needs costing and prioritization costing a needs assessment
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NEEDS Costing and Prioritization
Costing a NEEDS Assessment
The Bottom-up Approach
5 Steps
Guiding Principles
Salaries and Allowances
Outline
Approaches to Costing
Bottom-up approach based on sectoral or program analysis
Field studies
Baseline statistics
Sector-specific, disaggregated unit costs
Macro approachEconometric models, estimated growth and resource envelope
IterationsBottom-up/macro/expected commitments
The 5 steps in a bottom-up cost approach
Which policies and interventions (broadly) would likely put Nigeria forward on a path for fulfilling MDGs and reducing poverty?
Some of these interventions or policies, however, might not directly lead to fulfilling the MDGs but are indirectly necessary for progress. For example, in order to reach the goal of gender equality in education, access to transport or infrastructure is necessary (but not sufficient) for securing girls’ school enrolment.
1. Identify pro-poor policies and interventions
Which targets are desirable and realistic in Nigeria, and what interventions would be needed to fulfill the targets?
Agree on quantitative long-term targets, and divide into short-term monitorable indicators. Result matrices are a good tool to use for dividing up MDGs and other targets into yearly indicators that are quantitative and monitorable. The number of teachers, classrooms, increase in enrolment rates, pupil-teacher-ratio (PTR), teaching materials, etc. are examples of input indicators for reaching universal primary education.
2. Identify sector-specific targets and monitorable indicators
North Year Source South Year Source
6. Net primary enrollment rate 59% 2000 C 20% 1999-02 B7a. Percentage of cohort reaching grade 5 66% 2000 A 28% 2002/00 B7b. Primary completion rate, % 50% 2000 D 2% 2002 B8. Youth literacy rate (% ages 15-24) 78% 1999-00 A 31% 1999-02 B
9. Ratio girls to boys in primary ed (%) 88% 1999 C 40% 2003 B10.Ratio literate females to males (% ages 15-24) 84% 1999-00 A 35% 2000 C11. Share of women in non-agriculture wage employment - -12. Proportion of seats in parliament (in the South, National Liberation Council) held by women 10% 2003 C 18% 1994 C12. [South] Proporation of seats in SPLM Leadership Council held by women 0% 2004 C
MDG 2: Education
MDG3: Gender Equality
Example Sudan: Baselines for MDG 2 and 3
MDG 2: Education
Net primary enrollment ratio (% relevant age group)
0%
20%
40%
60%
80%
100%
1993 1999-02 MDG:2015
North
South
Youth literacy rate(% ages 15-24)
0%
20%
40%
60%
80%
100%
1993 1999-00 MDG:2015
North
South
Example Sudan: What does it take to achieve universal primary education?
Example Burkina Faso: What does it take to achieve universal primary education?
Source: Clemens, Kenny and Moss (2004) “The Trouble with the MDGs: Confronting Expectations of Aid and Development Success.” Center for Global Development working paper 40.
Nigeria: What does it take to achieve universal primary education?
Data source: Nigeria: Demographic and Health Survey, National Population Commission Federal Republic of Nigeria, 2003
Net primary enrollment ratio (% relevant age group)
0%
20%
40%
60%
80%
100%
2003 MDG-2015
North Central
North East
North West
South East
South South
South West
Nigeria Targets – Main Interventions
Eradicate poverty
Primary Education for All
Gender Equality
Reduce Child Mortality
Improve Maternal Health
Combat HIV, Malaria ++
Environmental Sustainability
Global Partnership
Estimate recurrent and capital costs of each intervention with the help of country-specific disaggregated unit costs, baseline statistics, transparent and simple cost models. Deep country knowledge and interaction with “people on the ground” extremely important. But also, international experience important.
Sectoral or programmatic approach.
3. Estimate costs using country-specific disaggregated unit costs
Why is costing so diffucult?
No exact rules exists
Costs vary from one country to another
Regional differences
Transport, security, urban/rural
Many teams/persons – Consistency problems
How to do the actual costing?
No rocket scienceCommon sense and knowledgeThink local! Strategy to decrease dependence on external inputsBreak down programs in activitiesUnit costs guidelinesBaseline quantities
Develop a simple model for costing
(Example: Education)
Baseline statistics
Capital and recurrent costs per student
TOTAL COSTS
Estimated number of students reached by the
interventions
Target coverage rates, for:Primary EducationSecondary Education Adult Literacy
Country-specific disaggregated unit
costs (teachers’ salaries, textbooks,
construction and equipment of
classrooms, etc), and data on PTR,
sets of textbooks, etc.,
Human resource needs in Teachers and Staff
Infrastructure needs
+
+
+
An iterative process to integrate synergies, avoid overlaps, and ensure consistency between clusters. Important with strong management and central coordination.
4. Integrate synergies, avoid overlaps, and ensure cost consistency
A financing strategy should be developed by matching the estimated costs for the NEEDS with available domestic resources and the possibility of either increasing domestic resources and/or reallocating the budget. In this way, financing gaps are estimated.
5. Develop financing strategy
Guiding PrinciplesCapital vs. recurrent costs
Investment’s full operational costs as recurrent costs
Total vs. additional costsTotal costs include resources required to sustain also current coverage levels
Cash vs. accrual costsLink to budget - cash easier?
Fixed vs. floating exchange rateCosts in US$, fixed rate as of today
Guiding Principles
Factoring in absorption capacityDelays in implementation
Quick wins?
Emphasize use of local resources
Country vs. International responsibility
Ownership
Keep it simple
Salaries and allowances
Rule 1 – Link to public financesStaffing impact – costs for service delivery
Rule 2 – SimplicityHigh, medium, low, and superscalesCivil servants, local and international consultants
Rule 3 – Think localAgreement on which simplified scales to use
Salaries and allowances
Civil service salary scalesLocal consultants, UNDP scales?International consultants, WB scales?
Civil service
Local consultants
International consultants
Superscale
High
Medium
Low
Salaries and fees, US$ per year
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