workshops, training and study tours, on the rationale for reinforcing government's control over public expenditures. Staff of the NPC was trained on how to supervise capital projects efficiently and undertake periodic PERs. EMCAP provided local and external technical assistance to the NPC, and the Budget Office (BO) to undertake PER exercise. NPC conducted 4 sectoral PERs under this component. Findings of the PERs were disseminated through a workshop held in 2003. The recommendations of the PER and the workshop formed the content of the Memo-to-Council of the Economic Adviser to the President. In addition, the project supported the reorganization of the NPC by the relocation of the Plans, Budget and Projects (PBP) Department to the BO. With this repositioning, the capacity created through the PER exercise and other training is used within the BO since 2004 to prepare an annual review of budget implementation. The conclusions of the annual review of the budget implementation for year n-1 inform the preparation of the budget for year n+1. Regarding the evaluation of public expenditures in light of announced and agreed priorities; there is no baseline and annual target of public expenditures versus announced target in the PAD. Based on 2007 PEMFAR conclusions, there is a considerable increase in total spending on MDGs which are the agreed priorities in the NEEDs. In addition, the project was successful in sensitizing key staff in the federal and state governments, through several workshops, training and study tours on project evaluation, and macroeconomic modeling, planning techniques, and on the rationale for reinforcing government's control over public expenditure, especially capital expenses. While there is no evidence that economic justification is used to prepare the PIP, thanks to EMCAP, FMF now requested for feasibility studies for any investment project to be considered in the PIP.

9

Under Component: Strengthening the Procurement Activities in the Public Sector, EMCAP’s targeted outcomes which are the launch of the reform process have been achieved. Through EMCAP, a CPAR was undertaken in 2000 by a joint FGN/Bank team and aimed to advice on the best procurement practices. The Executive Council adopted the revised CPAR recommendations. The value for money exercise contributed to have a better understanding of the importance of the procurement reform. EMCAP was successful in developing the framework for the preparation of best-practices procurement system in the country, including new procurement bill and implementation mechanism. This was pursued and strengthened under ERGP and other donors assistance, as demonstrated by the (i) establishment of the Budget Monitoring and Price Intelligence Unit (BMPIU) which is in charge of due process, (ii) issuance of the Nigeria Procurement Manual, which did not exist before, and (iii) the National Assembly’s approval of a new Public Procurement Bill based on the CPAR recommendations and best procurement practices around the world. This PDO2 is rated moderately satisfactory owing to the success under the procurement component which contributed to launching the procurement reform in the country, and progress made on preparing the budget and the PIP thanks to the capacity building through the PER exercise, and other training programs. PDO 3: Improve the quality and timeliness of economic and social analysis data, as well as their wide dissemination. The objective was: (i) to improve the quality and timely delivery of the National Accounts data, Consumer Price Index (CPI), Poverty and Social Data, and (ii) ensure widely dissemination of these data. Success was to be measured through:

- Quarterly production and publication of relevant economic indicators, - annual publication of national income accounts - Publication of updated minimum national social data set and of 2000-2001 poverty profiles,

and - Household survey data published and archived periodically

Under the “Component: Improvement of Statistics”, EMCAP provided technical, and financial assistance to NBS to strengthen its capacity to improve the quality of the statistical base and the timeliness of the information releases. NBS Staff were provided with relevant training in the areas of compilation of quarterly GDP, economic statistics, balance of payment accounts, economic modeling, and government finance statistics. These training sessions and workshops not only improved the skills of statisticians, but also paved the way to bringing Nigeria into full compliance with the GDDS requirements. Data production technology has been significantly enhanced, with the introduction of digital technology into data collection and processing, which has reduced the likelihood of errors and sped up processing. In addition, the IT capacity was strengthened with provision of equipment including computers and other peripherals. A new NBS web site was set up to make data ready available online. With respect to the improvement of the quality of statistics, NBS succeeded in enhancing the quality of the CPI by improving the method of collection and computation of data as well as expanding the coverage. The consumption weights, which were based on the 1985/86 National Consumer Survey, were revised using the 1996/96 National Consumer Expenditure survey. Derived item weights were updated to May 2003 which served as the new index reference month. Through the same assistance, NBS also made remarkable progress with regard to the improvement of social and poverty statistics. NBS has now produced new indicators of social statistics and compiled them in a major publication, the “Social Statistics in Nigeria”. When EMCAP was getting off the ground, the last “Social Statistics in Nigeria” publication dated back to 1994. The most up-to-date

10

publication is now only a year old, dating to 2006, and covers data from 2001 to 2005. This achievement provided the framework to assess the impact of major development policies and economic reforms. In 2004, EMCAP helped launch the Nigerian Living Standards survey (NLSS), which was a success in that it provided a survey framework for timely monitoring, management, and tracking of poverty statistics. The capacity of the NBS to monitor poverty was further reinforced by the implementation of the 2006 Core Welfare Indicators Questionnaire Survey (CWIQ) which produced welfare indicators for the population at national and sub-national levels. On the timely delivery of statistics, improvements in the compilation process and the coordination of the collation of information – within NBS departments and with other government departments and state agencies – have resulted in reduced time lags. In collaboration with the Central Bank of Nigeria and with the assistance of EU and DFID, GDP data is now produced quarterly, based on comprehensive surveys that cover all economic sectors. The lag in the production of the CPI has been reduced from 6 months to 1. The current delay is mostly due to problems transmitting the collected data from the field offices to the states, and from the state offices to the headquarters. On the dissemination of data, EMCAP (along with ERGP) contributed to increasing the number of publications, as demonstrated by the series of Compendium of National Statistics, the development of an operational National Socio-Economic Database (NSED) covering all socio-economic activities in Nigeria, and the release of other important publications. Official statistics are being disseminated through FOS’s offices. A new FOS website has been set up to make data readily available online. This PDO 3 is rated satisfactory as the main sub-objectives were achieved. PDO 4: Enhancing the capacity to carry out, coordinate, and monitor macroeconomic and structural policies. The objective was (i) to provide support to economic policy coordination and capacity building efforts in newly created institutions such as EPCC, BMPI, DMO, (ii) provide training courses for civil servants and public economic managers, (iii) to finance several macroeconomic and structural policy studies, and (iv) to initiate the installation of a Global Distance Learning Center. Achievement was to be measurable by having:

- satisfactory completion of number of courses for officials in the training program - completion of joint reviews as outcome indicator, which is identified as an outcome indicators

It is difficult to measure the performance of the PDO through the identified indicators listed above. As stated before, assessing the impact of training in the Nigerian context is ambitious. On joint studies, the understanding and agreement is that the appropriate indicator is to create an enabling environment for improving policy dialogue. Under the component: “Strengthening Policy Development Capabilities”, the main thrust was to strengthen the policy development capabilities of the FGN. To this end, the project (i) gave support to economic policy coordination and capacity building efforts in newly created institutions such as EPCC; (ii) financed several macroeconomic and structural policy studies; (iii) and initiated the installation of a Distance Learning Center Based on feedbacks received through the interview process with various stakeholders, and the conclusions of the 2005 survey1 on training impact evaluation, EMCAP has increased policymakers’ awareness of the challenges facing Nigerian economic governance. The objective of 2005 survey was to obtain feedback from trainees and their institutions on how EMCAP courses have affected their job 1 At the time of the survey, 674 have benefited from the project over the period 2000 - 2004, comprising 270 foreign and 404 local courses. Out of 175 questionnaires sent to course beneficiaries 110 were retrieved.

11

performance in five PAEs (FMF, NPC, OAGF, OuGF, and NAASS). The conclusion from the survey is that EMCAP was a veritable tool for capacity building enhancement and brought about tremendous impact on beneficiaries’ efficiency and effectiveness through: (i) broadened knowledge and enhanced skills, (ii) improved organizational efficiency and effectiveness, (iii) positive attitudinal change to work, and (iv) improved interpersonal communication skill. The ICR team has not been able to assess the impact of the training in a comprehensive and detailed manner. Through joint reviews and studies, EMCAP created a momentum on policy dialogue among various stakeholders in several areas such as pension reform, trade, private sector development, and fiscal decentralization. EMCAP was successful in creating an adequate environment to improve pension reforms and records management in the Federal Civil Service. Following series of diagnostic studies and seminars on the Nigerian Pensions System funded through EMCAP, a new Pensions Act was passed by the National Assembly and a National Pensions Commission established. The other key studies undertaken under this component have provided broader framework for dialogue on structural reforms in government. The study on fiscal decentralization advised on strategies to improve the effectiveness of the current revenue sharing system. The Trade Policy of Nigeria study provided thorough recommendations as to how to enable Nigeria benefit from the multi-lateral trade system, especially in the wake of the emerging global economic trends. Another study focused on how to spur private sector development in Nigeria. The project was not able to deliver the GDLC by the project closing date, in spite of the two-year extension. The reasons for these shortcomings range from insufficient capacity management of the PU to fluctuating commitments of the FMF and the FGN. In other hand, some weaknesses were identified in the Bank distance learning team based in Washington to adequately handle this sub-component. The PDO4 is rated moderately satisfactory. There is no indicator in the PAD to monitor the performance of the legal and judicial component. Under the “Component: Strengthening Legal and Judicial System”, the outputs included a review of the judicial system and 6 zonal stakeholder workshops in the country. A national summit was held to put together all the recommendations and draw up an action plan for their implementation. A full report with accompanying recommendations on the stakeholder consultations is being awaited from the Project Unit (PU) housed in the Supreme Court. EMCAP also supported the enhancement of the library of the Supreme Court and the Judicial Council with law books. The achievements under this component contributed to improving the dialogue on legal and judicial reform. Efficiency. Not Applicable. 3.3. Justification of Overall Outcome Rating Keeping in mind the difficulty in assessing the full impact of training and capacity building efforts in the Nigerian context, the overall outcome of EMCAP is rated Moderately Satisfactory. It is important to highlight that the overall objectives of EMCAP were ambitious given the country’s political environment of the late 1990s. EMCAP was successful as a springboard for reforms in providing technical assistance in priority areas “which required rapid resolution”, and it also helped the Bank identify areas requiring substantial reform efforts. As a follow-up project to EMCAP, ERGP is designed to further advance, deepen and broaden the initial reforms and capacity building activities. EMCAP’s impact is strong in the area of statistics in supporting the NBS in the provision of timely

12

economic, financial, and social data. EMCAP also contributed to creating an enable environment for procurement reform, and policy dialogue. 3.4. Overarching Themes, Other Outcomes, and Impacts 3.4.1. Poverty Impacts, Gender Aspects, and Social Development Although EMCAP did not directly target reduction in poverty as a goal, it did seek to identify and root out the underlying causes of increased poverty such as economic mismanagement, poor governance, and lack of alignment of public resources with the country’s development priorities. Adopting best procurement practices by line ministries and the introduction of Due Process are likely to lower wasted public resources and to strengthen the government's fiscal stance. Doing so will contribute to poverty reduction objective in the country. 3.4.2. Institutional Change/Strengthening The project generates important institutional development impacts in terms of strengthening the operational capacity of key economic institutions through the development of their IT capacity, the enhancement of human capacity, the creation of institutions, and the reorganization of existing ones. The accounting function of the FGN was strengthened by the reorganization of the OAGF from six to eight functional departments. These changes improved the timeliness of the submission of returns from various ministries and agencies and the production of the Statements of Accounts of the FGN. In the presidency, the project gave support to the creation of the new Budget Monitoring and Price Intelligence Unit (BMPIU), responsible for Due Process. 3.4.3. Other Unintended Outcomes and Impacts (positive or negative). Not Applicable. 3.5. Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops. Not Applicable. 4. Assessment of Risk to Development Outcome The overall risk that development outcomes that are achieved - such as the performance of NBS to publish timely economic and social data and the adoption of best procurement practices by the government will not be maintained is moderate. The FGN commitment is not expected to wane, assuming there is no significant shift in the government’s current development priorities. Measures such as adoption of good practices in procurement are not easily or likely reversible. Furthermore, some key outcomes are likely to be maintained in the medium term in part because most of the public institutions that benefited from EMCAP continue to be sustained through ongoing technical and financial assistance such as ERGP. 5. Assessment of Bank and Borrower Performance 5.1. Bank Performance 5.1.1. Ensuring Quality at Entry. This ICR judges the quality at entry moderately satisfactory. As noted in section 2.1, the project design was tailored to the country’s priorities. The contextual

13

factors and weaknesses were correctly identified. The project adopted a comprehensive approach, dealing simultaneously with weaknesses in key areas of economic and policy analysis, financial management and information systems. It was designed to serve as springboard for reforms, which was a realistic choice because Nigeria economic governance was severely hit after 20 years of military rule and was not expected to fully recover over a five-year span. It aimed to form the basis for transparency and accountability in key public institutions. Important lessons and experience learned from other successful World Bank operations were adequately incorporated. The Bank team involved key stakeholders at every stage in the formulation of the project. However, the Bank performance at appraisal was deemed moderately satisfactory because of various shortcomings. The design seems to have been too optimistic with regard to the arrangement with donors. It was difficult to execute the project in a timely manner under different sources of funding arrangement. With respect to monitoring, an adequate M&E system was not designed from the outset. In fact, some key indicators did not reflect progress toward development goals fully. Indeed, one of the PDO indicators for Improved Accountability was measured by the Penalties for major violators by the Executive Branch. This was not an adequate indicator because, as noted in the PAD, enforcement of punishment for corruption would depend on the policies of the National Assembly the Judiciary, and public prosecutors. It was also difficult to meet this goal while the project was being implemented because issuing penalties entailed many steps that would have taken years. The weaknesses of the M&E are discussed under section 2.3. 5.1.2. Quality of Supervision The Bank’s performance on supervision is rated moderately satisfactory. The Bank carried out regular supervision missions led by a senior economist and composed of a procurement specialist and a Legal and Judicial Specialist. The Task Team Leader changed once during the seven-year implementation period. With the TTL based in the field, the collaboration and relationship with the PU and PEAs was good. The PU and PEAs felt that the supervision team was proactive and supportive during the implementation period. The team was proactive in assisting the PU and PEAs with their work programs and procurement plans as well as resolving any bottleneck that is relating to the accomplishment of the activities. In addition, the Bank conducted regular financial reviews and advised on ways to strengthen the financial management systems. The records were manually maintained. While there was no Financial Procedures Manual, disbursement information was properly maintained and relevant documents could be traced easily, as indicated in the financial mission report. Even though the Bank team responded in a timely fashion to the various requests by the Government, the outcome orientation of the supervision was limited. Some critical issues that were called to attention during successive supervision missions were not addressed, in part due to decreased commitments of the government and PEAs. While Bank management maintained high level dialogue with the FGN on reforms, its direct oversight on the EMCAP was limited as many ISRs being filed without management review after 20 days. There is limited information content of some ISRs. Coordination with other donors was not very close from the onset, though it improved after the MTR. During the early years of the project and at the MTR, an opportunity was missed to more vigorously:

- review PDOs and performance indicators based on changes such as the cancellation of the Petroleum component, and the additional GDLC activity,

- improve donor coordination or launch a project restructuring based on shortcoming on

14

coordination among donors, - and establish a more stringent M&E framework.

5.1.3. Justification of Rating for Overall Bank Performance The overall Bank performance is moderately satisfactory because of various shortcomings experienced in the design and implementation of M&E system, lack of proactively in addressing the coordination issues among donors, the weak outcome orientation of the supervision team, and limited Bank management oversight. 5.2. Borrower performance 5.2.1. Government Performance Government performance was rated moderately satisfactory. On the positive side, the FGN was involved in the different stages of project preparation. Indeed, as indicated in his letter of Sector Development Policy to the World Bank on 4th February 2000 regarding EMCAP, the Federal Minister of Finance stated that, while the content of the project is a joint initiative with the Bank and other donor agencies, the content emanated from the government. The FGN showed strong ownership in and commitment to implementing the various measures listed in the aforementioned letter. They also showed willingness to put into practice good Governance in Nigeria. Government performance was less than fully satisfactory owing to the following reasons:

- During implementation, FGN's commitment and ownership fell short of their startup levels, but they were enough to keep the project moving forward,

- The steering committee, chaired by the minister of finance, failed to be effective, - The PHRD grant (US$0.4 million), which was intended to finance the preparation activities of

the IFEMIS, lapsed due to non-utilization , and - The GDLC took two years to get land.

5.2.2. Implementing Agency or Agencies Performance The performance of the Multilateral Institutions Department of the FMF (MULT), the PU, was rated moderately satisfactory. This rating factored in the context in which the operation was executed. The country was transitioning from military rule to democracy, and struggling to regain international credibility. Most of the PEAs were still evolving. The task was very demanding on the agency, the number of PEAs involved (9) and the long list of activities to be implemented. Although MULT carried out its mandate, including the close monitoring of budgetary allocations to the PEAs, in the supervision of contracts and procurement processes and the organization of workshops with stakeholders, major shortcomings were observed during implementation. There was a lack of close coordination with donors and other PEAs during the first two years. The PU did not produce any monitoring and evaluation report. The project manager was replaced three times. The last project manager was disconnected from the implementation status of project components, with the exception of the GDLC component. The latter could not be delivered as scheduled due in part to insufficient commitment from the FMF. 6. Lessons Learned (Both project-specific and of wide general application)

15

An adequate M&E arrangement from the onset, which regularly informs on the gaps between expected and realized activities, is critical not only for measuring progress toward PDOs, but also for making decisions that keep outputs aligned with the original PDOs. Because of the absence of an adequate M&E, tracking implementation status of all components and thus actual progress toward achievement of the PDOs turned out to be more difficult than anticipated. It is also to appoint an M&E specialist within the PU who will ensure the implementation of the M&E framework and reinforce it if needed. In a multi-donor program with parallel financing, coordination among funding partners is critical to timely delivery of outputs. Donor coordination may involve (i) harmonization of procedures, and (ii) sharing of information in a systematic way during implementation. Full harmonization is unlikely when each donor is required to follow a separate set of rules when it comes to funding and component management. It is incumbent upon the project team to harmonize rules & procedures during the project preparation phase and to adopt an acceptable set of consistent procedures that will facilitate implementation, funds availability, and monitoring and evaluation. In operation involving a great number of executing agencies, donors, and activities, the importance of having a strong Implementing Agency assembled at the inception of the operation with the required equipment and expertise cannot be overstated. EMCAP involved a number of executing agencies involved, funding sources, components and activities. During the first two years, the PU lacked the necessary equipment and skills to perform efficiently. While having a strong PU can boost project performance, the creation of an effective Steering Committee, whose role is to keep output and outcome aligned to original goals, is critical. The Steering Committee should be composed of high-level representatives and be meeting on a quarterly or biannual basis to provide guidance and possibly relieve bottlenecks/resistance to the reforms to the political level for resolution. While embedding capacity building in the objectives of programs is important to institutional development, more emphasis needs to be put on the institutionalization of capacity building efforts. The Bank should focus on building the structures that will allow the country to offer on a regular and long term basis capacity building programs and training courses at a national or regional level. This will cut spending on training sessions while providing a long term solution to the issues of effectiveness and sustainability of capacity building efforts. The initiation of a center such as the Global Distance Learning Center by EMCAP represents a significant step toward the institutionalization of capacity building. Focus should be on how to ensure a smooth transitional phase from inception until the project reaches financial sustainability. By providing adequate funding, the FGN is supposed to sustain GDLC during that transitional phase. But, the way GDLC was handled during implementation suggested that FGN would need support during that critical phase. Train the trainers could be an effective way to initiate a process to sustain capacity building efforts. Because of the higher turnover rate experienced in some of the PEAs, there were constant needs to train new people. At the National assembly, for instance, more than fifty percent of the members who benefited from EMCAP training sessions were not reelected. In a project that is mostly comprised of soft components such as training sessions, a careful assessment of the impact of training and on the institution should be undertaken in order to improve efficiency and effectiveness. The value of training can be difficult to quantify, and people always tend to want more training, even on the same issues. While the ICR measures the overall impact in terms of achievement of PDOs, an in-depth capacity building assessment would gauge the

16

impact with respect to the purpose of training (building awareness, analytical capacity, or building decision-making capacity), the type (courses, seminars, workshops), and the location and the targets (human, equipment, institution). This will allow the Bank to improve efficiency in the delivery of future programs while building on past experiences. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners The Borrower provided comments on the ICR which are presented in summary in Annex 8. According to the Borrower, the many achievements of the project were reflected in the ICR but the importance of these achievements in economic management of the country was not properly highlighted. This may be a result of the weak M&E arrangement and the absence of baseline data. The Borrower did not agree with the Bank assessment of the overall performance of the project. In view of timing of the project and the amount of resources that was meant to do so much, the Borrower was of the view that the project rating is satisfactory. The Borrower provided comments on one justification relating to the borrower performance which is MS. It was stated that the inability to deliver the GDLC as schedule was not due to insufficient commitment on the part of the FMF as stated in the ICR. Instead, it was due to communication gap between the Bank and FMF during the design stage of the GDLC which led to amendment to the design midstream with concomitant cost implication and loss of time. On Factors generally subject to government control identified in the ICR which affected project implementation, first the Borrower highlighted that the Steering committee function was delegated to head of PEAs who met regularly and report to the FMF through the PU. So, the arrangement did not have any adverse effect on project implementation at any point in time. Second, in their view, the capacity of the PU and PEAs was weak at inception of the project implementation but improved significantly overtime. Third, the fact that the PU was able to manage multiple donors and PEAs was not adequately reflected in the ICR. And, there was no delay in fund availability to the GDLC. The delay in land delivery was beyond the FMF as the matter was within the jurisdiction of the Federal Capital Territory Administration. On lessons learnt, however, there is no disagreement.

17

Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent)

Components

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Improvement of Statistics 5.73

Improvement and Monitoring of Expenditure 2.79 Monitoring and Accounting of Fiscal Operations

4.59

Review of Petroleum Sector 3.53 Strengthening Procurement 2.94 Strengthening Policy Development 7.86 IFEMIS 3.88 Project Unit 3.36 Total Baseline Costs 34.68 Contingencies 2.95 Total Project Costs 37.63

Note: Differences due to rounding. (b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD millions)

Percentage of Appraisal

US: Agency for International Development (USAID) 6.80 N/A .00

Borrower 4.03 N/A .00 UK: British Department for International Development (DFID) 3.50 N/A .00

EC: European Commission 10.00 N/A .00 International Development Association (IDA) 20.00 19.27 96.3

JAPAN: Gov. of (excl. Ministry of Finance - PHRD Grants) 0.40 0 .00

Differences due to rounding.

18

Annex 2. Outputs by Component Component: Improvement of Statistics Outputs included:

Lags in the publication of economic statistics and the National Accounts have been significantly reduced.

360 NBS Staff were provided with relevant training in the areas of compilation of quarterly GDP, economic statistics, balance of payment accounts, economic modeling, and government finance statistics. These training sessions and workshops not only improved the skills of statisticians, but also paved the way to bringing Nigeria into full compliance with the GDDS requirements.

Data Production Technology has been significantly enhanced, with the introduction of digital

technology into data collection and processing, which has reduced the likelihood of errors and sped up processing.

GDP now is produced quarterly, based on comprehensive surveys that cover all economic sectors.

Collection, coordination, and transmission of National Accounts data have been strengthened, and the processing and methodology of existing survey data has been improved. The 1993 system of National Accounts has been adopted. The calculation of the GDP deflator has also been improved.

CPI method of collection and computation improved and coverage expanded. Consumption weights were revised using the 1996 National Consumer Expenditure survey. The lag in production has been reduced from 6 months to 1. Four other CPI - rural CPI , urban CPI, and state CPI – are being produced and published on a monthly basis in the NBS Statistical News. The coverage in the producer prices index has been expended based on a farm gate price survey and the improved collation of retail prices. They are produced on an annual basis

Indicators of social statistics have been produced and compiled in a major publication, the “Social Statistics in Nigeria”. The last one was published in 2006 and covered data from 2001 to 2005.

Poverty profile has been updated. The Nigerian Living Standards Survey (NLSS) was launched in 2004. The NLSS was a success in that it helped update the poverty profile and provide a survey framework for the timely monitoring, management, and tracking of poverty statistics. Although the results could not be directly compared to the earlier poverty profile (series 1980-1996) due to differences in the coverage, the NLSS could serve as a basis for a strong poverty analysis as well as monitoring and evaluation of poverty alleviation projects.

2006 Core Welfare Indicators Questionnaire Survey (CWIQ) produced, with welfare indicators for the population at national and sub-national levels.

IT capacity strengthened with provision of equipment including computers and other peripherals.

A new NBS web site was set up to make data ready available online.

19

Component: Improvement and Monitoring of Expenditure Outputs included:

Key staff were sensitized, thorough several workshops, training and study tours, on the rationale for reinforcing government's control over public expenditures. Staff of the NPC was trained on how to supervise capital projects efficiently and undertake periodic PERs.

Public Expenditure Review at the federal level carried out with focus on four sectors. Findings

were disseminated through a workshop held in 2003. The recommendations of the PER and the workshop formed the content of the Memo-to-Council of the Economic Adviser to the President.

Staff were provided with training in local and foreign institutions on project evaluation, procurement, and macroeconomic modeling and planning techniques

Reorganization of the National Planning Commission: relocation of the Plans, Budget and Projects

(PBP Department) to the Budget Office. With this repositioning, the objective was to the PER to the budget cycle within the context of a three-year rolling public investment program and a medium-term expenditure framework.

Component: Monitoring and Accounting of Fiscal Operations Output included:

Clearing of five years of unprocessed backlog in fiscal accounts (1994-1998);

Training of staff on computer and public accounting in local and external institutions, computerization of OAGF Headquarters;

Reorganization of OAGF from six to eight functional departments, aimed at enhancing its

functional relationship with the ministries and agencies of government in order to improve the existing information flows. Two new units were added: the Treasury Services Department which supervises and controls the pool of Accountants and Account Assistants in all Federal Ministries/Departments. It also collates, compiles, and prepares financial statements of accounts of the Federal Government and answers queries raised by the Public Accounts Committee. The second unit is the Treasury Internal Audit Department responsible for the control and supervision of the staff in Ministries. It also collates and analyses the Internal Audit reports from all the Ministries and Agencies. Following on this restructuring, the Accountant General’s Office is able to access submission of returns from various Ministries and Agencies on a timely basis promptly produce the statements of Accounts of the Federal Government; and quickly respond to Audit Queries raised by Public Accounts Committee.

Publication of audited fiscal accounts by OAuGF from 1994 to 2002.

OAGF's statutory function (act 1958) and its capability to undertake internal auditing has been reinforced.

Introduce consistency in accounting and controls in the line ministries using updated Financial

Regulations and new procedures in line with the recommendations of the CFAA of the joint FGN/Bank review.

20

Assisting various branches of the federal government integrates the electronic Transaction

Recording and Reporting System (TRRS) into their operations as part of the ongoing computerization of the accounting system. At present, TRRS was rolled in 20 MDAs and was expected to be extended progressively to all line ministries and federal pay offices.

Reinforcement of the oversight role of the PAC.

Component: Strengthening Procurement Outputs included:

CPAR was undertaken in 2000 by a joint FGN/Bank team and aimed to advice on the best procurement practices. Adoption by the Executive Council of the revised CPAR/CFAA recommendations

Organization of enlightenment programs to imbue transparency, accountability, and efficiency in the conduct of government procurements through workshops at geo-political zonal levels.

Revision of the public procurement practices and introduction of new procedures in line with the

recommendations of the CPAR

Value for Money audits of 60 recurrent and 60 capital projects of the FGN carried out using external consultants and submitted to FEC;

Component: Strengthening Policy Development Outputs included:

Key policy studies undertaken and recommendations disseminated through Government training programs and workshop.

Support the creation of Economic Policy Coordination Committee (EPCC)

One corruption diagnostic survey study was undertaken. The study assessed the impact of corruption on economic development and spelled out recommendations to tackle the issue. The results of survey were not published.

Study on fiscal decentralization advised on strategies to improve the effectiveness of the current revenue sharing system.

Study on Trade Policy of Nigeria provided thorough recommendations as to how to enable Nigeria to benefit from the multi-lateral trade system, especially in the wake of emerging global economic trends.

Study on private sector development in Nigeria laid out the basis to creating an enabling environment for private sector. The Nigeria Investor Road Map, which provided guidance on reforming commercial, business, and foreign investment procedures to provide a more flexible, user-friendly environment for investors and relevant government agencies, was created.

21

The private sector assessment report, which consisted of a review of the overall policy and

institutional capacity issues relating to private sector development in Nigeria, was issued.

EMCAP funded a series of diagnostic studies and seminars on the Nigerian Pensions System..

Training and workshops were held to disseminate the findings of the studies. In some cases memorandums of recommendation were submitted to the FEC or governments ministries.

The GDLC has been partially completed.

Component: IFEMIS Outputs included:

Installation of an Integrated Financial and Economic Management Information System (IFEMIS). The system provides fibre-optic networks and currently links 9 institutions: OAGF, NPC, CBN, NBS, DMO, and FMF. However, there is no content in the system.

Component: Strengthening Legal and Judicial System (not discussed in the report) Outputs included:

Conducted a review of the judicial system.

6 zonal stakeholder workshops were held with judges, magistrates, the police, wardens, lawyers, and other stakeholders in the administration of justice in the country. A national summit was held to put together all the recommendations and draw up an action plan for their implementation. The topics that framed the discussion at the workshops include: (i) Judiciary, (ii) Administration of Justice, (iii) Police and Public Safety, (iv) Prisons and Alternative Punishment, (v) Public Officials’ Conduct (executive and legislative branches) and its Impact on Citizens, and (vi) Access to Justice, Alternative Dispute Resolution, and Human Rights. Following the stakeholder workshops, significant improvements have been made in all aspects of the legal and judicial system. A full report with accompanying recommendations on the stakeholder consultations is being awaited from the Project Implementation Unit (PIU) housed in the Supreme Court

Supported the enhancement of the library of the Supreme Court and the Judicial Council with law

books.

22

Annex 3

23

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team Members Name Title Unit Responsibility/Specialty

Preparation/supervision

Jose B. Sokol Lead Technical Specialist

AFT: Macro. 4

First TTL

Mark Stevens Public sector management (peer reviewer)

Paul Meo Financial management (quality assurance)

Robert G. Lynch Statistics Francis J. Earwaker PER and Project Monitoring Thomas Hutcheson Financial analysis Winston Cox Accounting and Auditing Keith Soffe Accounting and Auditing Greg Nzekwu Sr Economist AFTP3 TTL Jeri Larson Operations Analyst AFCNG Operations Allan Crego Research Assistant Steve Wan Team Assistant Mary Asanato Procurement Spec. AFTPC Procurement

Bayo Awosemusi Lead Procurement Specialist AFTPC Procurement

Adenike Sherifat Oyeyiola Sr Financial Management Special AFTFM FM

(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only) Stage of Project Cycle

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending FY99 156.61 FY00 34 86.04 FY01 3 1.17 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00

Total: 37 243.82 Supervision/ICR

FY99 0.79 FY00 1 1.67

24

FY01 30 113.73 FY02 38 151.98 FY03 32 103.35 FY04 24 49.45 FY05 24 74.65 FY06 15 35.18 FY07 15 38.06 FY08 13 55.26

Total: 192 624.12

25

Annex 5. Beneficiary Survey Results (if any) Not Applicable.

26

Annex 6. Stakeholder Workshop Report and Results (if any) Not Applicable.

27

Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR The Borrower is in agreement with the factors affecting project implementation and outcomes. These factors include project preparation, design and quality at entry, multiple donor funding, and weak coordination among donors, and delay in fund availability from donors. The Borrower provided remarks on the following factors identified by the ICR (subject to government control) which affect project implementation:

- absence of effective steering committee (SC) led by the Honorable Minister of Finance, - weak capacity management of the PU and PEAs, - Delay in fund availability and delivery of land for the GDLC.

On the issue of SC, the Borrower stated that the function was delegated to head of PEAs who met regularly and reported to the FMF through the PU. In the borrower’s view, the arrangement did not have any adverse effect on project implementation at any point in time The capacity of the PU and PEAs was weak at inception of the project implementation but it improved significantly overtime. In the borrower’s view, the fact that the PU was able to manage multiple donors and PEAs was not adequately reflected in the ICR. There was no delay in fund availability to the GDLC. The delay in land delivery was beyond the FMF as the matter was within the jurisdiction of the Federal Capital Territory Administration. According to the Borrower, the many achievements of the project were reflected in the ICR but the importance of these achievements in economic management of the country was not properly highlighted. This may be as a result of the weak M&E arrangement and the absence of baseline data. The Borrower has noted the rating (Moderately satisfactory) of performance of the Bank and Government in the course of project implementation. However, the borrower wishes to observe that the inability to deliver the GDLC as scheduled was not due to insufficient commitment on the part of the FMF as stated in the ICR. Instead, it was due to communication gap between the Bank and FMF during the design stage of the GDLC which led to amendment to the design midstream with concomitant cost implication and loss of time. In view of timing of the project and the amount of resources that was meant to do so much, the Borrower is of the view that the project rating is satisfactory. The Borrower has noted the lessons learnt in the course of the project implementation as contained in the ICR. These include:

- need for adequate M&E arrangement at the onset of the project - need of proper coordination in a situation of multiple donor funding - need for a strong PEA - institutionalization of capacity building and train trainers

The lessons learnt would serve as a guide for future engagements in project design, preparation and implementation

28

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Not Available

29

Annex 9. List of Supporting Documents

Project Development Credit Agreement

Project Appraisal Document for Nigeria Economic Management Capacity Building Project, dated February 25, 2000 (Report No: 20150 UNI

World Bank – Project Information Document (PID), dated February 25, 2000

World Bank - Aide-Memoires of supervision mission

World Bank - Implementation Status and Results Reports (ISR)

30

Annex 10: Indicators in the PAD, DCA and ISR The objective of this annex is to provide a broad view on the indicators identified in the project’s various documents. The ICR assesses the project against the indicators identified in the PAD when possible. When the indicator in the PAD is not relevant, the ICR reports on the achievements under the component and its link to the overall objective of the project. Three out of five outcomes indicators are easy to monitor and to assess.

Project Appraisal Document (PAD)

Development Credit Agreement (DCA)

Project Status Report (ISR) Project achievements

Detailed corruption surveys (PDO 1)

3 corruption surveys designed in agreement with IDA shall have been carried out, action plan designed to address issues

One survey was undertaken and its results were not made public.

Periodicity, transparency, and reliability of published fiscal data (PDO 1)

National account shall have been audited by June 30 of each year, results of the audit submitted to the National Assembly by September 30 each year

3-5 year lag cleared but non periodic publication of audited fiscal account. Strengthened the efficiency of the accounting system in line with the recommendations of the CFAA. Supported reorganization of OAGF from six to eight functional departments. Assisted the FGN in reviewing the outdated 1958 Audit Act. Strengthened the auditing function, reinforced the oversight role of the public account committee.

Evaluation of public expenditures in light with announced and agreed priorities as well as strengthening of sound procurement, accounting and auditing practices (PDO 2)

A PER shall have been carried out by December 2001, the results should be reviewed with IDA by march 2002

NPC conducted 4 sectoral PERs. The PERs formed the content of the Memo-to-Council of the Economic BO since 2004 prepares an annual review of budget implementation which informs the following year’s budget. Considerable increase in total spending on MDGs. Through EMCAP, a CPAR was undertaken in 2000. The Executive Council adopted the revised CPAR recommendations. Other significant contributions included, a new procurement bill and implementation mechanism for procurement ( establishment of the Budget Monitoring and Price Intelligence Unit (BMPIU) which is in charge of due process, issuance of the Nigeria Procurement Manual, and the National Assembly’s approval of a new Public Procurement Bill).

Key

Per

form

ance

Indi

cato

rs

Vigor and robustness of enforcement actions involving corruptions incidents.

Identified incidents of mismanagement of public finance shall have been investigated as appropriate by the relevant investigative authorities in a speedy manner; and the results of the investigations made public as appropriate

Not achieved.

31

Have first phase IFEMIS in place and publish data (PDO 1) Not applicable

Fostering greater transparency and accountability in fiscal operations

IFEMIS infrastructure is in place but data has not been published

Solid economic justification for capital projects (PDO 2) Not applicable

Fiscal Operations of FGN open to audit by the Auditor General of the Federation

There is no evidence that solid economic justification is used for capital project in Nigeria. However, feasibility studies are required for a project to be listed in the PIP.

Publication of timely economic, social and poverty data (PDO 3) Not applicable

Improved quality and timeliness of economic and social data

NBS made remarkable progress in economic, social and poverty statistics and enhancing quality of CPI. The most up-to-date publication is now only a year old, dating to 2006. GDP data is now produced quarterly, based on comprehensive surveys that cover all economic sectors. The lag in the production of the CPI has been reduced from 6 months to 1. EMCAP (along with ERGP) contributed to increasing the number of publications. A new website has been set up to make data readily available online.

Publication of candid OAuGF audits; penalties for major violators (PDO 1) Not applicable

Improved transparency and accountability in government operations and specially fiscal spending

Reports for 3-5 years done but no penalties for violators.

Agr

eed

outc

ome

indi

cato

rs o

r PD

O In

dica

tors

Completion of joint reviews. (PDO 4) Not applicable

Joint reviews and studies, created a momentum on policy dialogue among various stakeholders in several areas such as pension reform, trade, private sector development, and fiscal decentralization (the focus of studies financed under EMCAP). While direct attribution is not possible, the studies helped contribute to improving pension reforms and records management in the Federal Civil Service. Following a series of diagnostic studies and seminars on the Nigerian Pensions System funded through EMCAP, a new Pensions Act was passed by the National Assembly and a National Pensions Commission established. Sub-objective of a GDLC was not achieved.