annex i 1. identification - european...

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Annex I

1. IDENTIFICATION

Country/Title Number

Federal Republic of Nigeria - Support to state and local governance reform programme (SLOGOR) NG/FED/022-731

Total cost EUR 60 000 000

European Development Fund (EDF) contribution: EUR 60 000 000

Aid/implementation Method

Project approach

Joint Management – Direct Centralised Management

DAC-code 15111 Sector Public Finance Management

2. RATIONALE 2.1. Sector context Since the advent of civilian rule in 1999, a number of reform initiatives have been developed at both the federal and state levels. Among others, they include the Seven Point Agenda, Vision 20-2020 at federal level and the State Economic Empowerment and Development Strategy (SEEDS) at state level. Similar efforts initiated for local governments across the country were not successful. These reform initiatives are aimed at poverty reduction in the 36 states, focusing on improving the standard of living of the majority of the population and the achievement of the Millennium Development Goals (MDGs). To address the MDGs' commitments, states and local governments face the challenge of ensuring efficient management of public resources in order to deliver social services to the people. Public Finance Management: In most states, including the EU focal states selected for this project1, there are a number of challenges and vulnerabilities in Public Finance Management (PFM) though in varying degrees. Most of the states have significant gaps in expenditure and revenue out-turns compared to original approved budgets, while the incremental budget system is still in use in making revenue and expenditure projections. These have raised a number of questions about the integrity and credibility of the budget at state level. Secondly, comprehensiveness and transparency of annual budgets are generally weak across the states. Most states operate high levels of extra budgetary operations; in states where Budget Classification and Chart of Accounts are in use, programme classification is missing just as the budget codes do not conform to good national and international standards. Thirdly, even though policy based budgeting is gaining momentum in these states, the system of planning needs to be streamlined. The link between resource allocation and policy priorities in each state's Economic Empowerment Development Strategy is weak while the sector plans are either only partially costed or not costed at all. Poor quality of planning and budgeting result from weak technical and operational capacity of most states to prepare comprehensive budgets that are linked to their multi-year development plans. Fourthly, in the execution of annual budgets, most states face the following challenges: inefficient information management systems; poor internal checks and balances; weak tax registration and internally generated revenue (less than 10% of total revenue in most states); weak accounting, recording and reporting systems; and loose adherence and coordination in budget execution processes. These challenges are exacerbated by overlapping roles and responsibilities among ministries

1 The EU focal selected states are: Anambra, Cross River, Osun, Kano, Jigawa and Yobe.

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tasked with budget planning and execution. The proposed project will support and deepen ongoing reform efforts in the states to improve performance in the budget cycle including the modernization of their public financial management systems, processes and institutions with the objective of improving efficacy in the management of public resources. Structure of Local Governance: At the level of local government, the proposed project will address the challenges of weak capacity and lack of authority to perform their statutory functions of service delivery in the areas of education, health, water and sanitation, which are important for the achievement of the Millennium Development Goals. Even though the Nigerian Constitution (1999) gives local governments (LGs) some responsibilities to deliver social services, in practice they enjoy very limited authority to perform these responsibilities. State governments have taken over the functions assigned to local governments such that the relationship between the two levels of government is reduced to a delegation of authority rather than devolution. The proposed project will support the efforts by the states to formulate and implement a road map for: (i) identifying potential areas and functions for devolution of authorities from states to local governments and; (ii) enhancing procedures, processes and re-orientation of the Ministry of Local Government (MLG) towards local governance

2.2. Lessons learnt The experience of Support to Reforming Institutions Programme (SRIP) under the 9th EDF at state and LG levels has shown that the pace of service delivery varies widely among the states and LGs; and depends on the political commitment of the highest authorities in each state. Therefore, a uniform approach in support to states and agencies which are in different stages of reform is usually not effective. For this reason, the proposed project will adopt a differentiated approach in its support to states and use existing state structures to implement activities. Another lesson learnt from past and on-going EU programmes in Nigeria is that the method of implementation of donor programmes is crucial for development aid effectiveness. For instance, the difficulties experienced in the use of programme estimate to implement EU programmes in Nigeria make this modality less attractive as it often slows project implementation. Also, implementation of EU programmes through Programme Management Units (PMUs), which operate in parallel to state structures have been less effective because they are seen as an imposition by the beneficiary states. Governance support at the state and LG levels is more difficult to deliver mainly because of weak capacity, especially at local government level. Consequently, the proposed project will be implemented in the framework of an EU/WB Trust Fund managed by the World Bank, taking full advantage of the experience and operational structures of the World Bank in the implementation of donor support to PFM reform at sub-national level in Nigeria.

2.3. Complementary actions In the last six years, the World Bank has provided PFM support at both federal and state levels through its Economic Reform and Governance Project (ERGP) and the State Governance Capacity Building Project (SGCBP) respectively. Through SGCBP, the WB supported Lagos State with the World Bank (WB) full Public Finance Management (PFM) package. This has resulted in a wide range of reforms that have earned Lagos a reputation as the fastest reforming state in Nigeria. In addition, the WB introduced a similar PFM package to Bauchi, Kaduna and Cross River states. Through the current EU WB joint programme the full WB PFM package will be delivered to 14 states: Edo, Rivers, Bayelsa, Delta, Cross River, Anambra, Osun, Jigawa, Kano, Yobe, Bauchi, Kaduna, Kogi and Ondo. Seven states will also receive the basic WB PFM menu: Ekiti, Adamawa, Kebi, Niger, Plateau, Abia and Imo. EU funding for the joint programme is provided for the six EU focal states through the present proposal and for the four Niger Delta core states – Edo, Rivers, Bayelsa, Delta – through the 10th EDF Niger Delta Support

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Programme. WB finance for the joint programme is provided through a special loan of up to $100 million for a second phase of SGCBP and, for the EU/WB jointly funded PFM activities in the four Niger Delta core states, using part of the WB special loan of $200 million for the Niger Delta programme. This means in all that the EU-WB joint programme would be funding PFM reform in 21 of Nigeria's 36 states. The proposed project will also coordinate with the UK Department for International Development (DfID) in the implementation of its State Partnership for Accountability Responsiveness and Capability (SPARC) project in Kano and Jigawa states. 2.4. Donor coordination At federal level, the National Planning Commission coordinates donor activities through Donor Groups/Forums on governance issues like public finance management, monitoring and evaluation, conflict prevention, elections and migration. Specifically, for the proposed project, the platform of the Federal Project Financial Management Division (FPFMD) will be used to coordinate with other donors. The FPFMD has robust multi-donor and multi-project PFM platforms, established in all states and at federal level respectively through the joint efforts of the Bank and the government. It is located in the office of the Accountant General of the Federation. 3. DESCRIPTION 3.1 Objectives The overall objective is to improve transparency, accountability and quality in public finance and human resource management systems, with a view to strengthening governance in participating states. The specific objective of the project is to build capacities and processes at state level towards improvement in public finance programming and management; and at local level, towards improvement in social service delivery. In this regard, the project will (a) strengthen the legal and policy framework for management of public finances (b) enhance the capacity of institutions for budget preparation, planning, implementation, accounting, monitoring and reporting of annual budgets; (c) improve capacity for internal and external audit and oversight role of state legislatures; (d) improve capacity for effective tax administration; (e) improve public procurement systems and processes; and (f) strengthen capacity of local governments to effectively perform their statutory functions of service delivery. 3.2 Expected results and main activities: These good governance improvements are expected to lead to increased service delivery, transparency and performance of the public sector. Project activities will be implemented through a differentiated approach tailored to the current status of PFM and specific needs/priorities in each state as determined during the formulation of the project. The project is expected to achieve the following results across the six beneficiary states Result 1: legal and policy framework for management of public finances is improved and used to regulate the budgeting process. Fiscal Responsibility, Public Procurement, Audit and Budget Laws are prepared/revised, enacted and implemented in the states and internal auditing is improved. Main activities to achieve the above result include policy/expertise advice and capacity development in support of drafting: Budget Laws, Tax Laws, Internal Revenue Laws, Freedom of Information laws; and in reviewing Financial Regulations.

Result 2: improved capacity for policy planning and budgeting; each state's PFM reform action plan is prepared/revised and adopted; multi-year state and sector strategic plans are

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prepared and adopted; revenue mobilisation plans are formulated/revised; programme budgeting is designed and budget computerisation started. Main activities to achieve the above result include policy/expertise advice and capacity development to support public investment management, development and implementation of Medium Term Sector Strategy (MTSS) and Medium Term Economic Framework (MTEF) as the basis for annual budget preparation and execution. Civil Society Organisations (CSOs) and media will also be supported to increase engagement in and analysis of budget formulation, implementation and monitoring, as well with regard to information dissemination Result 3: Operational and technical capacities of PFM agencies to carry out their mandates in the budget cycle are improved, especially, cash management, expenditure control, financial accounting and reporting. Integration and reliability of financial management and information system are improved. Main activities to achieve the above result include policy/expertise advice, capacity development and procurement of equipment to support the Offices of Accountant General of the Federation and the Auditor General in the following areas: - Development and implementation of New Charts of Accounts and budget classifications - Modernisation of the financial reporting system and preparation of annual financial

statements in accordance with International Public Sector Accounting Standards (IPSAS cash basis)

- Preparation of new operating procedures manuals and regular publication of aggregate budget implementation reports

- revenue and expenditure forecasting, development of a cash management system and a Treasury Single Account (TSA) for revenue collection and administration

- Upgrade, improve IFMIS and develop a common information and communications technology (ICT) infrastructure backbone for all applications supported under the project.

- Result 4: Transparent and accountable procurement systems are in place and ready to use; improved procurement practices in participating states. Main activities to achieve the above result include policy/expertise advice and capacity development to support government in the following areas: - Implementation of existing Public Procurement Laws and Fiscal Responsibility Laws

including the establishment of a functional regulatory body for public procurement - Preparation and use of standard bidding documents, update of each state's procurement

manual, publication of tender invitations and award contracts regularly, and establishment of a complaints mechanism

- Professionalization of the procurement function and cadre in the State civil service and procurement skills and training needs assessment for various implementing agencies as basis for preparation of a procurement training strategy

- Public awareness on good public procurement system in the fight against corruption; and demand-driven technical assistance to oversight and watchdog institutions and civil society groups to develop, build and strengthen their capacity to monitor procurement.

- Result 5: Improved quality and timeliness of external audit and oversight Main activities to achieve the above result include policy/expertise advice and capacity development for the Office of the State Auditor - General (OSAG), Office of Accountant General for the State (OAGS) and Public Accounts Committee (PAC) in the State House of Assembly (SHoA) in the modernisation of audit methods, techniques and reporting.

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Result 6: Improved revenue registration and generation by participating states. Revenue administration and payroll systems are established or improved Main activities to achieve the above result include policy/expertise advice and capacity development to support the Bureau of Internal Revenue (BIR) to improve tax payer registry/database with appropriate ICT infrastructure, conduct state wide survey for the identification of new taxpayers, review the organizational structure for the BIR in each state and conduct tax audits. Result 7: Functions of local governments in the management of finances and service delivery are enhanced. Studies for devolution of authority to LGs carried out, road map for implementation formulated and adopted. Monitoring and auditing systems in LGs are improved; and capacity of state institutions overseeing LGs enhanced in the area of human resource management. Main activities to achieve the above result include policy/expertise advice, studies and capacity development to support the government to develop and implement a road map for devolution of authority to selected agencies responsible for local governance and to strengthen the Ministry of Local Governments (MLG), Auditor General for Local Government (AGLG) and three pilot Local Governments in each state on planning, budget tracking and monitoring and evaluation (M&E). 3.3 Risks and assumptions The major assumptions are: (i) that state agencies involved in the project are committed to PFM reform (ii) that states already developed PFM reform action plans at their own initiatives; (iii) that each state already has structures to implement the project. The major risks are summarized in the table below:

Risks/potential adverse impacts Level Risk management strategy/measures Resistance from key political and economic groups/leaders to institutional change

Medium Sensitisation and dialogue with high and medium level political and economic groups/leaders;

Perceived risk of loss of employment at implementation and staff levels

Medium Comprehensive training of senior and middle management to lead corporate change;

Delays in the implementation of legal reforms and/or institutional arrangements within the PFM sector;

High Timely provision of quality inputs and high standard TA; and, aligning programme activities to existing State strategic plans and to ongoing activities of state partner institutions;

Rivalry and reluctance from other Ministerial Departments and Agencies (MDAs) to cooperate with the Implementing Agency established by government

Medium Members of Project Coordination Committee will be drawn from beneficiary MDAs, and the PMC will meet with MDAs periodically to give feedbacks and get inputs on implementation.

3.4. Crosscutting Issues The project addresses cross-cutting issues through promotion of good governance practices such as transparency and accountability. Project work plans will be screened in order to ensure they will not impact negatively on women. In addition, good governance improvements are expected to be an effect of increased service delivery, transparency and performances of the public sector, achieved through the EU project.

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3.5 Stakeholders The project will be implemented in the EU focal states. The beneficiaries of this project in each state are: Ministry of Finance, State Planning Commission, Offices of Auditor General and Accountant General, Board of Internal Revenue, and Due Process Unit; Finance and Appropriation Committees in each State House of Assembly. At local government level, the beneficiaries are: Ministry of Local Government, Auditor General for Local Governments, LG Service Commission and the departments responsible for management of public finances at local level. These agencies play key roles in the budget cycle at both state and local government levels. 4 IMPLEMENTATION ISSUES 4.1 Method of implementation The project will be implemented by Joint management through the signature of an Administrative Agreement with the International Development Association (IDA) in accordance with Article 29 of Regulation (EC) No 215/2008 on the financial regulation applicable to the 10th European Development Fund (EDF). The IDA complies with the criteria provided for in the applicable Financial Regulation, and is covered by the 2009 Trust Fund and Co financing Framework Agreement concluded by the WB Group and the European Commission. The choice of implementing partner was based on the WB's on-going work on Public Finance Management in three states, its technical expertise and mandate in Nigeria.

4.2 Procurement and grant award procedures All contracts implementing the action are awarded and implemented in accordance with the procedures and standard documents laid down and published by the WB Group/IDA. 4.3 Budget and calendar The total project cost is estimated at EUR 60 000 000, financed from the 10th CSP/NIP for Nigeria in the framework of the revised ACP-EU Partnership Agreement. The budget sets out as follows:

Categories

EU Contribution

EUR 1. Project activities & management 52 000 0002. Administrative costs 3 600 0003. Contingencies 3 900 000Sub-total 59 500 0001. Visibility 300 0002. Monitoring and evaluation 200 000Sub-total 500 000Total 60 000 000

The foreseen operational duration is 60 months from the signature of the Financing Agreement

4.4 Performance monitoring Monitoring and supervision missions will be carried out on a continuous basis by the implementing organisation, and representatives of the Commission will be invited to participate, as specified in the Administration Agreement that will be signed with IDA. The logical framework will serve as the basis for measuring progress and final assessments. The logical framework including the baseline and performance indicators therein will be revised on the basis of the outcome of a Public Expenditure Management and Financial Accountability Review (PEMFAR), which will be concluded in late 2011 in each of the EU focal states. The Commission may carry out Results Oriented Monitoring (ROM) via

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independent consultants, starting from the sixth month of project activities, which will be finalised at the latest six months before the end of the operational implementation phase.

4.5 Evaluation and audit There will be a mid-term evaluation mission and a final evaluation to be carried out by the Commission through direct centralised management. The NAO and EU Delegation will analyse the conclusions and recommendations of the evaluations and decide on follow-up actions to taken and any adjustments necessary.

4.6 Communication and visibility A communication and visibility Action Plan will be drawn up at the commencement of the project in accordance with relevant “EU visibility guidelines”. The visibility plan with detailed budget will be approved by the EU Delegation. The visibility plan will have a separate budget for its implementation through direct centralised management to ensure maximum visibility of the EU intervention. Also, in order to ensure an integrated approach to the visibility of the project, the measures to ensure visibility of the EU's contribution will be detailed as part of the implementing organisation's responsibilities laid down in the Administration Agreement to be signed with IDA. These shall be in line with the Trust Funds and Co-financing Framework Agreement concluded between EU and WB in 2009, its attachments and the EU-WB Joint Visibility Guidelines.

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Annex II

1. IDENTIFICATION

Title/Number ISupport to Federal Governance Reform Programme (SUFEGOR) CRIS NO: NG/FED/022-893

Total cost EUR 20 000 000

European Development Fund (EDF) contribution:

EUR 20 000 000 - A-envelope

Aid method / Method of implementation

Project approach:

Partially decentralised management

DAC-code 15110 Sector Public sector policy and administrative management

2. RATIONALE

2.1- Sector context The project will support the implementation of the National Strategy for Public Service Reform (NSPSR), particularly in the areas of governance, institutional strengthening and efficient civil service administration reform. This is with a view to improving coordination of government's public service reform programme and strengthening its capacity for policy planning, development of statistics, revenue generation and performance monitoring. The Federal Government of Nigeria, recognising that the weakness of the public service has impacted negatively on its ability to deliver social services effectively and to achieve the objectives of its policy framework, "Vision 20-2020"; commenced the implementation of the NSPSR in 2008. While there have been notable successes in the past two years in the implementation of this strategy, the Federal Government of Nigeria still faces several challenges in the implementation of the second phase of the strategy. The project will assist the Government in addressing these challenges. The first major challenge is the fact that the roles of the agencies driving the reform process, namely the Office of the Head of Civil Service of the Federation (OHCSF) and the Bureau of Public Service Reform (BPSR are not clearly defined. This results in inadequate and inappropriate direction being given on the implementation of the government's reform strategy and renders coordination ineffective). The proposed project will support the establishment of a legal framework that will enable the roles of Office of the Head of Service and the Bureau of Public Service Reform to be clearly defined. The project will also support the development of mechanisms that will allow the implementation of the strategy to be properly coordinated, monitored and evaluated. The second challenge relates to poor technical competences of the specialised agencies, namely the National Bureau of Statistics (NBS) and the National Planning Commission (NPC) to provide the services required of them. The NBS lacks efficient systems for generating data while the NPC's weak capacity means that it is unable to use macro-economic modelling for forecasting. The result is that policy planning and forecasting are not rigorous. The project will strengthen the capacity of NBS to generate, store and disseminate reliable statistics and build the capacity of NPC to develop policies and carry out macro-economic analysis and modelling. The third challenge is that the existing Medium-Term Sector Strategy (MTSS) is weak and annual budgets are neither prepared on the basis of this strategy nor linked to Government's

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Medium Term Economic Framework (MTEF). Therefore, it is difficult to monitor and evaluate government's policy and budget performance in line with its policy framework and priorities. The project will support Government's plan to revise the MTSS and encourage Ministries, Departments and Agencies (MDAs) to use it as a basis for preparing annual budgets. It will also support the establishment of an integrated monitoring and evaluation (M&E) strategy which will be harmonized with the existing Medium Term Economic Framework (MTEF) used for budget implementation and performance monitoring. The fourth challenge is inefficient financial management, poor accounting, recording and reporting across government agencies. This is due to lack of competences and skills in cash management, budget profiling and cash flow forecasting, and poor skills in accounting and information and communication technology (ICT) applications. The Government, with support from the World Bank (WB), has implemented a project on Public Finance Management (PFM) Systems2 in six MDAs which helped to overcome these challenges. The five beneficiary agencies of this project were not included. The proposed project will assist the government in establishing PFM in these five beneficiary institution Ministries, Departments and Agencies. The fifth and last challenge concerns the consistent decrease in non-oil federal revenues. This is as a result of government's high dependence on volatile oil revenues and the absence of an integrated tax administration system that could enable a sustainable increase in non-oil revenues. This problem has adverse effects on Nigeria's economic growth and macro-economic stability. Given the importance of the Federal Inland Revenue Service (FIRS) in the generation and administration of federal revenues; and in consideration of the Council of European Union's "Conclusions on tax and development – cooperating with development countries in promoting good governance in tax matters", the proposed project plans to strengthen the technical and human competencies of FIRS to improve tax administration and generation of non-oil revenues in order to contribute to the growth of the Nigerian economy. 2.2 Lessons learnt There are lessons learnt from the implementation of two EU programmes at federal level namely, Economic Management Capacity Building Project (EMCAP) and Support to Economic and Financial Crimes Commission (EFCC), under the 7th and 9th EDFs respectively. The support provided to the Federal Ministry of Finance (FMF) under EMCAP did not achieve significant results due to leadership inadequacies; whereas similar support to NBS under the same programme achieved some results because of the political will and commitment to reform by the leadership of NBS. EU support to EFCC recorded positive results because the erstwhile head of the agency demonstrated strong commitment to reform. Therefore, the lesson learnt from the implementation of the two programmes is that ownership and leadership of the beneficiary institutions are crucial. Similar lessons were learned in the programmes implemented by other donors, particularly the World Bank's Economic Reform Governance Programme (ERGP), which supported government to implement the first phase of NSPSR. The proposed project is built on the approach of ERGP where the leadership in beneficiary institutions initiated the processes and policies for reform while development partners provided technical support.

2 These systems include: a learning version of Account Transaction Record Report System (ATRRS), a pilot of Integrated Personnel and Payroll Information System (IPPIS), a new Chart of Account (CoA) and a pilot of Government Integrated Financial Management Information System (GIFMIS) in six MDAs to facilitate rapid implementation of International Public Sector Accounting Standards (IPSAS).

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2.3 Complementary actions This project will complement similar programmes planned by other donors in a division of labour approach, towards assisting government in the implementation of the second phase of the NSPSR. In the first phase, the World Bank and the UK Department for International Development (DfID) supported the implementation of new Chart of Accounts (CoA), Account Transaction Record Report System (ATRRS), Integrated Personnel and Payroll Information System (IPPIS) and Government Integrated Financial Management Information System (GIFMIS) in six MDAs excluding those covered by this project3. The proposed project will implement the CoA, ATRRS, IPPIS and GIFMIS in the five beneficiary agencies. With regard to macro-economic analysis, the proposed project will follow up on the feasibility study for the development of macro-economic models in the National Planning Commission, financed under the EU Technical Cooperation Facility (TCF). The WB has supported the formulation of the States' Statistics Edicts and the States' Statistical Master Plans (SSMP) in six pilot states. The Bank also plans to support the development of statistics strategy in some MDAs in line with the second phase of the NSPSR. The proposed project will complement the WB's planned activity by supporting the NBS-PIU (Project Implementation Unit) in the implementation of the National Statistics Master Plan and capacity building for survey design and data processing. Similarly, both the WB and DfID have supported the FIRS to develop a system that provides taxpayers with Tax Identification Numbers (TIN). The proposed project will take this further by supporting the FIRS to re-engineer and automate its records management and document tracking processes.

2.4 Donor coordination The National Planning Commission (International Cooperation Department) has designated a desk officer to coordinate development assistance by each donor agency. Also, the NPC has developed a donors’ e-database (website still under construction) and there is a Donor Coordination Group that meets, as the need arises, to provide updates on projects. In addition, donors submit project quarterly progress reports to the NPC and share these among themselves. However, the implementation of phase 2 of NSPSR would need a more effective coordination system; hence, this project will support the BPSR to ensure effective coordination of donors' support for the implementation of the NSPSR. Along this line, the formulation of the NSPSR implementation action plan at MDAs level will provide the basis for donors programme integration ensuring that all key reform areas will be properly addressed.

3. DESCRIPTION

3.1. Objectives The overall objective of the project is to promote public sector policy and efficiency in public service administration in order to enhance service delivery and poverty reduction. The specific objective is to improve coordination of government's public service reform programme and strengthen capacity of government for policy planning, revenue generation, performance monitoring and development of statistics. Through its contribution to efficiency in public service administration, the project will enhance service delivery and poverty reduction. 3.2. Expected results and main activities The proposed project will focus on strengthening processes, systems, mechanisms and technical competences of staff in the five beneficiary agencies towards improving the efficiency of the public sector in the areas of policy planning, development of statistics, 3 The World Bank and DfID supported the federal government to implement these activities in 6 MDAs through

the Economic Reform Governance Project (ERGP)

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revenue generation and performance monitoring. Results and main activities that will be implemented in each of the beneficiary agencies include: Result 1: roles of reforming agencies are clearly defined and coordination of the reform process is effective Activities to support the relevant beneficiary agencies will include the following: - Support for study to rationalize and professionalize functions of key agencies driving the

reform process (OHCSF) - Support for development of a legal and administrative framework to coordinate the

reform process (OHCSF) - Support for drafting multi-annual operational plans for the implementation of NSPSR

(five beneficiary agencies) - Support for review (by government) of baseline indicators for the public service reform

programme (BPSR) - Support for coordination of project activities and implementation of the NSPSR (BPSR) Result 2: improved capacity for policy planning and forecasting. Activities to support the NPC will include the following: - Develop effective macroeconomic forecasting and modelling– with ICT Infrastructure and

in-house skills for optimal use of the system - Update the database and disaggregate data to reflect the entire economy - Develop training module on modelling including study tours - Procurement of equipment and software and installation Result 3: comprehensive and disaggregated statistics widely available for planning. Activities to support the NBS will include the following: - Enhance statistical production and coordination at MDA level - Enhance ICT establishment and application - Establish statistics networking system for seamless flow of data - Enhance capacity in survey, administrative data harmonisation and dissemination - Strengthen coordination mechanism for statistics reform process - Carry out social and economic surveys; administrative data collection, dissemination and

storage Result 4: Medium Term Sector Strategy (MTSS) based approach is adopted in preparation of annual budgets. Activities to support the relevant beneficiary agency will include the following: - Support for revision of MTSS, aligned with existing MTEF - Provide adequate training and mentoring to ensure that planning and preparation of annual

budgets are based on MTSS allocation (five agencies) Result 5: improved capacity for monitoring and evaluation of policy performance. Activities to support the relevant beneficiary agencies will include the following: - Support for development of an M&E strategy and the establishment of an integrated M&E

system including ICT infrastructure and (re)training (National Planning Commission (NPC))

- Carry out impact assessment of NSPSR - ICT applications for monitoring are established (five agencies)

- Provide adequate means of transportation for increased staff mobility for auditing and monitoring activities (NPC)

- Develop an effective NSPSR implementation monitoring and reporting system focusing on operational plans’ performance indicators (BPSR)

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Result 6: Public Financial Management Systems in use for accounting, recording and reporting purposes Activities to support the relevant beneficiary agencies will include the following: - Implement the e-learning capacity building strategy– with ICT applications and technical

assistance (OHCSF) - Implement the personnel payroll component of Integrated Personnel and Payroll

Information System. Specifically, project activities will be limited to providing support for data entry and validation by procuring the full service package. (OHCSF)

- Support for implementation of the new Chart of Account developed during the first phase of NSPSR (five agencies)

- Support for implementation of Integrated Financial Management System (GIFMIS) including (ATRRS) including strengthening in-house skills for optimal use of these systems (five agencies)

- Support training of staff on cash management; budget profiling and cash flow forecasting (five agencies)

Result 7: competences and skills of personnel in accounting and ICT applications strengthened. Activities to support the five beneficiary agencies will include the following: - Training and mentoring to improve in-house skills in the agencies for optimal use of the

public financial management systems; - Training of personnel in the agencies on accounting, financial management and ICT

applications Result 8: improved capacity to increase revenues from taxation. Activities to support the FIRS will include the following: - Establish an automated finance and administrative processes, enterprise collaboration and

document portal – ICT applications and training; - Re-engineer records management and document tracking processes - Develop training modules and deliver training in core areas of: self assessment, tax audit,

non-compliance enforcement and tax payer service, change management, record and project management.

3.3. Risks and assumptions The major assumptions are that: (i) there will be strong political support and commitment to ongoing governance reforms and that there will be no high turn over of staff in the various institutions that are driving the reform process within the context of this programme. (ii) agencies identified to drive the reform process will be committed to perform their responsibilities as enunciated in the NSPSR (iii) that the implementing agency which will manage the implementation of programme activities will be effective. The major risks are summarized in the table below:

Risks/potential adverse impacts Level Risk management strategy/measures Perceived risk of loss of employment at implementation and staff levels

Low Comprehensive training of senior and middle management to lead corporate change

Rivalry and reluctance from other agencies to cooperate with the Implementing Agency established by government

Low Members of Programme Coordination Committee (PCC) will be drawn from the five beneficiary agencies of the programme, and the committee will meet periodically to give feedbacks and get inputs on implementation.

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3.4. Crosscutting Issues There is no link between the project and the environment. The project addresses cross-cutting issues through promotion of good governance practices such as transparency and accountability. Good governance improvements are expected to be an effect of increased service delivery, transparency and performances of the public sector, achieved through the EU project.

3.5. Stakeholders The main stakeholders of the proposed project are: Office of Head of Service of the Federation (OHCSF), National Bureau of Statistics (NBS); Bureau for Public Service Reform (BPSR), Federal Inland Revenue Service (FIRS) and National Planning Commission. The OHCSF exercises overall authority and oversight on career management and manpower development in the federal civil service. The office plays a leading role in the implementation of the NSPSR, particularly in the area of performance management, organizational re-engineering, personnel management, civil service structure, procedures, and capacity building. The BPSR is the secretariat for the implementation of government's NSPSR. It is responsible for coordination, monitoring and evaluation of the reform process including testing of innovative procedures. The NBS is responsible for the development and management of official statistics in Nigeria; it coordinates the National Statistical System; develops and promotes the use of statistical standards and appropriate methodologies; develops and maintains a comprehensive National Socio-Economic Database. The NPC is the supervising agency for NBS. It is responsible for setting national goals, formulating national development plans, coordinating such plans at levels of government; monitoring policies and coordinating multi-lateral and bilateral economic co-operation, including development and technical assistance programming. The FIRS is responsible for the assessment, collection and enforcement of taxes in accordance with the Nigeria tax laws. The five institutions are key agencies for the implementation of NSPSR.

4. IMPLEMENTATION ISSUES

4.1. Method of implementation The project will be implemented by partially decentralised management through the signature of a Financing Agreement with the Government of Nigeria, in accordance with Articles 21-24 of the Financial Regulation of the 10th EDF.

1. Specific commitments. The National Authorising Officer will conclude and manage service and supply contracts for the implementation of operational component of the project:

a) A supply contract will be awarded in accordance with contract procedures for EU external actions. The supplies will be for provision of Information Communication Technology equipment (software and hardware) under the project

b) A service contract will be awarded in accordance with contract procedures for EU external actions. The Technical Assistance Team (TAT) recruited under the TA service contract will implement the part of the technical component of the project

The call for tender for the recruitment of the Technical Assistance Team will be launched with a suspension clause in view of the commencement of the project planned for the first semester of 2012.

The Technical Assistance Team (TAT), mobilised under the TA service contract, will be located in the designated Units within the Project Coordination Committee (PCC) and the Project Beneficiary Agencies (PIAs) to assist in the planning, implementation and monitoring of project activities, including the provision of:

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- Policy and technical advice to these agencies in the performance of their specific assignments under the project;

- Technical expertise tasks including policy advisory services, transfer of knowledge and skills, building technical capacities of personnel of the beneficiary agencies through mentoring, coaching or training;

- Administrative, preparatory and ancillary tasks relating to planning, monitoring, reporting on project components, procurement, and financial management;

- Management of operational and incidental expenditures (office running, travel costs and subsistence allowances for missions, outside the normal place of posting) provided under the TA service contract. This will be carried out by one of the long term experts.

2) Direct decentralised operation: The management and implementation of operating costs of the project shall be carried out through programme-estimates by the Bureau of Public Service Reform (BPSR). The costs will include per diems for government officials during missions outside Abuja, stationery, logistics for trainings and staff allowances for officials involved in the implementation of the project.

The Commission controls ex ante all the procurement procedures except in cases where programme estimates are applied, under which the Commission applies ex ante control for procurement contracts > EUR 50,000 and may apply ex post for procurement contracts ≤ EUR 50,000. The Commission controls ex ante the contracting procedures for all grant contracts

Payments are executed by the Commission except in cases where programmes estimates are applied, under which payments are executed by the beneficiary country for operating costs and contracts up to the ceilings indicated in the table below.

The responsible Authorising Officer ensures that, by using the model of financing agreement for decentralised management, the segregation of duties between the authorising officer and the accounting officer or of the equivalent functions within the delegated entity will be effective, so that the decentralisation of the payments can be carried out for contracts up to the ceilings specified below.

Works Supplies Services Grants

< EUR 300,000 < EUR 150,000 < EUR 200,000 ≤ EUR 100,000

The change of management mode constitutes a substantial change except where the Commission "re-centralises" or reduces the level of tasks previously delegated to the beneficiary country, international organisation or delegate body under, respectively, decentralised, joint or indirect centralised management.

4.2. Procurement and grant award procedures (programme estimates)

1). Contracts All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission, for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by Financial Regulation of the 10th EDF. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement.

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2). Specific rules for grants The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EU external actions. They are established in accordance with the principles set out in Title VII 'Grants' of the Financial Regulation applicable to the 10th European Development Fund. When derogations to these principles are applied, they shall be justified, in particular in the following cases:

– Financing in full (derogation to the principle of co-financing): the maximum possible rate of co-financing for grants should not exceed 80% of the total accepted costs of the Action. Full financing may only be applied in the cases provided in Article 109 of the Council Regulation on the Financial Regulation applicable to the 10th European Development Fund.

– Derogation to the principle of non-retroactivity: a grant may be awarded for an action which has already begun only if the applicant can demonstrate the need to start the action before the grant is awarded, in accordance with Article 108 of the Financial Regulation applicable to the 10th EDF.

3). Specific rules on programme estimates All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimates in question (i. e. the Practical Guide to procedures for programme estimates). The EDF financial contribution covers the ordinary operating costs deriving from the programme-estimates.

4.3. Budget and calendar The total project cost is estimated at EUR 20 000 000, financed from the 10th CSP/NIP for Nigeria in the framework of the revised ACP-EU Partnership Agreement. The budget is broken down as follows:

S/N Description EU Contribution (in EUR) % A TA Service Contract 12,000,000 60 B Supply Contract 3, 900,000 19.5 C Programme Estimates 1,600,000 8 Sub total 17, 500,000 D Monitoring & evaluation (Service Contract) 200,000 1 E Audit (Service Contract) 200,000 1 F Visibility (Service Contract) 300,000 1.5 Sub total 700,000 G Contingencies * 1,800,000 9 GRAND TOTAL 20,000,000 100 * Contingencies heading may be used only with prior agreement of the Commission The foreseen operational duration is 60 months from the signature of the Financing Agreement

4.4. Performance monitoring Key indicators for each result and activity (output and outcome) will be reviewed at the start of the project, allowing for continuous measurement of progress. In addition, impact indicators will be developed.

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Continuous technical and financial monitoring is the Beneficiary's responsibility. The Beneficiary shall establish a technical and financial, monitoring system to the project, which will generate progress reports and safeguard internal control. As part of project activities, the capacity of the National Planning Commission will be enhanced to monitor implementation of government governance policies regularly. 4.5. Evaluation and audit There will be a mid-term evaluation mission and a final evaluation to be carried out by the Commission through direct centralised management. The National Authorising Officer and EU Delegation will analyse the conclusions and recommendations of the evaluations and decide on follow-up actions to taken and any adjustments necessary. The Commission shall appoint, in accordance with EU procurement rules, an internationally recognised external auditor. The auditor's role shall include: - Monitoring the project’s expenditure and auditing on an annual basis the project's accounts

for submission to the Commission. - In case of programme estimates, ensuring that the segregation of duties between the

Authorising Officer and the Accounting Officer is in place and respected and that the monitoring of expenditure complies with the rules and procedures established in the practical guide to procedures for programme estimates.

4.6. Communication and visibility A communication and visibility Action Plan will be drawn up at the start of the project in accordance with relevant “EU visibility guidelines”. The visibility plan with detailed budget approved by the EU Delegation will be implemented through direct centralised management to ensure an integrated approach to the visibility of the project.

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Annex III

1. IDENTIFICATION

Title/Number NIGERIA - EU Niger Delta Support Programme

(CRIS NG/FED/022-910)

Total cost EUR 377,855,000 EDF contribution: EUR 200,000,000 – A-envelope International Development Association: USD 200,000,000 loan (approx. EUR 143,000,000) (joint co-financing) UNICEF: EUR 600,000 (joint co-financing) Contributions from State and Local Governments and Benefitting Communities: EUR 34,255,000 (parallel co-financing)


Project approach Joint Management with the World Bank Joint Management with UNICEF Partially decentralised management

DAC-code 152 15111 16020 140 16050

Sector Conflict prevention and resolution, peace and security Public Finance Management Employment policy and administrative management Water supply and Sanitation Multi-sector aid for basic social services

2. RATIONALE

2.1. Sector context Nigeria is a Federation of 36 states, a Federal Capital Territory, and 774 local government councils. According to the Nigerian Constitution (1999), the states and local governments have significant responsibilities for the provision of social services such as education, health, water and sanitation, rural roads and infrastructure, which have a direct impact on poverty. The quality of their public financial management affects service delivery and poverty reduction. The resources allocated by law to the states and local governments from the consolidated revenues of the Federation (24.72 and 20.60% respectively) are inadequate to carry out these functions. The Niger Delta region consists of 9 states4 and 185 local governments. The region is plagued by poverty, low human development and conflict, and youth unemployment with significant implications for security. Weak governance, accountability and transparency underline the key development challenges. Systemic and high level corruption, patronage and deep mistrust among key stakeholders characterise the governance structure in many states. The Niger Delta region has a complex set of stakeholders and actors who often have conflicting interests. Following the August 2009 Amnesty Programme targeting militant groups, a Programme of Disarmament, Demobilization and Re-integration (DDR) was initiated. Additionally, the 4Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo, and Rivers

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Ministry of Niger Delta Affairs, created in 2008, put forward in 2010 a Proposed Niger Delta Collaborative Development Framework setting out so-called 'Proposed Programme Elements' aimed at social sector and public investment interventions. The relative but fragile peace following the amnesty represents a window of opportunity for donors to support the peace process and contribute to sustainable development by addressing some of the development challenges through medium to long term development programmes beyond the DDR phase. The EU Niger Delta Support Programme (NDSP) addresses the priorities of the 10th EDF Country Strategy Paper/National Indicative Programme (CSP/NIP) under focal sector 1: Peace and Security and focal sector 2: governance and human rights. Assistance from the EU and other development partners towards improving the capacity and quality of governance systems as well as helping government to translate these into better public service delivery, particularly in the water and sanitation sector, will contribute to address some of the root causes of the conflict. The CSP/NIP also recognizes the role of civil society in raising awareness and fostering community development. The programme has also been elaborated in line with Nigeria's development objectives, as stated in several reform initiatives, such as the Seven Point Agenda, Vision 20:2020, the National and State Economic Empowerment and Development Strategies (NEEDS and SEEDS at federal and state level respectively).

2.1. Lessons learnt Several lessons learned from past and on-going projects, both in the Niger Delta (developed mostly by the World Bank and the EU) and in the EU focal states (WSSSRP, the Small Towns Water Supply and Sanitation Project), have informed the preparation of this proposal. They include: enhanced participation and ownership; strengthened demand-side governance; private sector active involvement and consultation; sustainability of training programmes; increased accountability and leadership through the identification of component champions; focus on the policy and institutional reform agenda; focus on states and LGAs levels, while maintaining links with the federal level for the National Water Law and Integrated Water Resources Management (IWRM) for overall coordination. Other lessons learned include the benefits of aggregating works contracts; limiting cost-sharing arrangements to finance works contracts to the States, LGAs and benefitting communities; promoting participation of local civil society organisations (CSOs) in community development initiatives and project implementation.

2.2. Complementary actions

Long-term interventions in the Niger Delta have been scarce, as the focus so far has been on the Amnesty and DDR programmes. Notable initiatives of relevance to this project include the 9th EDF MPP9 programme5 and the World Bank's Community Driven Development (CDD) projects - the Community and Social Development Project (CSDP)6, Fadama7 and Community Foundations. The WB's support programmes for public finance management (PFM) reform, at both federal and State levels, have been taken into account, in relation to Component 2. With regard to the water and sanitation component, worth mentioning are the on-going WSSSRP present in the six focal states, and the WSSSRP II proposed in AAP 2011. The project is designed to build on these existing programmes, aiming at providing additional resources for local development projects in the Niger Delta states, supporting (on-going) public financial management reforms, concentrating on creating employment opportunities for youth and supporting water and sanitation services. Additionally, the project will seek

5 covering all nine Niger Delta States and the Integrated Community Development Pilot project in Etung 6 focusing on provision of social services and natural resource management 7 focused on provision of productive goods in rural areas

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synergy with the representatives of the Debt Relief (MDGs) Office8 in the four states. The NDSP is expected to make a substantial contribution towards achievement of the MDGs in the core Niger Delta states, especially in regard to improved access of the population to potable water and basic social infrastructure.

2.3. Donor coordination The programme activities are designed to complement the activities of EU Member States, other international partners and intergovernmental agencies. Coordination with WB support programmes for economic governance and public financial management – whether on-going or under development - will be ensured. The implementation of subcomponent 1c will make use of existing institutional arrangements (under WB-assisted CDD programmes) to ensure efficiency and avoid creating new structures. The achievements of the programme will be shared with other development partners, in order to inform their work and avoid duplication of efforts.

3. DESCRIPTION

3.1. Objectives The overall objective of NDSP is to mitigate the conflict in the Niger Delta by addressing the main causes of the unrest and violence - bad governance, (youth) unemployment, and poor delivery of basic services. The NDSP is focused for the most part on the four core states of the Niger Delta: Delta, Bayelsa, Rivers, and Edo. The specific objectives are: 1) to enhance skills and opportunities for youth employment and access to socio-economic services; 2) to strengthen public expenditure management systems by supporting Public Finance Management (PFM) reforms in the four core states; 3) to enhance access to safe, adequate, and sustainable water, sanitation and hygiene services; 4) to support local communities' development initiatives and conflict alleviation.

3.2. Expected results and main activities

Objective 1: to enhance skills and opportunities for youth employment and access to socio-economic services Key results: (i) increase in the number of youths employed, (ii) increase in public works activities implemented by youth groups, (iii) youth empowerment; (i) increased access to skills acquisition (ii) improved quality of skills acquired and employability of graduates (iii) achievement of national accreditation of selected Technical and Vocational Training (TVT) courses; (ii) increased number of poor people with access to social services and natural resources infrastructure services. Key activities: • Tender and award contracts for small public works focused on road maintenance and

refuse collection, that will employ local youth for works, studies and supervision • Award grants to technical and vocational colleges, skill acquisition centres, and

agricultural training institutions based on reviewed and approved work plans • Provide technical assistance to implementing agencies for their oversight of the

contracts/grants programme • Provide support for community identification of needs and priorities and development of

Community development Plans (CDPs), review and approve the CDPs

8 The Debt Relief (MDGs) Office manages debt relief gains in the country, transferring conditional grants to the states for poverty-reduction related projects, including water supply and sanitation

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• Award grants to communities through Fadama and CSDP agencies (or State Agency) • Monitor and evaluate the implementation of CDPs and achievement of set objectives • Provide capacity development for the relevant State Agency responsible for community

development (in Delta and Rivers state, where no CSDP structures exist) • Establish a mechanism for citizen participation, monitoring and feedback in the

allocation and implementation of grants

Objective 2: to strengthen public expenditure management systems in the four states Key results: (i) Fiscal Responsibility, Public Procurement and Budget Laws reviewed, updated and submitted for approval to the State Houses of Assembly; (ii) improved efficiency and management of public financial resources, and more transparent allocation of resources for service delivery; (iii) improved personnel and payroll controls, financial reporting, expenditure controls and audit; (iv) strengthened public procurement systems and processes.

Key activities • Review existing finance management legislation; update financial regulations and/or

draft new ones, where applicable, • Institute a Multi-Year Budget Framework (MYBF) as the basis for annual budget

preparation and execution, • Support to selected pilot Ministries, Departments and Agencies (MDAs) responsible for

economic and social infrastructure and services in producing medium-term expenditure programmes,

• Review and modernise the accounting and financial reporting system and prepare new operating procedures manuals as needed.

• Strengthen revenue and expenditure forecasting; implement a cash management system • Review and restructure the Office of the State Auditor General (OSAG); review and

modernise audit methods, techniques and reporting, • Develop and implement State Integrated Financial Management Information Systems

(SIFMIS); draft detailed operation procedures manual • Review and draft public procurement bill to meet international best practice; develop

regulations • Establish a functional regulatory body - the State Public Procurement Regulatory

Agency, and strengthen their capacity; establish Procurement Units in procuring entities • Review Tax Law and develop Integrated Internal Revenue Bill (Edo and Bayelsa) • Review and advise on appropriate organizational structure for the BIR (Delta, Edo and

Bayelsa) • Provide capacity building and tailored training for staff of relevant agencies and MDAs,

members of the State Houses of Assembly etc. • Organise sensitization seminars on public finance management, budget formulation,

implementation and monitoring, public procurement etc. • Provide capacity building addressed at CSOs and media to increase engagement in

Public Expenditure Management, Budget, Public Procurement processes etc.

Objective 3: to enhance access to safe, adequate, and sustainable water, sanitation and hygiene services in urban and rural areas in the four states Main results are: improved institutional, policy, legal and financial framework in the water and sanitation sector in the four states, including an enhanced role and participation of civil society, and strengthened capacities of the water sector institutions in the four states, which will enable them to fulfil their mandate adequately through investment programmes at urban and rural levels, leading to enhanced access to safe sources of water and adequate sanitation services in urban/semi urban towns and rural areas. Key activities

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• Legal support to facilitate the completion of the water Bills in the states; • Implement capacity building actions for stakeholders to implement the water law and

adopt IWRM principles; • Support to the preparation of strategic plan with the objective to draw up a medium-

term expenditure framework; • Support to strengthen internal organisational structure of urban water agency for

enhanced service delivery; • Implement baseline surveys to collect data on status of access to water supply service

prior to project implementation; • Implement water supply works contracts, including supervision. • Grant to local CSOs to participate in sector reforms including to undertake

research/studies on environmental degradation and mitigation of its effects on water quality

Key results under the rural sub-component: LGAs' Water, Sanitation and Hygiene (WASH) Units9 upgraded as Departments and strengthened to effectively implement rural water supply and sanitation programmes; access to safe water supply service in rural communities increased; access to improved sanitation and hygiene promotion services in small towns and rural communities enhanced; a state monitoring and evaluation (M&E) system, linked to the national M&E system, set up. Key activities • Support for advocacy with policy makers on benefits of upgrading LGA WASH Units

to Departments; • Support to implementation of baseline studies to collect data on status of access to

water supply and sanitation services, and health situation and identify needs in the communities;

• Support to procurement of water works contracts and supervision; • Facilitate Community-led Total Sanitation (CLTS) in communities (including school

sanitation and hygiene promotion); • Prepare action plan for activities and investment taking into consideration the

requirement to integrate state M&E system with the national M&E system. Objective 4: to support local communities' development initiatives aimed at improved access to basic service infrastructure and income generating activities

Key results: Strengthened Community Governance through adoption of Community Development Action Plans (CDAPs) by Communities and Local Government Authorities; Increased equitable access to basic infrastructure services, income generating options and sustainable livelihood by women and men; improved social cohesion among village communities. Key activities • Contract organization and launch Open Call for Proposal (CfP) for CSOs/NGOs to

support the communities in the preparation and implementation of CDAPs and conclude grant agreements

• Training of NGO/CSO trainers • CDAP developed and executed by communities in partnership with LGAs,

9 Water, Sanitation and Hygiene Units in the Local Government Area (LGA) are responsible for implementing

rural water supply and sanitation in rural communities. These Units are often poorly staffed and funded. Upgrading these Units to Departments will improve their staffing and funding situation.

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• Micro-project proposals developed by communities/commodity groups, with support from CSOs and/or respective business organizations and in partnership with their LGA,

• Establishment of Project Implementation Committees in the communities; • Survey to assess the level of reference of the access to basic infrastructure in targeted

communities; • Prepare and agree technical and tendering documents (including for enterprise oriented

micro-projects) and adapt implementation procedures, where needed • Invitation to tender for works and supply contracts by the NPC; contracting by the

NAO; mobilisation of contractors, construction and staged disbursements; commissioning and acceptance of Works/Supplies by NAO and the Communities

• Training of Micro Projects Implementation Committee/enterprise technical personnel on technical operations/maintenance

• Conflict prevention/reduction activities implemented by NGOs • Environmental improvement actions implemented by NGOs

3.3. Risks and assumptions It is assumed that the Government will continue to attach importance to the Niger Delta region, and that the state and local governments will remain committed to implementing reforms and partnering with communities for improving access to basic services. Additionally, the implementing agencies driving the reform process are functional and have adequate capacity. Key risks are summarised below: Risks Level Risk Management measures

Change in political engagement and priorities, following the gubernatorial results of April 2011 (only one out of nine Governors in the ND States has changed).

Low Demand side governance activities are supported, including consultations with CSOs to enhance demand for reforms and transparency. Social accountability mechanisms are mainstreamed in the project.

Resurgence of violence Medium Limit activities in the high risk areas. Supervision visits can be conducted in neighbouring states. Project and objectives will be reviewed if security situation deteriorates.

Corruption and fraud Medium Constant supervision and monitoring from the WB team; involvement of PFMU and FDPFM10 in payment operations; social accountability and third party monitoring strengthened.

The implementing agencies/NPC are unfamiliar with WB fiduciary requirements and lack capacity to manage projects

Low On-going training programmes in the preparation phase; capacity building component activities included

Lack of interest by states due to relatively low content of urban works contracts of

Low Intensify advocacy on the necessity to consolidate governance reforms

10 PFMUs (Public Finance Management Units)/FPFMD (Federal Public Finance Management Division) are robust multi-donor and multi-project FM platforms, established in all states and at federal level respectively through the joint efforts of the Bank and the Nigerian government.

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the project. component as a foundation for sustainable water and sanitation services delivery.

3.4. Crosscutting Issues Gender equality as well as climate change and environmental considerations have been taken into consideration during the identification and formulation phase of the WB project proposal. Through its very objectives, good governance principles are at the core of the programme. Rights-based approaches have been used to ensure involvement and ownership by communities; additionally, women and youth are key members of the institutions and community organisations targeted.

3.5. Stakeholders The main beneficiaries of Components 1 and 2 are the four state governments with selected MDAs, and communities. Specifically, the direct beneficiaries of Component 1 are mainly youths who are unemployed and/or seeking to be trained in vocational and technical courses in order to find jobs or set up on their own. Additionally, training institutions and state ministries of education, state agencies responsible for public works and waste management will be provided with technical assistance. The beneficiaries of the community development sub-component are community groups and associations in the four states, including farmers, women groups and youths in the rural areas. The PFM component will support MDAs that deal with state public finance. These will include offices and staff of Ministries of Budget and/or Economic Planning, Finance, Due Process/Public Procurement, Board of Internal Revenue and State Houses of Assembly. Activities planned will vary between states and agencies depending on the level of progress with regard to PFM reforms. For the water and sanitation component (3), the State Ministries of Water Resources are the primary beneficiaries while the key stakeholders are the agencies responsible for IWRM, the State Water Boards (or Water Corporations), Rural Water Supply and Sanitation Agencies (RUWASAs) and the LGA's WASH Departments or Units responsible for rural water supply, sanitation and hygiene. These institutions will be direct beneficiaries of the programme. Additionally, at community level, the benefitting communities will be represented by their Water Consumers Associations (WCAs) in the semi urban areas, or the Water, Sanitation and Hygiene Committees (WASHCOMs) in the rural communities and these will be the direct beneficiaries of the capacity development activities of the component. Other stakeholders are the Parents-Teachers Associations (PTAs) and school pupils who will benefit from hygiene promotion and health education activities, as well as local NGOs/CSOs and the private sector.

For component 4, the key stakeholders are the local communities in the nine states of the Niger Delta region as a whole which have been involved with CSOs/NGOs through the MPP9 in the preparation of community development plans. Additionally, LGAs will be involved in the development of communities’ plans and micro-projects proposals.


4.1. Method of implementation

A Financing Agreement, covering all four components of NDSP, will be signed with the Federal Government of Nigeria in accordance with Articles 21 to 24 of the Financial Regulation of the 10th EDF.

COMPONENTS 1 and 2

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Joint management through the signature of an Administrative Agreement with the International Development Association (IDA) in accordance with Article 29 of Regulation (EC) No 215/2008 on the financial regulation applicable to the 10th EDF. IDA complies with the criteria provided for in the applicable Financial Regulation, and is covered by the 2009 Trust Fund and Cofinancing Framework Agreement concluded by the WB Group and the European Commission.

The choice of implementing partner was based on the WB's on-going work in the Niger Delta, its technical expertise and mandate in Nigeria. A programme proposal addressing youth unemployment, access to basic services and PFM reforms in the four core states in the Niger Delta region, to be financed by a USD 200 million special loan is currently under negotiation with the Federal Government of Nigeria, for subsequent approval by the WB Board.

COMPONENT 3

(a) Partially Decentralised Management Specific Commitments i) A Service contract will be awarded to a Technical Assistance Team (TAT) which willassist the NAO implement the technical component of the project activities under objectives 3a, 3b, and parts of 3c in the four states. The call for tender for the Technical Assistance Team will be launched with a suspension clause in order to ensure its mobilisation as quickly as possible before the actual commencement of the project.

ii) Supply contracts will be awarded. Supplies will include transport and communication equipment, Information and Communication Technology (software and hardware) as well as office equipment and vehicles.

iii) Works contracts will be awarded in the four states for the construction and rehabilitation/expansion of water supply facilities in urban and small towns. Private indirect decentralised operations (Programme Estimates)

The management and implementation of operational costs for civil servants involved in the implementation of this component will be through Programme Estimates carried out by the above mentioned TAT. The costs will include per diems for missions outside the normal place of duty, travels (international and local) and salary "top-up" for civil servants directly involved in the implementation of the component. The mid-term review will assess the capacity of the counterpart staff and the institutions in the States to carry out the management and the implementation of the activities of the components. Should this assessment be positive, the activities under programme-estimates would then be implemented as direct decentralised operations instead of private indirect decentralised operations.

The Commission controls ex ante all the procurement procedures except in cases where programme estimates are applied, under which the Commission applies ex ante control for procurement contracts > EUR 50,000 and may apply ex post for procurement contracts ≤ EUR 50,000. The Commission controls ex ante the contracting procedures for all grant contracts.


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< EUR 300 000 < EUR 150 000 < EUR 200 000 ≤ EUR100 000

The change of management mode constitutes a substantial change except where the Commission "re-centralises" or reduces the level of tasks previously delegated to the beneficiary country, international organisation or delegated body under, respectively, decentralised, joint or indirect centralised management.

(b) Joint Management with UNICEF The activities in the LGAs and rural areas will be implemented in joint management through the signature of a Contribution Agreement with UNICEF in accordance with Article 29 of Regulation (EC) No 215/2008 on the financial regulation applicable to the 10th European Development Fund. This organisation has been selected based on its international mandate, technical expertise and specific experience in Nigeria, and it complies with the criteria provided for in the applicable Financial Regulation. UNICEF is covered by the Financial and Administrative Framework Agreement concluded between the European Commission and the United Nations (FAFA).

COMPONENT 4

Partially Decentralised Management Specific Commitments i) A service contract will be awarded. The Technical Assistance Team (TAT) mobilised

under the service contract will assist the NAO implement the technical component of the project in the 9 states.

ii) Works contracts for the construction of the micro-projects. iii) Grants for the implementation of the activities related to the improvement of the social

cohesion in village communities. Public Indirect Decentralised Operations (Programme Estimates) A delegation agreement with a public law body governed by private law with a public service mission will be concluded by the NAO for the implementation of the capacity building and support to communities by CSOs sub-component, engaged through a call for proposals.

4.2. Procurement and grant award procedures

COMPONENTS 1 and 2: Joint management with an international organisation:

All contracts implementing the action are awarded and implemented in accordance with the procedures and standard documents laid down and published by the WB Group/IDA.

COMPONENTS 3 and 4

1) Contracts All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in

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question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the EDF. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement. 2) Specific rules for grants

The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EU external actions. They are established in accordance with the principles set out in Title VII 'Grants' of the Financial Regulation applicable to the 10th European Development Fund. When derogations to these principles are applied, they shall be justified, in particular in the following cases:

– Financing in full (derogation to the principle of co-financing): the maximum possible rate of co-financing for grants is 80% of the total accepted costs of the Action . Full financing may only be applied in the cases provided for in Article 109 of the Council Regulation on the Financial Regulation applicable to the 10th European Development Fund.


3) Specific rules on programme estimates All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimates in question (i. e. the Practical Guide to procedures for programme estimates). The EDF financial contribution covers the ordinary operating costs deriving from the programme-estimates. 4) All contracts for activities implemented by UNICEF11 are awarded and implemented in accordance with the procedures and standard documents laid down and published by the relevant International Organisation.

4.3. Budget and calendar The total project cost is estimated at EUR 377,855,000 of which EUR 200,000,000 shall be financed from the NIP in the framework of the revised ACP-EU Partnership Agreement, and EUR 34,255,000 from contributions of the State and Local Government and communities. For components 1 and 2, IDA will provide EUR 143,000,000 (USD 200 million). For component 3, UNICEF will contribute EUR 600,000.

Categories EU contribution

Local contribution

Other Total

EUR EUR EUR EUR Administration Agreement with IDA (Components 1 and 2)

80 000 000 143 000 00012 223 000 000

Component 3 56 000 000 8 350 000 600 00013 64 950 000Service Contracts 18 500 000 18 500 000Programme estimates 1 300 000 1 300 000

11 UNICEF implements activities under Component 3 only. 12 $200 million IDA loan (based on the May 2011 exchange rate) 13 UNICEF contribution under the Contribution agreement to be signed for rural activities (subcomponent 3b)

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Works 12 000 000 5 150 000 17 150 000Supplies 3 200 000 3 200 000Grants 1 000 000 1 000 000Contribution Agr. 20 000 000 3 200 000 600 000 23 800 000

Component 4 45 000 000 25 905 000 70 905 000Service Contracts 14 035 000 14 035 000Programme estimates 1 760 000 1 760 000Works 25 905 000 25 905 000 51 810 000Grants 2 500 000 2 500 000Technical and

financial verification 800 000 800 000

Comm/Visibility 600 000 600 000Monitoring, External Evaluation & Audit

900 000 900 000

Contingencies* 17 500 000 17 500 000TOTAL 200 000 000 34 255 000 143 600 000 377 855 000

* The European Union's contribution to the "Contingencies" heading may be used only with prior agreement of the Commission The foreseen operational duration, starting at the entry into force of the Financing Agreement, is 60 months.

4.4. Performance monitoring COMPONENTS 1 and 2 Monitoring and supervision missions will be carried out on a continuous basis by the implementing organisation, and European Commission representatives will be invited to participate, as specified in the Administration Agreement that will be signed with IDA. The logical framework will serve as the basis for measuring progress and final assessments. The baseline and performance indicators have been established and refined by the implementing organisation during appraisal and preparation phases (before the launch of the programme activities). COMPONENT 3 The programme implementing agencies will establish a continuous monitoring process as part of their responsibilities. The logical framework will serve as the basis for measuring progress and final assessments. The performance indicators measuring the implementation of the activities of the component and the performance of the main stakeholders to fulfil their mandates will be detailed during the initial six months of the implementation period. Additionally, inclusion of the CSOs in the field activities will enable independent monitoring of the component activities at state level and their reporting will be presented to the proposed State Project Management Group in each of the four states. COMPONENT 4 Continuous technical and financial monitoring is the Beneficiary's responsibility. The Beneficiary shall establish a technical and financial monitoring system to the project, which will generate progress reports and safeguard internal controls. The logical framework will serve as the basis for measuring progress and final assessments. Steering committees will participate in the performance monitoring of the project. Regular monitoring of this component will be performed by the Project Officer in charge in the Delegation. The Terms of Reference for the TAT will include reporting arrangements to ensure proper monitoring by the NAO and the EU Delegation. Besides, regular monitoring missions should be undertaken by the Delegation staff. Number and timing of these monitoring missions should be agreed with the NAO.

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4.5. Evaluation and audit There will be a mid-term evaluation mission and a final evaluation from the European Commission. For components 1 and 2, implemented through joint management, evaluation and audit will be conducted on an annual basis, in line with internal and external auditing procedures laid down in their rules and regulations. The EU delegation will be involved in the supervision missions organised by the WB team. For components 3 and 4, three external reviews will be undertaken, which will initially focus on the efficiency of the implementation arrangements. A total amount of EUR 900 000 is earmarked for monitoring and evaluation.

4.6. Communication and visibility Communication and visibility will include: i) visibility activities to be carried out by the selected implementing organisations in line with the Communication and Visibility Manual for EU External Actions and the EU-WB Joint Visibility Guidelines; ii) the visibility strategy will also have a separate budget for its implementation through direct centralised management to ensure maximum visibility of the EU intervention. These visibility activities will be contracted through service contracts.

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Annex IV

1. IDENTIFICATION

Title/Number NIGERIA – European Union (EU) Support to the Justice Sector

CRIS No NG/FED/021-747

Total cost EUR 28,000,000:

• EU contribution - EUR 27 000 000 – A envelope • UNODC contribution - EUR 1 000 000 • Federal Government of Nigeria contribution – in kind


Project approach:

• Joint management with the United Nations Office on Drugs and Crime (UNODC)

• Direct centralised management

DAC-code 15130

15210

Sector Legal and judicial development

Security system management and reform

2. RATIONALE

2.1. Sector context The justice sector is essential for upholding the rule of law and establishing a stable environment for economic growth and poverty reduction. The Federal Government of Nigeria has reiterated its commitment to reform and various policies (including its poverty reduction strategy - the National Economic Empowerment and Development Strategy (NEEDS) and a Vision 20:2020) which include a focus on reform of the justice sector. However, a lot of the initiatives since 1999 have led to recommendations many of which are yet to be implemented. Policies and plans continue to focus on ‘individual pillars’ – the police, courts and prisons – without fully acknowledging that justice is a sector that requires a sectoral approach. Recent recognition by the Federal Government of Nigeria for better coordination led to the creation of a Federal Justice Sector Reform Coordinating Committee (FJSRCC). But this initiative is still new and requires more consistent policy direction and support from the highest levels. Overall, the justice sector can only benefit from a holistic programme so as to overcome the following key problems: Limited capacity, skills and infrastructure: There is a general lack of capacity, basic tools and skills in the justice sector. The training institutions and staff are ill-equipped. This impacts directly on services and operational abilities. The Nigeria Prison Service (NPS) for instance is unable to provide adequate rehabilitation programmes for convicts and child detainees; investigations of the Nigerian Police Force (NPF) lack the quality to secure convictions; and lower court judges lack skills on current trends in justice administration, including child justice.

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Long delays in the administration of justice: There are undue delays in the trial of criminal cases and the resolution of civil disputes. The former results in high numbers of pre-trial detainees in prisons. Of the 42,000 prison inmates, 25,000 are Awaiting Trial Prisoners (ATPs). Pre-trial detention periods of over 10 years are common due to lack of coordination in the justice system and the use of complex procedures. Limited accountability, access to justice and compliance with human rights: Despite constitutional guarantees there are questions of torture, extra judicial executions, and inhumane detention conditions. The absence of effective oversight is a key factor. Moreover, most users of the justice system (women and children in particular) lack legal representation. Few have access to the federal Legal Aid Council (LAC).

2.2. Lessons learnt The main support to the sector has been the EU's Support to Law Enforcement against Economic and Financial Crimes (9 ACP UNI 8) with a component to strengthen judicial capacity and integrity implemented by the United Nations Office on Drug Crime (UNODC) and the UK Department for International Development's (DfID's) £30 million Security, Justice and Growth (SJG) project, which ended in April 2010. Key lessons from these interventions include: a holistic approach to supporting the sector is required to ensure progress for all stakeholders and to avoid that problems in one part lead to problems in the others; the hierarchical structure of most justice agencies require that interventions at state level must seek concurrence of their headquarters at federal level; support for sophisticated technology should be suitable for the local context; and engagement with civil society organisations (CSOs) ensures better monitoring of the reform progress.


The project builds on and consolidates the current EU support to strengthen capacity and judicial integrity in 10 states. The project will focus on supporting CSO coalitions to work in states where the project will be implemented, so as not to duplicate support to CSOs by the EU's European Instrument for Democracy and Humar Rights and DfID's Justice for All (J4A) project. The project will complement the DfID Justice for All project, which begins in October 2011 with a budget of £40 million. The J4A project aims to improve the capability, accountability and responsiveness of the key organisations in the sector. This project is designed to avoid the areas on which J4A has a strong focus and to target instead other areas and geographic regions that J4A does not cover. This project will introduce the Sector Policy Review Committee (SPRC) (policy level guidance mechanism) to complement technical level review and coordination (as conducted by the FJSRCC with J4A support) and ensure senior Government involvement in the creation of more consistent sector-wide policy environment. At a more technical level, the project will strengthen capacity in the prisons and judiciary through training development and building police competence in investigation and prosecution by the State Criminal Investigation Departments (SCIDs).

2.4. Donor coordination

Donor coordination has recently been improved through the creation of a justice donor group involving the EU, DfID, UNODC, UNICEF, UNDP, World Bank, USAID and the US Embassy. The group has developed a terms of reference (ToR) to strengthen coordination among members, and to ensure that technical level coordination matters are fed into policy level review groups. The Sector Policy Review Committee (SPRC) proposed under this project, which will bring together high level officials of the core

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justice institutions, will further contribute to strengthening donor coordination in this area.

3. DESCRIPTION

3.1. Objectives The overall objective is to contribute to improved governance and compliance with the rule of law in Nigeria. The specific objective (purpose) is to improve the effectiveness, accessibility, accountability, transparency and fairness of the justice system.

3.2. Expected results and main activities The expected results and key activities include:

1. Result 1: Increased coordination and development of sectoral policies in the justice sector: The strategy is to encourage stakeholders to act as a sector and thereby enable them to jointly plan and resolve common problems. The results expected are: coordination structures established and functional; legislation, policies and plans implemented; information management and sharing in the sector improved; and the capacity of the Federal Ministry of Justice (FMoJ) and the National Planning Commission (NPC) as lead agencies in the sector are strengthened. The key activities include:

1.1 Establish and support federal and state coordination committees 1.2 Advise and support advocacy activities for the adoption and implementation

of legislation, policies and plans, including on women and child rights 1.3 Develop and implement strategy for information management and sharing 1.4 Develop and disseminate monitoring and evaluation (M&E) tools; advise,

train and mentor FMoJ/NPC 2. Result 2: Training, research and operational capabilities of the judiciary and prisons

developed: The strategy is to enhance training capability to sustain the development of skills. The expected results are: improved quality of trainers and instructors and improved quality of training and research facilities. The key activities include:

2.1 Conduct training needs analysis, review curricula/methodology; provide training; implement staff development policy; support exchange visits

2.2 Provide teaching aides and operational support for prisons and judiciary 2.3 Establish judicial research centres in selected states

3. Result 3: Increased access to justice and compliance with human rights: The strategy

is to reduce pre-trial detention and ensure fair treatment for citizens. The results expected are: improved case flow; improved professionalism of police investigators and prosecutors; increased access to legal aid and respect for human rights; accountability systems strengthened. The key activities include:

3.1 Advise, develop and implement training for police investigators and prosecutors in the State Criminal Investigation Departments (SCIDs) Provide basic crime scene kits to SCIDs

3.2 Implement appropriate prison record and court case management systems 3.3 Develop operations and tools to reduce pre trial detention/prison congestion 3.4 Mapping of non state actors (NSAs); support for NSA rights awareness and

legal aid activities 3.5 Support to improve vocational facilities and effective use of prison farms 3.6 Review and implement prisons and judicial accountability mechanisms.

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• Inception Phase: There will be a six-month inception phase which will lead to the establishment of a functional project office and development of baseline data. The activities will include staff recruitment; baseline survey, finalisation of log frame and ToR for the governance structures, selection of states and design of exit strategy.

3.3. Risks and assumptions

The assumptions include: (1) The Federal Government of Nigeria will be committed to the rule of law and justice sector reform; (2) The coordination committees will enjoy Government support throughout the period of implementation; (3) The relevant training institutions will be rehabilitated by the Federal Government of Nigeria to support trainings under the project.

The Risks are: change of political leadership after the 2011 elections (high) which could affect government commitment to the project; relevant laws are not passed (medium) and inadequate government financial support (medium). Mitigation measures included in the project design are the creation of reform teams in stakeholder agencies which can push reforms even if the political environment changes, provision of support for strong advocacy for the adoption of laws and the establishment of coordination committees which will advocate for sufficient funding to the sector.

3.4. Crosscutting Issues

The project will address access to justice which is a core principle of human rights including the linked issues of gender and child rights, through training, awareness, and the development of policies and strategies for their effective enforcement. As a capacity building project, all curricula, etc. will mainstream human rights. Also by increasing the competence of the justice agencies to enforce laws, the project will contribute to improved governance.

3.5. Stakeholders

The main target groups are: the FMoJ, which coordinates the Federal Government of Nigeria legal matters and has made a commitment to accommodate the project's project management unit. The FMoJ lacks capacity in strategic planning, and cross-sectoral coordination; the Nigerian Prison Service which is seriously under-resourced and has a high level of congestion; the Nigerian Police Force which, though well staffed, lacks critical investigative skills; the judiciary including the lower courts and the National Judicial Institute (NJI) which will benefit from improved capacity of NJI trainers and ultimately of judges of the courts; the NPC which is responsible for coordinating all donor assistance but lacks the capacity to coordinate an inter-sectoral justice project; and NSAs like the Nigerian Bar Association and a few CSO networks.

The direct beneficiaries include ordinary Nigerian men, women and children, and people with disabilities whether as victims or suspects of crime and persons or organisations seeking enforcement of their rights including contracts.

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4.1. Method of implementation

A financing agreement will be signed with the National Authorising Officer (NAO) of Nigeria

Direct centralised management will be used for the overall project visibility and evaluation/audit. These activities will be implemented through service contracts. The activities will be implemented in Joint management through the signature of agreement/s with the United Nations Office on Drugs and Crime (UNODC), in accordance with Article 29 of the Regulation (EC) No. 215/2008 on the financial regulation applicable to the 10th European Development Fund. The UNODC has a UN mandate in this area, as contained in various resolutions of the UN bodies, to assist member states reform their criminal justice systems14. It has developed technical expertise in the specific area of police, judiciary and prisons reform around the world; training and transferring skills; advice on law reform and development of normative guides, manuals, tool kits and reports on best practices. It has considerable experience in Nigeria where it is currently implementing a UK government funded support to the prison service, and the EU support to the Economic and Financial Crimes Commission (EFCC) and has built confidence with stakeholders and achieved progress with judicial reform in 10 states. The international organisation complies with the criteria provided for in the applicable Financial Regulation. The UNODC is covered by the Financial and Administrative Framework Agreement concluded between the European Commission and the United Nations (FAFA). A contribution agreement based on the FAFA will be signed with the UNODC for the implementation of the project.


Activities implemented through direct centralised management:

All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question.

Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the Financial Regulation applicable to the 10th EDF. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement.

Activities implemented by joint management:

All contracts implementing the action will be awarded and implemented in accordance with the procedures and standard documents laid down and published by the international organisation concerned.

14 See ECOSOC resolutions 2007/12 ; 2006-2010 and 2006/25

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4.3. Budget and calendar The indicative budget breakdown is as follows:

Categories EU contribution Government contribution

UNODC contribution

Total

EUR EUR EUR EUR Contribution agreement 25 000 000 0 1 000 000 26 000 000Visibility/Communication 500 000 0 0 500 000Contingencies 1 000 000 0 0 1 000 000Monitoring, External Evaluation and Audit 500 000 0 0 500 000TOTAL 27 000 000 0 1 000 000 28 000 000

The contribution of the beneficiary country is in kind (including office accommodation). The service contracts for visibility and evaluation will be launched after the signature of the Contribution Agreement. The foreseen operational implementation phase is 48 months that starts from the entry into force of the Financing Agreement.

4.4. Performance monitoring

The logical framework will serve as the basis for measuring progress and final assessments. Baseline indicators will be fully developed at the inception phase. Good monitoring and evaluation practices will be embedded in the design and implementation of activities. A Project Management Committee will be set up to monitor implementation of the project through reports and workplans submitted to it and ensure that potential changes in the project are shared and agreed with stakeholders.

4.5. Evaluation and audit The project will be subjected to mid-term and final evaluations by independent experts. The Project Management Committee, the National Authorising Officer and EU will analyse the conclusions and recommendations of the mid-term review and decide on the follow-up action to be taken. Audit of the Contribution Agreement shall be undertaken in line with the Financial and Administrative Framework Agreement .

4.6. Communication and visibility A visibility strategy will be developed and agreed during the project inception phase. Visibility activities will ensure that all stakeholders are aware of the contribution of the EU. The EU will pay particular attention to ensure that the Joint Visibility Guidelines are carefully followed. Provision is also made in the budget for the European Commission to directly contract visibility activities.

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Annex V

1. IDENTIFICATION

Title/Number Support to anti-corruption in Nigeria CRIS No NG/FED/2011/22161

Total cost EUR 35 000 000 EU contribution: EUR 35 000 000 - A envelope United Nations Office on Drug Crime (UNODC) contribution: in kind


Project approach 1) Joint management with international organisation (UNODC) 2) Direct Centralised Management

DAC-code 15113 Sector Anti-corruption organisations and institutions

2. RATIONALE

2.1. Sector context Strengthening integrity and reducing corruption has been a priority for Nigeria for a number of years. Corruption is endemic in the country – both high-level corruption and administrative corruption pose a threat to the stability and sustainable development of Nigeria. Over the past decade, Nigeria’s Corruption Perception rating has improved somewhat.15 Anti-corruption legislation has been adopted, anti-corruption institutions have been set up and international instruments (UNCAC) have been ratified. Nonetheless, Nigeria is still considered one of the most corrupt countries in the world. Nigeria is in the process of adopting its first coordinated anti-corruption policy, strategy and action plan through a dedicated Inter Agency Task Team (IATT). Beyond this work of the IATT, there are so far no systems or procedures of anti-corruption policy coordination, implementation and monitoring. Corruption-related research is limited and not sufficiently connected to policy making. Though the existing legal framework could be improved further, it appears adequate overall, and provides a fair basis for anti-corruption agencies to conduct their work. The most significant challenge is that Nigeria’s anti-corruption sector is fragmented and poorly coordinated. To a certain extent this is a result of a lack of political will; more importantly, it reflects national specificities in establishing and operating public institutions, organizational traditions and a lack of practical skills for coordinated action. The capacities of law enforcement and prevention agencies are weak. Some agencies are performing better than others, but overall the number of indictments and convictions is disproportionately low compared to the number of corruption complaints. There is no practice of proactive prevention, intelligence collection or investigation. This is not due to a lack of resources as the budgetary allocations for the main anti-corruption agencies are quite substantial.

15 Nigeria’s CPI score was 1.0 in 2001 compared to 2.4 in 2010; it ranked second-to-last in 2001-3 versus 134th out of 178

countries in 2010. Source www.transparency.org.

http://www.transparency.org/

http://www.transparency.org/

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The capacity of civil society to advocate for governance reforms is limited; and more corruption awareness raising efforts are needed to change the widespread acceptance of corruption as a fact of life in Nigerian society.

2.2. Lessons learnt This is the second EU-funded project on anti-corruption in Nigeria. Two Results Oriented Monitoring (ROM) exercises conducted during the previous project "EU Support to Law Enforcement against Economic and Financial Crimes"; June 2007 and July 2009), provided useful recommendations to improve the implementation of activities. The findings of the mid-term evaluation (May 2009) and final internal evaluation (November 2009) have also been taken into account. The following key lessons have been learned from previous support under the 9th EDF (2005-2010) and UK Department for International Development (DfID), USAID and World Bank (WB) interventions: i) Fighting corruption in Nigeria requires a multi pronged approach, encompassing policy coordination, prevention, law enforcement and education; ii) Support should be integrated, focused on capacity and targeted to the right stakeholders; iii) Support should build on regular and open communication with stakeholders and donors; iv) The level of commitment, role, performance and involvement varies a lot amongst anti-corruption agencies. Strong commitment on the national side is needed to ensure successful project implementation; v) Building on achievements of previous support is key in order to move forward; and vi) Promoting cooperation/coordination of anti-corruption agencies is of crucial importance.

Multiple assessments have been conducted on the Economic and Financial Crimes Commission (EFCC), other anti-corruption agencies (ACAs), and the judiciary by the previous project and by UNDP. The justice sector integrity and capacity assessment and the EFCC evaluation have made it possible to measure achievements of EU/UNODC support to the EFCC and the judiciary under the previous project and are useful in drawing lessons for the upcoming project in seeking ways to further consolidate the achievements and develop new initiatives.


Opportunities exist to engage and coordinate with EU Member States and others in the project implementation phase (UK DfID, Norway NORAD). Norway supported democratisation, anti-corruption activities and conflict resolution through the UN Development Programme (UNDP). EU MS have showed interest in anti-corruption projects and initiatives. The UK-funded project "Justice 4 All" (started in March 2010) includes a component on anti-corruption (£5 million) that will support the anti-corruption strategy and provide training to anti-corruption agencies including the Independent Corrupt Practices Commission (ICPC), the Code of Conduct Bureau (CCB) and the Special Control Unit on Money Laundering (SCUML). DfID’s programmes to tackle corruption in Nigeria include a £30 million on-going Security, Justice and Growth (SJG) programme, which addresses corruption within the judiciary and also supports the Economic and Financial Crimes Commission. The UK also provides £7.5 million support to the civil society programme Coalitions for Change, which brings together civil society and government to address issues of procurement and transparency in key ministries. DfID have supported Nigeria’s Extractive Industries Transparency Initiative (NEITI) which aims to generate greater transparency in the flow of revenues from extractive industries. Current and proposed support to the National and State Houses of Assembly are intended to strengthen oversight and increase transparency. To complement the specific anti-corruption work,

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DfID supports improved public finance management at state level through the £42 million programme on Accountability, Responsiveness and Capability (SPARC). DfID also provides ₤34 million to support public sector reform. The UK’s Serious Organised Crime Agency (SOCA) supports Nigerian law enforcement and the Nigerian Postal Services to improve their capacity to intercept fraudulent documents destined for the UK. A US$ 80 million five-year Democratic Governance for Development Project started in 2010, involving the EU, DfID, CIDA, and the Republic of Korea. UNDP contributes to and implements the programme. The project includes working in six pillars related to political corruption.

2.4. Donor coordination The Development Partners on Political Governance group, chaired by UNDP, involves international organizations, international non-governmental organizations and embassies. The Justice Sector Donor Coordination Group comprises EU, UNODC, UNDP, USAID, DfID, UNICEF and the World Bank. This platform meets on a regular basis and shares information on justice and anti-corruption initiatives in the country. The aim is to avoid duplication of tasks among donor interventions.

3. DESCRIPTION

3.1. Objectives The overall objective of this project is to promote good governance and contribute to Nigeria’s efforts in enhancing transparency, accountability and combating corruption. The purpose of the project is to: i) provide effective support to anti-corruption coordination, policy formulation and legislation, based on a sound evidence base; ii) strengthen institutional and operational capacity in the eight main anti-corruption agencies16, with an emphasis on cooperation; and iii) enhance accountability, transparency and public engagement in the fight against corruption.


Component 1: Strengthening anti-corruption policy-making, coordination, research, monitoring, and legislation Result 1.1: A coordination mechanism for the implementation of the anti corruption strategy is in place Result 1.2: A monitoring and evaluation (M&E) system for the National Strategy to Combat Corruption is set up and running Result 1.3: Research capacities are enhanced to facilitate an evidence-based AC policy Result 1.4: Legislative drafting capacity and anti-corruption laws strengthened The main activities will include: Activity 1.0: Baseline studies, capacity/gap/needs analysis, review of work plan and logframe. Activity 1.1: Rapid assessment and survey design for the coordination mechanism. Expert advice and provision of capacity building and training to the stakeholders involved, in particular to the Technical Unit on Governance and Anti-Corruption Reforms /IATT.

16 The Bureau for Public Procurement (BPP), the Bureau of Public Sector Reform (BPSR), the Code of Conduct

Bureau/Tribunal (CCB/CCT), the Economic and Financial Crimes Commission / Nigerian Financial Intelligence Unit (EFCC/NFIU), the Independent Corrupt Practices (and Other Related Offences) Commission (ICPC), the Public Complaints Commission (PCC), Special Control Unit on Money Laundering (SCUML under FMC&I), and the Technical Unit on Governance and Anti-Corruption Reforms / Inter-Agency Task Team (TUGAR/IATT).

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Activity 1.2: Design of monitoring and evaluation system. Policy and expert advice to related stakeholders. Develop a manual and protocols for ACAs and set up the M&E system. Activity 1.3: Identification of stakeholders involved in corruption related empirical research and anti-corruption policy analysis. Facilitate/support research projects, both financially and with expertise. Activity 1.4: Review existing laws and assess needs, bottlenecks and capacity gaps. Design, delivery and review of legislative training package in consultation with national stakeholders. Component 2: Institution building for anti-corruption Result 2.1: Institutional development strategies based on management reviews are implemented Result 2.2: Corruption prevention capacity is bolstered (skills, tools and procedures) Result 2.3: Anti-corruption law enforcement capacities are further developed17 Result 2.4: ACAs work effectively through joint operations based on shared data and analysis Result 2.5: ACAs effectively cooperate with regional and international partners

The main activities will include: Activity 2.0: Baseline studies, capacity/gap/needs analysis, review of work plan and logframe Activity 2.1: Conduct management reviews and prepare institutional development strategies/plans Activity 2.2: Assess training needs with regards to corruption prevention capacity. Design, prepare and conduct general and specific trainings and capacity building. Activity 2.3: Assess, design, prepare and conduct trainings and capacity building with regards to law enforcement capacities (intelligence, investigations, prosecution and adjudication). Activity 2.4: Assess the existing systems with regards to inter-agency cooperation in preventing and combating corruption. Technical advice and provision of data sharing systems. Training and coaching to ensure proper utilisation of systems. Activity 2.5: Consult on potential partnerships to effectively cooperate with regional and international partners. Facilitate joint operations with a focus on capacity building. Component 3: Empowered participation of society Result 3.1: Civil society organisations’ expertise and capacity for anti-corruption are strengthened Result 3.2: Grant scheme to support the sector is in place and running efficiently Result 3.3: Civil society anti-corruption networks expanded and strengthened Result 3.4: Public participation is enhanced through awareness raising and citizen engagement The main activities will include: Activity 3.0: Baseline studies, capacity/gap/needs analysis, review of work plan and logframe

17 Focus is given to intelligence, investigations, prosecution and adjudication.

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Activity 3.1: Assessment/mapping of current and potential civil society organisation (CSO) stakeholders, including business associations. Consult on effective needs-based capacity-building strategy and specific work-plans to improve the expertise and internal capacities. Activity 3.2: Design and implement a grants scheme to improve operational, research capacities and advocacy anti-corruption initiatives. Seminars to the beneficiaries CSOs Activity 3.3: Assess current and potential anti-corruption CSO stakeholders, consult on effective cooperation strategy and facilitate its implementation Activity 3.4: Assess opportunities for anti-corruption citizen engagement. Facilitate implementation of the strategy with relevant United Nations agencies, ACA and CSO partners. Direct support to initiatives that enhance public participation in the fight against corruption (public campaigns or others).

3.3. Risks and assumptions

The proposed project relies on the following assumptions: i) The Federal Government of Nigeria will continue to attach importance to anti-corruption issues in the political agenda, showing commitment in the provision of human and financial resources and developing ACAs’ mandates and tasks; ii) there are credible NSA/CSOs ready and willing to participate in the implementation of the project and the anti-corruption strategy, and iii) there is no major political instability in the next five years. The major risks are summarised in the table below: Risks/potential adverse impacts Level Risk management strategy/measures

Influence of those involved in corruption at the highest level.

High The project will strengthen institutions and processes that can bring about lasting change beyond the influence of such individuals.

Duplication of mandates and functions between ACAs.

High Efforts will be made to encourage ACAs involved to agree on a clearer division of responsibilities

Mainstreaming anti-corruption meets institutional resistance/ inertia.

High Action within selected MDAs will be initiated only upon demonstrated commitments of respective leadership.

Lack of absorption/management capacity of stakeholders.

High Capacity assessments will be conducted and capacity building will be needs-based.

Staff trained under the project may be transferred to other departments.

High The selection of participants will be discussed with managers. A written commitment will be required to ensure that they stay in post for at least three years after training.

Lack of practical will to cooperate at operational level within target institutions.

High Action within selected ACAs and ministries, departments and agencies (MDAs) will be initiated only upon demonstrated commitments of respective leadership.

The anti-corruption strategy is not formally adopted during the duration of the project.

Medium The project will support the adoption/implementation of the strategy at all levels. By including key elements of the strategy in institutional development plans, the project can circumvent potential delays in the legislative process.

The Sector Policy Review Committee does not link operations and policies.

Medium The project emphasises outreach and advocacy, both to high-level decision-makers and other stakeholders, to ensure that actions follow words.

3.4. Crosscutting Issues The main crosscutting issues with relevance to the project are good governance and human rights. Both are directly addressed by the implementation of this project. Corruption hampers economic growth and is both a cause and consequence of institutional weaknesses; it disproportionately hurts the poor and the disadvantaged in the country. Thus, by fighting corruption and promoting good governance, the project

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supports human rights in Nigeria, especially in terms of economic, social and cultural rights.

The efforts relating to legislative review, human resource development, public enlightenment and case management will take into account cross cutting issues of gender and human rights. Activities on the legislative framework and law enforcement will take into consideration the protection of human rights and the potential effect of the crime of corruption and corrupt practices on the environment. The human resource development and public enlightenment activities need to balance both sexes and be sensitive to gender-specific needs.

3.5. Stakeholders The main direct beneficiaries of the project can be divided into three groups according to the components of the project: i) A first group includes public institutions directly involved in the coordination of the anti-corruption strategy and the action plan (the Presidency, Federal Executive Council (FEC), anti-corruption agencies (ACAs), the National Assembly, research institutes and think tanks. TUGAR and the IATT play an operational role; ii) A second group comprises anti-corruption agencies (the Bureau of Public Procurement, Bureau of Public Sector Reform, Code of Conduct Bureau/Code of Conduct Tribunal, Economic and Financial Crimes Commission/Nigerian Financial Intelligence Unit, Independent Corrupt Practices (and Other Related Offences) Commission, Public Complaints Commission, Special Control Unit on Money Laundering, TUGAR/IATT) and other MDAs involved in implementing government policy on anti-corruption (e.g. Office of the Auditor General of the Federation and Nigerian Extractive Industries Transparency Initiative) which may be involved in certain project activities; ii) Civil society organisations, universities, business associations, private sector organisations and professional groups are part of the third group that will play an important role when it comes to prevention, advocacy and monitoring of anti-corruption related activities. The final beneficiaries are Nigerian citizens at large who will benefit directly from the public awareness and dissemination campaigns and indirectly from better delivery of services through improved management of public resources and reduced corruption.


4.1. Method of implementation A financing agreement will be signed with the National Authorising Officer of Nigeria

Direct centralised management will be used for overall project visibility activities and evaluation/audit. These activities will be implemented through service contracts.

Joint management through the signature of contribution agreement/s based on the FAFA with the United Nations Office on Drugs and Crime (UNODC) for the implementation of the project, in accordance with Article 29 of the Regulation (EC) No 215/2008 on the financial regulation applicable to the 10th European Development Fund. This organisation has been selected based on its international mandate, technical expertise and specific experience in Nigeria. The international organisation complies with the criteria provided for in the applicable Financial Regulation. UNODC is covered by the Financial and Administrative Framework Agreement concluded between the European Commission and the United Nations (FAFA). The project will be implemented in close coordination and where appropriate, cooperation with other UN agencies. These may bring to the project their expertise in dealing with civil

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society, corruption prevention, capacity assessments and capacity building, while also supporting the project implementation with their own resources.

In due consideration of the principle of ownership, the European Commission reserves its right to change the organisation indicated above or the scope of the delegation, without this necessarily requiring an amendment to the financing agreement. In that case, it shall consult the Beneficiary on this change and notify to it the name of the new organisation and/or the scope of the task(s) delegated to it.

4.2. Procurement and grant award procedures Activities implemented through direct centralised management:

All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question.

Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the Financial Regulation applicable to the 10th European Development Fund. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement.

Activities implemented through joint management:

All contracts implementing the action are awarded and implemented in accordance with the procedures and standard documents laid down and published by the relevant International Organisation. The contribution agreement with UNODC will be signed immediately after the signature of the Financing Agreement, tentatively in Q4 2011. The service contract for visibility will only be launched after the conclusion of the inception phase of the project.

4.3. Budget and calendar The indicative breakdown is:

EU contribution

UNODC contribution

Total Categories

EUR EUR EUR Contribution agreement with UNODC 34 000 000 0 34 000 000Communication/visibility 500 000 0 500 000Monitoring and external evaluation 500 000 0 500 000TOTAL 35 000 000 0 35 000 000

The anti-corruption agencies will provide office facilities and second senior employees and administrative staff to the project to assist in the implementation of part of the activities. The foreseen operational duration is 60 months as from signature of the Financing Agreement.

4.4. Performance monitoring The project will be closely monitored by the implementing agency. To this aim, the agency (UNODC) shall establish permanent internal monitoring system to the project which will be used to elaborate the progress reports including progress towards target values for key indicators.

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The logical framework will serve as the basis for measuring progress and final assessments. The performance indicators measuring the implementation of the activities of the project and the performance of the main stakeholders to fulfil their mandates will be further detailed during the inception phase. These indicators will be based on available statistics, supplemented by data generated through the efforts of the project. The implementing agency will conduct baseline studies (target values before/after action), prepare a procurement plan and refine and adjust the indicative logframe during the project inception phase (first six months). Indicators will also be adjusted throughout project duration. The Commission may carry out results oriented monitoring via independent consultants, starting from the sixth month of project activities, which will be finalised at the latest six months before the end of the operational implementation phase.

4.5. Evaluation and audit The project will undergo a mid-term and a final evaluation, to be carried out by the European Commission through independent consultants. For the part of the project implemented through joint management, audit and internal control of management operations will be conducted by the implementing agency (UNODC) in line with the internal and external auditing procedures laid down in their financial regulations, rules and directives. A total amount of EUR 500 000 is earmarked for monitoring and evaluation.

4.6. Communication and visibility

Communication and visibility will include: i) visibility activities to be carried out by the selected implementing agency in line with the Communication and Visibility Manual for European Union External Actions. In this case, the activities implemented by the implementing agency (UNODC) FAFA provisions on visibility will apply; ii) the visibility strategy will also have a separate budget for its implementation through direct centralised management to ensure maximum visibility of the EU intervention. These latter visibility activities will be contracted through service contracts.

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Annex VI

1. IDENTIFICATION

Title/Number Fighting drugs and organised crime in Nigeria

CRIS No NG/FED/22512

Total cost EUR 36 000 000 EU contribution: EUR 36 000 000 - A-envelope

Joint co-financing with UNODC.

UNODC contribution (in kind): will be determined in the inception phase and along the lifespan of the project

Nigerian Government contribution: in kind


Project approach

1) Joint management with international organisation (UNODC)

2) Direct Centralised Management

DAC-code 16063 Sector Narcotics Control

2. RATIONALE

2.1. Sector context Nigeria has been facing considerable challenges from drug production, trafficking and use. There is limited information on the scale of any of the three aspects, but the high profile of Nigerian drug traffickers, particularly in drug courier operations in Africa, Asia and Europe, has led the country to be decertified by the US State Department in the past. The issue of drug trafficking in West Africa has become a main concern for the international community. In My, the G8 Ministers of Interior adopted an Action Plan on Transatlantic Drug Trafficking Focussing on promoting capacity building in the region. The implementation of the Action Plan was subsequently discussed at the EU/US Symposium on Dismantling Transnational Illicit Networks, where it was decided to create a network of practitioners form all continents involved. The Inter-Ministerial Committee on Drug Control (IMCDC) is charged with a key role in the formulation of drug policy and was responsible for supervising the drafting of the National Drug Control Master Plan (NDCMP) 2008–2011. Most of the stated goals are yet to be attained, and the IMCDC has not been very pro-active in terms of leading a coordinated effort to effectively implement the NDCMP, partly due to the lack of technical and operational capacity of national stakeholders in this sector. Efforts by the Government and particularly the specialised Nigerian Drug Law Enforcement Agency (NDLEA) founded in 1989 with a mandate for all actions relating to illicit drugs have delivered results, including the United States certification and recognition by EU law enforcement agencies. The NDLEA staff complement of 3,405 (2009) is currently being expanded by a recruitment drive. Internal management systems are well-structured and staff commitment is high by Nigerian standards. Working in a challenging environment, the agency does go through continuing quality improvements and has a promising basis for improved investigative capacity.

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The organisational culture of NDLEA and the prioritization of supply side activity in terms of resource and management time, makes it less inclined to focus on demand reduction activities. Psychiatric hospitals have developed some skills and training capacity, but are not the appropriate locations for drug treatment by international standards. Many Nigerians have to rely on poorly resourced civil society organisations (CSOs) for drug prevention, treatment and care.

2.2. Lessons learnt It is the first time that the EU/EDF funds a project in this sector in Nigeria. Given the size of the country and the nature and magnitude of the problem, the project is to effect synergies between organised crime and drug control efforts. The focus on raising law enforcement capacity is based on the experience of the NDLEA as committed to capacity building and sustained training efforts. Training has to be delivered against needs, to be built up from basics and sustainable beyond the scope of external project support. Inter-agency training should support law enforcement cooperation and information sharing. Demand reduction training demand goes beyond the training provided so far by UNODC TreatNet. In civil society, skill training needs to be backed by material resource provision to deliver end results. Resource provision has to be carefully benchmarked against outcomes and monitored. Successful implementation depends on a sense of ownership, to which end dedicated project managers should be appointed among beneficiaries to take responsibility for managing implementation and to report to the joint operational project management structure.

2.3. Complementary actions The EDF-funded projects under preparation in related areas include: “Promoting better management of migration in Nigeria" (EUR 20 million), “Support to anti-corruption in Nigeria” (EUR 35 million) and the "Support to the Justice sector in Nigeria" (EUR 28 million). The past project "Support to the Economic and Financial Crimes Commission and the Nigerian Judiciary” (EUR 24.7 million) implemented by UNODC has enhanced the capacity of the Economic and Financial Crimes Commission (EFCC) in developing anti-money laundering activities. At regional level, the "EU Support to the Economic Community of West African States (ECOWAS) Drug Action Plan" (EUR 16 million) should promote inter government cooperation at agency level and the ongoing "Supporting the fight against organised crime on the cocaine route" is directly complementary to this project. Besides, the EU-funded Instrument for Stability (IfS) is exploring the possibility to support the fight against money laundering in West Africa. Both France and Germany provided training on advanced investigation techniques to the NDLEA in 2009. The United States has supported the NDLEA with training and the provision of equipment, particularly scanning machines at the Lagos and Kano international airports. There has been further provision of equipment, training and on the job skill building during joint operations as between the UK Serious and Organised Crime Agency (SOCA) and the NDLEA under “Operation Westbridge”. The UK Department for International Development (DfID) project “Access to Justice” completed in 2010 has invested UK£ 40 million across the criminal justice sector, but not including NDLEA. The ongoing UK DfID project "Justice 4 All" also has linkages with the present project. UNODC is promoting the “West Africa Coast Initiative (WACI)” that will support actions in different countries in West Africa. With regards to drug demand reduction and HIV/AIDS prevention, UNODC implements several regional initiatives in West Africa. The Centres for Disease Control and Prevention (CDC) and the Global Fund have invested funds in harm reduction, while "Enhancing Nigeria's Response to HIV/AIDS" with support from UK DfID has supported rehabilitation activities.

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2.4. Donor coordination

The project activities are designed to support and enhance the activities of EU Member States, other international partners and intergovernmental agencies. The mini-Dublin Group and the Justice Sector Donor Coordination Group are existing donor coordination platforms related to the sector that meet on a regular basis. For national and international coordination the programme will explore the possibility to set up a Working Group on Drugs and Development in the framework of the Nigeria-EU Political Dialogue that is also used to enhance the coordination between EU Member States. Provisions are made in the project management arrangements to share information regularly with international partners and to feed the achievements of the project, particularly with regards to information and evidence, policy making, legal reform and demand reduction activities to all interested parties.

3. DESCRIPTION 3.1. Objectives

The overall objective is to promote good governance and security in Nigeria. The project purpose (specific objective) is to support Nigeria´s efforts in fighting drug production, trafficking, and use, and curbing organised crime in the country. The project aims: i) To support policy formulation and improve drug legislation and coordination of the sector; ii) To improve law enforcement capacity in drug control and tackling organised drug-related crime, and iii) To enhance drug prevention, treatment and care services, adapted to Nigerian conditions.


The project supports activities at the nodal points where drugs and organised crime interlock, in line with EU Drug Policy and its "balanced approach". The national capacity to tackle drug trafficking and organised crime will be strengthened by a series of interlinked activities in a multi-component integrated project. This will result in better informed policy making, more closely targeted interventions, enhanced operational capacity in front line agencies and services, and a legal framework more closely aligned with international standards. The project will be carried out mainly at federal level, with the possibility of selecting focus states during the inception phase and along the lifespan of the project. Component 1: Information and evidence base, legal reform and drug policy Expected result 1: Information and evidence base on drug use, drug crime and policy impact is improved and used for policy and programming. The Nigerian legal framework is further developed and in line with international standards. A viable and effective coordinated and balanced drug policy and strategy are prepared and their implementation is supported. A data-collection and sharing/reporting information system is in place, including detailed information on particular drug-related issues and organised crime networks in Nigeria and West Africa, where relevant. Mutual legal cooperation in criminal matters at national, regional and international level is enhanced and linkages established with ECOWAS activities. Activities will include:

Activity 1.1: Baseline studies, gap analysis, capacity analysis, preparation of work plans and finalisation of logframe including indicators/targets (inception phase). Activity 1.2: Full-scale surveys on cannabis production and drug use, with counterpart capacity built to conduct similar exercises, analyse the policy implications and translate them into evidence-based strategies. Activity 1.3: Detailed qualitative studies into drug production, trafficking and use, drug related crime, organised crime groups and networks, and the associated threats at national, regional and international levels.

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Activity 1.4: Support the Inter-Ministerial Committee on Drugs on the formulation and implementation of new National Drug Control Master Plan (2012-2015) following an integrated, multi-disciplinary and balanced approach (demand and supply reduction). Activity 1.5: Advising on aligning relevant legislation in Nigeria with treaty requirements, human rights and international best practice, removing contradictions in existing legislation and reviewing the proportionality of penalties. Activity 1.6: Helping to set up regular consultations with policy makers, journalists, health professionals and academic audiences and consistent outreach through multiple media to reach all relevant audiences. Activity 1.7: Support to Nigerian experts to participate in and contribute to national and international conferences, academic journals, study tours, twinnings and training, publications and websites. Component 2: Law Enforcement enhancement Expected result 2: Enhanced technical and operational capacity in front line agencies and services leading to targeted interventions on drugs/organised crime related activities in Nigeria and improving the internal scrutiny processes. Improved capacity of national stakeholders and specially the NDLEA to address and combat effectively drug trafficking and control. Investigation skills are improved and information based activities further developed. The capacity to identify drug related money laundering is improved, as well as the effectiveness of prosecution dealing with drug offences. Activities will include: Activity 2.1: Baseline studies, gap analysis, mapping and specific needs assessments, capacity analysis, preparation of work plans and finalisation of logframe including indicators/targets (inception phase). Activity 2.2: Support to the development and implementation of the institutional strategy for NDLEA, including standard operating procedures (SOPs), case management Activity 2.3: Inter-agency training exercises for relevant law enforcement agencies on investigations, interrogation skills, intelligence analysis and other key skills. Activity 2.4: Advising on and support to cooperation and joint operations between Nigeria, ECOWAS and EU Member States. Activity 2.5: Set up recording, sharing, and analysis of information supported by training, provision of hardware and software, etc. to support regular inter agency information sharing at command level. Activity 2.6: Expert advice and support the cooperation, coordination and exchange of information between NDLEA and NFIU. Activity 2.7: Technical support and advice to improved seaport and airport controls through closer cooperation between relevant law enforcement agencies, including provision of training and equipment. Activity 2.8: Strengthening witness management and witness protection in relevant law enforcement agencies, and support drafting of administrative guidelines for witness protection. Activity 2.9: Advising on legal aid provision and due process for drug arrestees Activity 2.10: Training of community police and communities in dealing with drug-related incidents. Activity 2.11: Review of human rights standards and development of relevant training tools for law enforcement officers. Component 3: Drug prevention, treatment and care Expected result 3: The capacity to manage drug treatment/rehabilitation and prevention is improved through the creation of a reliable network of quality drug treatment service providers available for drug users. Drug treatment professionals are trained (including Ministry of Health and civil society). Credible and adapted drug information is disseminated and quality drug prevention methods are developed and implemented, increasing the information, skills and opportunities of Nigerians to make healthy choices about drugs and drug use.

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Activities will include: Activity 3.1: Baseline studies, gap analysis, mapping and specific needs assessments, capacity analysis, preparation of work plans and finalisation of logframe including indicators/targets (inception phase). Activity 3.2: Expert advice and support to review the cooperation between the NDLEA, the Ministry of Health and other actors on drug prevention, treatment and care. Activity 3.3: Policy advice and support to the preparation of policy guidelines, minimum standards, and training manuals for drug prevention, treatment and care. Activity 3.4: Technical support to the implementation of these policy guidelines, minimum standards, and training manuals for drug prevention, treatment and care. Activity 3.5: Direct support to civil society organisations networks working on drug prevention, treatment and care. Activity 3.6: Provision of equipment for centres and training of drug treatment professionals. Activity 3.7: Support to improve routine data collection and case reporting by statutory and CSO treatment providers of treatment episodes. Activity 3.8: Sensitisation on the nature of drug use, drug dependence and drug prevention, treatment and care for law enforcement agencies. Activity 3.9 Promotion of ‘healthy lifestyles’ in schools, families and communities.

3.3. Risks and assumptions It is assumed that the Government will continue to attach importance to drugs and to organised crime issues both at the political and operational level and that there will be no major instability to disrupt implementation. The main risks are summarised in the table below:

Risks/potential adverse impacts

Level Overview of mitigating measures

Legal reform is hampered by institutional inertia and lack of political will

High Active involvement of national stakeholders in project implementation and monitoring. Dissemination of information to policy makers, media and professionals.

Rivalry and reluctance from Law Enforcement Agencies (LEAs) to share security data and confidential information

High The project will support protocols and MoU’s between LEAs and encourages joint training exercises.

Nigerian Drug Law Enforcement Agency (NDLEA) lacks capacity to implement quality improvement

High/ Medium

Training for operatives and institutional reform will enhance capacity and create an environment conducive to quality improvement

Poor cooperation between government agencies and CSOs mainly on drug demand reduction

High/ Medium

Project management and task coordinators ensure that inter agency partnerships with civil society are woven into the project

Lack of specific technical expertise in Government to carry surveys and research

Low/ Medium

The project will support national stakeholders to improve technical expertise.

3.4. Crosscutting Issues

Drug control is closely related to human rights. A number of activities to safeguard the rights of drug users and of suspects arrested on suspicion of drug offences have been identified. The project supports the alignment of drug control with good governance by promoting due process, the adherence to operational standards, and internal oversight. It also seeks to establish high standards of care for the treatment of drug dependent persons, and to remove the stigmatization of drug users.

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The drug demand reduction strategy has integrated gender and increased its focus on youth. Factors affecting vulnerability of women include dependence or arrest of children or spouses. Early intervention, treatment and prevention are critical for engaging women and youth. Women and youth will be specific targets of the project. The project will also further address HIV/AIDS issues surrounding drug use as part of the sensitization activities.

3.5. Stakeholders The main beneficiary of the project is the NDLEA, an agency that has good management structures, committed to reform and with a professional ethos. NDLEA is expanding in terms of resources (human, economic). The internal management systems are well-structured and the staff commitment is high by Nigerian standards. The NDLEA and other law enforcement agencies work in a challenging environment. Quality improvement of their performance is still needed and there is a strong demand for comprehensive support in this sensitive sector. NDLEA has a basis for improved investigative capacity, along with other law enforcement agencies. International law enforcement partner agencies have established a trust relationship that has allowed them to share intelligence with them. At the operational level, the NDLEA and other law enforcement agencies cooperate on drug control to some degree, but there is no structural information sharing in place. Information is not computerized, is not shared with other commands, and there is no common database. The focus on drug control leaves the drug prevention, treatment and care activities sidelined by the organisation; a review of the cooperation with the Ministry of Health in line with international best practice would be advisable. NDLEA is committed to improvement and has ambition of becoming a leading regional law enforcement agency. Civil Society Organisations (CSOs) can play an important role in drug prevention, treatment and care, and research activities. Meetings are organised on a regular basis but their capacity and their approaches vary significantly. The quality assurance and validation methods of these CSOs remain rudimentary, mainly due to lack of financial resources. This translates into activities that are often erratic, ad hoc and project driven. There is substantial potential for expansion in training and capacity. The final beneficiaries of the project include the Nigerian public who will benefit directly from the public awareness on anti drug sensitization campaigns and indirectly from a safer environment that is less dominated by crime. The national stakeholders have been consulted during the formulation of the project and their contributions have been taken into account in the formulation documents.

4. IMPLEMENTATION ISSUES 4.1. Method of implementation

Direct centralised management will be used for overall project visibility activities and evaluation/audit. These activities will be implemented through service contracts. Joint management through the signature of an agreement with the United Nations Office on Drugs and Crime (UNODC), in accordance with Article 29 of the Regulation (EC) No 215/2008 on the financial regulation applicable to the 10th European Development Fund. This organisation has been selected based on its international mandate, technical expertise and specific experience in Nigeria. The international organisation complies with the criteria provided for in the applicable Financial Regulation. UNODC is covered by the Financial and Administrative Framework Agreement concluded between the European Commission and the United Nations (FAFA). A Contribution Agreement based on the FAFA will be signed with UNODC for the implementation of the project.

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Activities implemented through direct centralised management: All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the Financial Regulation applicable to the 10th European Development Fund. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement. Activities implemented through joint management: All contracts implementing the action are awarded and implemented in accordance with the procedures and standard documents laid down and published by the relevant International Organisation. The contribution agreement with UNODC will be signed immediately after the signature of the Financing Agreement, tentatively in Q1 2012. The service contract for visibility will only be launched after the conclusion of the inception phase of the project, as from the implementation of activities start delivering the outputs of the project.

4.3. Budget and calendar

The indicative breakdown is:

EU contribution

Government contribution

UNODC contribution

Total

Categories

EUR EUR EUR EUR Contribution agreement with UNODC 34 500 000 0 0 34 500 000Communication/Visibility 500 000 0 0 500 000Monitoring and evaluation 500 000 0 0 500 000Contingencies 500 000 0 0 500 000TOTAL 36 000 000 0 0 36 000 000

The NDLEA will provide office facilities and second a team of senior officers and administrative staff to the project to assist in the implementation of part of the activities. The foreseen operational duration is 60 months as from signature of the Financing Agreement.

4.4. Performance monitoring

Technical and financial monitoring will be a continuous process as part of the implementing agency responsibilities. To this aim, the agency (UNODC) shall establish permanent internal monitoring system to the project which will be used to elaborate the progress reports including progress towards target values for key indicators. The logical framework will serve as the basis for measuring progress and final assessments. The performance indicators measuring the implementation of the activities of the project and the performance of the main stakeholders to fulfil their mandates will be further detailed during the inception phase. These indicators will be based on available statistics, supplemented by data generated through the efforts of the project. The implementing agency will conduct baseline studies (target values before/after action), prepare a procurement plan and refine and adjust the indicative logframe during the project inception phase (first six months). Indicators will also be adjusted throughout project duration.

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The Commission may carry out Results Oriented Monitoring via independent consultants, starting from the sixth month of project activities, which will be finalised at the latest six months before the end of the operational implementation phase.

4.5. Evaluation and audit

There will be a mid-term evaluation mission and a final evaluation from the European Commission. For the part of the project implemented through joint management, audit and internal control of management operations will be conducted by the implementing agency (UNODC) in line with the internal and external auditing procedures laid down in their financial regulations, rules and directives. A total amount of EUR 500 000 is earmarked for monitoring and evaluation.

4.6. Communication and visibility

Communication and visibility will include: i) visibility activities to be carried out by the selected implementing agency in line with the Communication and Visibility Manual for European Union External Actions. In this case, the activities implemented by the implementing agency (UNODC) FAFA provisions on visibility will apply; ii) the visibility strategy will also have a separate budget for its implementation through direct centralised management to ensure maximum visibility of the EU intervention. These visibility activities will be contracted through service contracts.

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Annex VII

1. IDENTIFICATION

Title/Number Support to the Nigerian Electoral Cycle 2011-2015 CRIS No NG/FED/2011/22729

Total cost EUR 20 000 000 EU contribution: EUR 20 000 000 Government of Nigeria contribution: in kind


Project approach 1) Joint management with international organisation (UNDP) 2) Direct Centralised Management

DAC-code 15151 Sector Elections

2. RATIONALE

2.1. Sector context The April 2011 elections in Nigeria could mark a turning point in the country's long history of flawed elections, which have fallen short of minimum international standards and are generally marred with irregularities and manipulation. The European Union Election Observation Missions observing 1999, 2003 and 2007 elections have widely outlined the challenges within the Nigerian electoral cycle. The professional capacity of the Independent National Electoral Commission (INEC) at both the national and state levels presents weaknesses and its independence is questioned, whereas stakeholders like the National Assembly, civil society organisations including women groups, political parties, security agencies, the media and the judiciary suffer from a limited capacity to engage in the electoral process in a sustained manner. The electoral reforms implemented so far include a personnel overhaul of INEC along with constitutional and electoral law amendments to increase the prospects of more credible elections for 2011 and beyond. Despite these steps forward, the electoral reform process still has a way to go. Moreover, electoral violence and political conflicts have had adverse implications for democratic stability in Nigeria. The European Union has contributed significantly to the promotion of democratic governance in Nigeria, including assistance to the electoral processes of 1999, 2003 and 2007. Given the tight timeframe within which elections have been prepared, it is in the post-election period that efforts towards longer-term structural reforms and improvements are expected to emerge. The support of the international community is bound to be far more critical during this stage than during the election organisation phase. The proposed action will support the Nigerian electoral cycle 2012-2015 by supporting the electoral reform process and some of the broader capacity building areas which will emanate from the post-election audits, evaluations and reviews. The key beneficiaries include INEC, the Parliament, the judiciary, political parties, civil society organisations (CSOs), media and the security sector. The need to sustain uninterrupted momentum by potentially destabilising changes in donor approach or funding gaps after 2011 provides a justification for the proposed project.

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2.2. Lessons learnt The EU has provided support to the past three electoral processes: 1999 (EUR 1.9 million); 2003 (EUR 6.5 million) and the 2007-2011 electoral cycle (EUR 40 million). Support for both the 2003 electoral process and the 2007-2011 electoral cycle was channelled through UNDP. The project draws on observations and recommendations of previous EU Election Observation Missions (EOMs 2003 and 2007), on the mid-term review of support to the electoral cycle 2006-2011 and on the identification study (carried out in July 2010). Lessons learned from past support include: i) A weak legal, institutional and operational framework for election administration in Nigeria justifying continuous support to stakeholders to actively engage throughout the electoral cycle; ii) The need for a better balanced electoral cycle approach paying adequate attention to all key stakeholders. From a management point of view, past support, along with a preliminary analysis of the Joint Donor Basket Fund (JDBF) implementation modalities and delivery capacity, show some challenges. These include: i) Delays in the appointment of advisors and senior project staff; ii) Challenges with regard to communication flows and inadequate information sharing among partners; iii) Poor visibility of the EU contribution; iv) Lack of a strategic approach and long term vision for programme implementation, and v) Inadequate funding commitment by partners.

The post April 2011 elections period offers a unique opportunity for both national players and development partners to conduct overall reviews and reposition themselves to positively contributing towards shaping the next, crucial, electoral cycle. Some highly relevant exercises are scheduled to take place in the elections aftermath: These include i) INEC's audit of the electoral process, institutional reform and multi-annual strategic plan; ii) a comprehensive JDBF 2 programme review, and iii) European Union EOM 2011 final report and recommendations. The outcome of these exercises will have to be taken into consideration during a six-month inception phase when necessary adjustments can be made to the project. The inception phase will require the recruitment of a democratic governance expert to assist in the preparation of the intervention. The phase will also determine whether the project will be implemented as a standalone project or as an innovative, complementary element to the DGD/JDBF 2. 2.3. Complementary actions The proposed project is fully complementary to the ongoing "Support to Democratic Governance for Development", DGD/JDBF 2 project, tackling both the electoral cycle 2010-2015 and the deepening of democracy in Nigeria. The DGD/JDBF2 project, which involves EU, UNDP, Canadian International Development Agency (CIDA) and UK Department for International Development (DfiD) and is managed by the United Nations Development Programme (UNDP), has six components: support to the National Assembly; strengthening of political parties; improvement to the electoral process; improved capacity and performance of civil society; strengthening of the mass media, empowering of women in the democratic process. The EU contribution to the JDBF2 will expire in December 2011. Electoral assistance to Nigeria is also provided by the USAID/DfID partnership which supports the CEPPS (Consortium for Elections and Political Processes) made up of International Foundation for Electoral Systems (IFES), National Democratic Institute (NDI)

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and International Republican Institute (IRI). The activities of this Consortium are closely coordinated with the DGD project. These activities will run until end of December 2011. 2.4. Donor coordination Donor coordination is crucial in an electoral cycle support context and even more so in the Nigerian elections' aftermath. The past and ongoing projects include mechanisms to ensure donor coordination. The JDFB 2 holds periodic Steering Committee meetings, where strategic guidance is provided, along with Technical Committee meetings which are held more frequently. During the inception phase of this project, the roles of the Steering Committee and the Technical Committee will be better defined and improved. The project will be open to other development partners engaged in electoral assistance. 3. DESCRIPTION

3.1. Objectives The overall objective of the project is to contribute towards consolidation of the democratic process in Nigeria. The specific objective is to strengthen INEC, Civil Society Organisations and other relevant stakeholders through technical assistance, training, capacity building and material support so that they can better fulfil their respective roles throughout the electoral cycle. 3.2. Expected results and main activities Component 1: Support to INEC to enhance the electoral management body's (EMB) capacity for delivering elections Result 1: INEC's capacity to deliver more credible and professional elections is strengthened Result 1.1: Improved INEC strategic capacity Result 1.2: Strengthened INEC technical capacity Result 1.3; Improved INEC professional development Result 1.4: Improved INEC stakeholder engagement strategies Key activities will include: • Technical support to INEC to its post election structural and operational reconfiguration • Technical Assistance/policy advice and equipment to reinforce the technical, managerial

and administrative capacities of INEC (national, state and LGA level) in specific areas18. • Support INEC-Stakeholders collaboration towards improved election administration. • Technical Assistance and training to the INEC Electoral Institute Component 2: Support to electoral legal and institutional reforms Result 2: Improved legal and institutional frameworks for democratic elections. Result 2.1: Strengthened National Assembly Result 2.2: Enhanced catalytic role for key National Assembly (NASS) Committees linked to the electoral reform Result 2.3: Improved frameworks for initiating and processing bills on the electoral process Result 2.4: More democratic political parties Result 2.5: Improved gender mainstreaming Key activities include: • Support the NASS to improve legislative initiatives on electoral reform and accountability. 18 Production and implementation of regulations on electoral matters, continuous voter registration, logistics, strategic

operational planning, communication and information technology (IT).

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• Support relevant Cabinet and inter-ministerial structures on legal reform in order to effectively initiate and articulate electoral reform proposals engaging with the law-making bodies (NASS)

• Facilitate access by CSOs to the formulation of elections legislation/constitutional amendments.

• Technical assistance to political parties in specific areas19 • Training on legislative drafting and facilitating cooperation/linkages with regional and

international parliamentary networks. Component 3: Support to national stakeholders to better engage with the electoral process Results 3: Civil society/media capacity strengthened to engage with the electoral process20 Result 3.1: Improved CSO outreach and impact Result 3.2: Enhanced domestic observation Result 3.3: Improved media capacity Result 3.4: Improved violence monitoring mechanism Result 3.5: Improved gender equality Key activities include: • Facilitating the set up of a permanent and comprehensive CSOs platform both at national

and state level to jointly engage in election related activities. • Capacity development for CSOs including women groups. • Policy advice to facilitate linkages between INEC, National Orientation Agencies and

CSOs on civic and voter education. • Training/twinning with the media on editorial, programming and performance

measurement Component 4: Prevention, reduction, and management of election related violence Result 4: Election related violence is prevented, reduced and managed through support to and in collaboration with CSOs. Result 4.1 Improved conflict tracking by CSOs Result 4.2: Enhanced collaboration on conflict transformation Result 4.3: Better management of election results Result 4.4: More informed security agencies Key activities include: • Support the CSOs platform and the Institute for Peace and Conflict Resolution (IPCR) to

monitor political conflict and violence, manage a system of early warning and advocate for preventive action.

• Support collaboration between INEC, security agencies and CSOs to map out security hotspots and design response mechanisms.

• Technical support to INEC for the timely and transparent transmission of electoral results. • Training of security agencies. • Strengthening of networks of CSOs that bring women together to enable a gender-based

perspective and response to political conflict and violence. • Training for the public adoption of non-violence declaration by all political

parties/candidates

19 Policy based politics, electoral campaigns, internal democracy, and accountability with constituents and equitable

participation. 20 Including effective civic and voter education, information, election monitoring and conflict management.

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• Support comprehensive dialogue for peace including, CSOs, cross and inter-party dialogue Component 5: Support the election related judicial reform Result 5: Court of Appeals and electoral tribunals execute the adjudication process in a timely and cost effective manner prior to elected candidates investiture Result 5.1: Enhanced technical and operational court capacity Result 5.2: Courts including court of appeal have enhanced capacity to speedily and transparently transmit their decisions on court petitions to the public and various stakeholders Result 5.3 Strengthened Alternative Dispute Resolution (ADR) Key activities include: • Policy advice to review the Court of Appeals and election tribunals’ legal frameworks • Assist in the development/implementation of capacity building/training strategy and plan

for the Court of Appeals and election tribunals staff • Support design and implementation of communication and information structures.

3.3. Risks and assumptions The proposed project relies on the following assumptions: i) the elections 2011 are peaceful, credible and accepted by political parties and the population; ii) the new INEC leadership welcomes constructive engagement with donors and provide financial/operational support to INEC to fulfil its duties; iii) INEC legal and operational framework allows financial and administrative autonomy to avoid delays in the disbursement of funds; iii) INEC with its new personnel enjoys a degree of goodwill from stakeholders that engage in the electoral process; iv) other national stakeholders are committed to legal/institutional reform. Risks/potential adverse impacts Level Risk management strategy/measures The delivery/conduct of the 2011 elections indicate a seriously flawed process which reduces trust and confidence in INEC

Medium/High

Undertake comprehensive post election reviews and evaluations involving all stakeholders and identify reform measures and changes to be undertaken by INEC.

The elections produce a lasting contested and/or violent outcome which constraints programme implementation.

Medium/High

Provide monitoring of 'hotspots' as early warning; support conflict tracking, prevention and resolution and undertake high-level political and diplomatic engagements.

National stakeholders conduct themselves in a manner that discredits and undermines public confidence in the electoral process

Medium/High

Mobilize high diplomatic and political engagement strategies, both bilaterally and multilaterally, including the involvement of regional institutions.

The electoral process is flawed consequently leading donors to consider withdrawing support

Medium Ensure that benchmarks are properly articulated and adhered to.

3.4. Crosscutting Issues The project is expected to positively impact on and to support the objectives in the field of good governance and human rights, democracy, gender equality and conflict mitigation and prevention. The project will fully integrate these dimensions and particularly the cross cutting issue of gender equality when planning and implementing the activities. 3.5. Stakeholders The main direct beneficiaries are INEC, the Parliament, the judiciary, political parties, CSOs, media and the security agencies. The final beneficiaries are Nigerian citizens at large who will benefit from improved election processes.

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4. IMPLEMENTATION ISSUES 4.1. Method of implementation A financing agreement will be signed with the National Authorising Officer of Nigeria. Direct centralised management will be used for the overall project visibility, impact, performance tracking, attitude surveys and evaluations. These activities will be implemented through service contracts. Joint management through the signature of a contribution agreement with the United Nations Development Programme (UNDP) for the implementation of the project, in accordance with Article 29 of Regulation (EC) No 215/2008 on the financial regulation applicable to the 10th European Development Fund. The choice is justified on the ground that UNDP has specific technical expertise in this area, has long experience in the country, has built up confidence with national stakeholders (including INEC) and has relatively good programme delivery record (including previous EU-funded electoral support projects) and has UN mandate. 4.2. Procurement and grant award procedures Activities implemented through direct centralised management: All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the Financial Regulation applicable to the 10th European Development Fund. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement. Activities implemented through joint management: All contracts implementing the action are awarded and implemented in accordance with the procedures and standard documents laid down and published by the relevant International Organisation. The contribution agreement with UNDP will be signed immediately after the signature of the Financing Agreement, tentatively in Q4 2011.

4.3. Budget and calendar

The indicative budget breakdown is as follows:

EU contribution

Government contribution

Total Categories

EUR EUR EUR Contribution agreement with UNDP 19 100 000 0 19 100 000Communication/visibility/other 500 000 0 500 000Monitoring and external evaluation 300 000 0 300 000Contingencies 100 000 0 100 000TOTAL 20 000 000 0 20 000 000

The Government of Nigeria will second senior employees and administrative staff to the project to assist in the implementation of part of the activities.

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The foreseen operational duration is 48 months as from signature of the Financing Agreement. 4.4. Performance monitoring The logical framework will serve as the basis for measuring progress not only of the implementation of activities but also of the performance of the sector. Baseline surveys and a complete set of indicators will be fully developed at the inception phase of the project. The UNDP operational structure of the project will monitor implementation through reports and work plans and ensure that potential changes in the project are shared and agreed with stakeholders involved. The Commission may carry out Results Oriented Monitoring via independent consultants, starting from the sixth month of project activities, which will be finalised at the latest 6 months before the end of the operational implementation phase. 4.5. Evaluation and audit The project will be subjected to mid-term and final evaluations by independent experts. The EU and the implementing agency will analyse the conclusions and recommendations of the mid-term review and decide on the follow-up action and the corrective measures (if needed) to be taken in the subsequent period. Audit of the Contribution Agreement shall be undertaken in line with the Financial and Administrative Framework Agreement (FAFA). A total amount of EUR 300 000 is earmarked for monitoring and evaluation. 4.6. Communication and visibility A visibility strategy will be developed and agreed during the project inception phase. Visibility activities will ensure that all stakeholders are aware of the contribution of the EU. The EU will pay particular attention to ensure that the Joint EU-UN Visibility Guidelines are carefully followed. Provision is also made in the budget for the Commission to directly contract visibility activities.

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Annex VIII

1. IDENTIFICATION

Country/Title/ Number

Nigeria - Water Supply and Sanitation Sector Reform Programme Phase II (WSSSRP II).CRIS No NG/FED/022-740

Total cost Total Cost: EUR 94,000,000 EDF contribution: EUR 80,000,000 UNICEF: EUR 1,000,000 (joint co-financing) Contributions from State and Local Governments and benefitting communities: EUR 13,000,000


Project approach

Partially Decentralised management and Joint management

DAC-code 140

Sector Water supply and Sanitation

2. RATIONALE Access to safe water and sanitation in Nigeria is low: 58% for safe water supply and 32% for sanitation. This lack of access is the direct cause of 25% of the mortality rate due to diarrheal diseases reported in Nigeria. The Nigerian water sector has two major problems, namely: i) inadequate sector policy and institutional framework; and ii) weak institutions. Agencies that are supposed to provide these services can not deliver them effectively to the population. The proposed project is designed to address the problems at both federal level and in the current EU focal states21. 2.1. Sector context At federal level, the legal framework for the water sector is inadequate. The existing 1993 Water Act (Decree 101) is deficient and is not implementable. This was addressed by the 9th EDF Water Supply and Sanitation Sector Reform Programme (WSSSRP), which supported the Federal Ministry of Water Resources (FMWR) in developing a draft National Water Resources Bill (2009)22, which streamlines the sector institutions and management of water resources at the lowest possible geographic level to accelerate sustainable water and sanitation services delivery. The National Water Resources Policy (2009), produced under the 9th EDF WSSSRP, was the basis for the preparation of Water and Sanitation policies in the States, which are now being enacted into water laws, a process that will be supported by the proposed project.. WSSSRP II will also support the creation of the enabling environment, including the sector regulatory framework, for possible private sector participation (PSP) in water and sanitation services delivery in urban and small towns23

21 Anambra, Cross Rver, Jigawa, Kano,Osun and Yobe 22 The National Water Resources Bill is yet to be passed into law by the National legislature 23 Small towns are settlements with population between 5,000 and 20,000 people. Sometimes the population may be up to 50,000

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2.2. Lessons learnt The 9th EDF WSSSRP was able to establish the concept of "water and sanitation sector" in the EU focal states. A key lesson learnt is that the role of the federal government should be limited to regulation and coordination while services delivery responsibility should be assigned fully to the States and Local Government Areas (LGAs). The five years of WSSSRP were not enough to institutionalise sector reforms and a successor programme is essential to secure reform gains. EDF resources should support activities identified with the active participation of stakeholders. Works contracts should be aggregated to take advantage of economy of scale and to attract more established contractors. The sector will benefit from the involvement of UNICEF in the proposed project given its successful proven experience in the rural water and sanitation sector in Nigeria. 2.3. Complementary actions WSSSRP II will work closely with other EDF and other donors' programmes in the sector, especially with the 10th EDF Support to State and Local governance reform programme . In Kano State, the UK Department for International Development (DfID) is supporting a governance project preparing a water sector Medium Term Sector Strategy (MTSS). This intervention builds on the achievements of WSSSRP. UNICEF is intervening in the rural water and sanitation in three LGAs in Jigawa State with funding from DfID. The African Development Bank is supporting provision of safe drinking water supply and sanitation to rural communities in Osun and Yobe State. The Debt Relief Office, is managing debt relief gains in Nigeria, and transfers conditional grants to the States for poverty-reduction related projects. WSSSRP II will integrate project activities with those of the Debt Relief Office in the focal States. The World Bank is supporting private-public partnerships in the urban water supply in Cross River State. The French Development Agency (AFD, in partnership with the World Bank, is providing support to the urban water sector in Cross River, Enugu, Kaduna, Lagos and Ogun States. 2.4. Donor coordination Donors in the water sector meet regularly in order to coordinate their response to sector policies at federal and State levels. The Federal Ministry of Water Resources (FMWR) has recently taken the lead of the process. Cross River, Osun and Yobe States organise regular coordination meetings with donors. 3. DESCRIPTION 3.1. Objectives The overall objective of WSSSRP II is to contribute to poverty reduction, sustainable development and to the achievement of the water-related Millennium Development Goals 1, 4 and 7c (MDGs24) through improved governance in the water and sanitation sector. The specific objective is to increase access to safe, adequate, and sustainable water, sanitation and hygiene services delivery in the EU focal states. The project objectives are: 1. To improve water policy and the institutional framework25 at federal level 2. To improve water policy and the institutional framework in the EU focal states 3. To support urban and small towns water institutions in the EU focal states to deliver

sustainable water supply and sanitation services

24 MDG 1: Eradicate extreme poverty and hunger, 4: reduce child mortality and 7c: Reduce by half the

proportion of people without access to safe drinking water and basic sanitation 25 Policy and institutional framework comprises: water sector policy; water strategy, water law and regulations.

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4. To support rural water supply and sanitation institutions in the EU focal states to deliver sustainable water supply, sanitation and hygiene services.

3.2. Expected results and main activities For objective 1, at federal level, three results are expected: (i) National Water Resources Bill is enacted and implemented; (ii) Water resources are managed in accordance with integrated water resources management principles; and (iii) A national monitoring and evaluation framework is established in the FMWR. The main activities will include: (i) organise consultation (within and outside the FMWR) to harmonise the draft National Water Resources Bill with other Agency Bills in the Ministry prior to its transmission to the national legislature (ii) implement capacity building actions on integrated water resources management (IWRM) principles and support the preparation of an action plan to roll out IWRM in the FMWR; and (iii) support the creation of a national water and sanitation monitoring and evaluation framework which will be integrated with the states' system. For Objective 2 water governance (policy/regulatory framework) at state level., six results are expected: (i) State water law is enacted and implemented; (ii) Sector institutions are structured in accordance with the state water law; (iii) Budget for sector institutions to fulfil their mandate is secured; (iv) States adopt IWRM principles in water resources management; (v) Strategy for private sector participation in the water supply and sanitation services delivery is developed and implemented; and (vi) Regular sector monitoring and review is institutionalised. For Objective 3, to support urban and small towns water institutions in the focal states to deliver sustainable water supply service, four results are expected: (i) Management and Financial viability of Urban Water Institutions is improved; (ii) Urban Water Works are rehabilitated and improved; (iii) Existing but non-functional water supply schemes in small towns rehabilitated and new water supply schemes constructed; (iv) Strategy for community-management of water supply facilities in small towns is developed and implemented. To achieve the aforementioned results in the states, the activities envisaged include: (i) legal advice to the State Ministries of Justice to facilitate the completion of the water bills; (ii) implement capacity building actions for stakeholders to implement the water law and adopt IWRM principles; (iii) support to the preparation of strategic plans with the objective to draw up a medium-term expenditure framework; (iv) support to strengthen their internal organisational structure of an urban water agency for enhanced service delivery; and (v) implement baseline surveys to collect data on status of access to water supply service prior to project implementation; and (vi) implement water supply works contracts, including supervision. For Objective 4, which will be implemented in the rural communities by UNICEF, there are four expected Results: (i) LGAs' WASH Units26 are upgraded as Departments and strengthened to effectively implement rural water supply and sanitation programmes; (ii) Access to safe drinking water supply service in rural communities is increased; (iii) Access to improved sanitation and hygiene promotion services in small towns and rural communities is increased; (iv) A state monitoring and evaluation (M&E) framework, connected to the national M&E system, is established. The main activities foreseen will include: (i) support for advocacy with policy makers on benefits to upgrade LGA WASH

26 Water, Sanitation and Hygiene Units in the Local Government Area (LGA) are responsible for implementing rural water supply in rural communities. These units are often poorly staffed and funded. Upgrading these Units to Departments will improve their staffing and funding situation.

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Units to Departments; (ii) support to the implementation of baseline studies to collect data on status of access to water supply and sanitation services, and health situation prior to project implementation, and to identify needs in the communities; (iii) support to procurement of water works contracts and supervision; (iv) facilitate Community-led Total Sanitation (CLTS) in communities (including school sanitation and hygiene promotion); and (v) support to the preparation of action plan for activities and investment taking into consideration the requirement to integrate state monitoring and evaluation (M&E) system with that in the FMWR. 3.3. Risks and assumptions

Assumptions The political will to implement the project as designed remains at all levels All stakeholders remain committed to the project Risks Level Risk Management measures Change in political engagement and priorities following the April 2011 elections. (Two out of the six Governors were changed in Kano and Osun States after the 2011 gubernatorial elections).

Low The project will support advocacy to State Governors to prioritise water and sanitation sector in the states. WSSSRP II will limit activities in the states, and finally withdraw from states that have not placed water and sanitation as a priority.

Lack of interest by states due to relatively low content of urban water works contracts intended for the project.

Medium Intensify advocacy on the necessity to consolidate governance reform component as a fundamental requisite for sustainable water and sanitation services delivery.

Conflicting interests between the States and the Federal level each wanting to keep responsibility for direct implementation of water works.

Low The States have responsibility for direct implementation of infrastructure since the Federal Ministry of Water Resources is not co-funding the works contracts under the project.

Results of an ongoing Public Finance Management Assessment in the focal states may judge some states as poorly reforming states.

Medium Poorly reforming states will be given one year to improve. The project will withdraw from any state that does not improve. However, more funds will be allocated to better performing states.

3.4. Crosscutting Issues Women and children suffer most from the consequences of a lack of safe drinking water and adequate sanitation. WSSSRP II will address gender issues, especially as it concerns the active participation of women and youth in its implementation. Women and the young people are to be included and trained as members of the community water committees. WSSSRP II will construct water and sanitation facilities in schools to serve school children. Designs of water and sanitation facilities will take into consideration use by vulnerable groups – the blind and other handicapped persons. Only small groundwater-based water schemes will be constructed under the project, which has little effect on aquifer depletion. By promoting the adoption of IWRM principles in the Nigerian water resources management, WSSSRP II will address issues concerned with adaptation and mitigation of adverse effects associated with climate change.

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3.5 Stakeholders The National Planning Commission (NPC) will supervise and coordinate as its chair the Project Steering Committee. The Federal Ministry of Water Resources (FMWR) will implement and be a direct beneficiary. In the States, direct beneficiaries include the State ministries of water resources; state urban/small towns water boards or corporation, the rural water supply and sanitation agencies, LGAs Water, Sanitation and Hygiene (WASH) Units, non governmental organisations (NGOs) and the private sector. In the beneficiary communities, the Water Consumers Associations (WCAs) and Water, Sanitation and Hygiene Committees (WASHCOMs) will benefit from capacity development activities of WSSSRP II. The target groups are the water ministries and sector institutions at federal and state levels. Over 2 million inhabitants of the six focal states will benefit directly from water supply and sanitation facilities to be constructed under the project as well as from capacity building activities. Indirect beneficiaries are the whole population of Nigeria, especially in the EU focal states. 4. IMPLEMENTATION ISSUES 4.1. Method of implementation The project will be implemented by partially decentralised management and joint management through the signature of a Financing Agreement with the Government of Nigeria, in accordance with Articles 21 to 24 of the Financial Regulation of the 10th EDF. (a) Partially Decentralised Management for Federal and State Components for urban and

small towns (Project Objectives 1, 2 and 3). Specific Commitments i) A service contract will be awarded in accordance with the contract procedures for EU

external actions. The Technical Assistance Team (TAT) mobilised under the service contract will assist the National Authorising Officer (NAO) implement the technical component of the project in the Federal Ministry of Water Resources and in the six EU focal states.

The call for tender for the Technical Assistance will be launched with a suspension

clause in order to limit the hiatus between the end of the current WSSSRP and commencement of WSSSRP II.

The Technical Assistance Team, embedded within the Project Implementing

Agencies, will assist the agencies in the planning, implementation and monitoring of the project activities related to the Project Objectives 1, 2 and 3.

ii) A Supply contract will be awarded in accordance with the contract procedures for EU

external actions. The supplies will be for the provision of Information and Communication Technology (software and hardware), office and hydrological equipment.

iii) Works contracts for the construction and rehabilitation/expansion of water supply facilities in urban and small towns in the six states.

Direct Decentralised Operations (Programme Estimates) The management and implementation of operational costs for civil servants involved in the implementation of the project will be carried out through programme estimates. The programme estimates will be managed by the NAO. The costs will include per diems for

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missions outside the normal place of duty, travels (international and local travels) and salary "top-up" for civil servants directly involved in the implementation of the WSSSRP II. The Commission controls ex ante all the procurement procedures except in cases where programme estimates are applied, under which the Commission applies ex ante control for procurement contracts > 50,000 EUR and may apply ex post for procurement contracts ≤ EUR 50,000. The Commission controls ex ante the contracting procedures for all grant contracts.




< EUR 300,000 < EUR 150,000 < EUR 200,000 ≤ EUR 100,000

The change of management mode constitutes a substantial change except where the Commission "re-centralises" or reduces the level of tasks previously delegated to the beneficiary country, international organisation or delegatee body under, respectively, decentralised, joint or indirect centralised management. (b) Joint Management with UNICEF (Rural Component, Project Objective 4) The rural component of the WSSSRP II will be implemented by Joint management, through the signature of a Contribution Agreement with UNICEF, in accordance with Article 29 of Regulation (EC) N° 215/2008 on the Financial Regulation applicable to the 10th EDF. UNICEF complies with the criteria provided for in the applicable Financial Regulation and with the Financial and Administrative Framework Agreement (FAFA) between the Commission and the United Nations. The contractual model that will be used will be a standard contribution agreement. UNICEF will implement the rural component of WSSSRP II (Project Objective 4) in the Local Government Areas and in rural communities. UNICEF undertakes a similar role under the 9th EDF WSSSRP and its performance has been judged satisfactory by a recent assessment of UN organisations in Nigeria27. UNICEF has an extensive presence in Nigeria and is implementing similar projects country-wide with a number of other donors. The NAO will conclude all contracts, except the contribution agreement with UNICEF, which will be concluded by the EU Delegation. The mid-term, interim and final evaluations will be implemented by the EU Delegation under direct centralised management.

27 IBF International Consulting (2009. assessment of UN Organisations in selected countries. Final report)

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4.2. Procurement and grant award procedures a) 1) Contracts All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the EDF. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to conditions provided for in Article 20 of Annex IV of the revisedCotonou Agreement. 2) Specific rules for grants

The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EU external actions. They are established in accordance with the principles set out in Title VII 'Grants' of the Financial Regulation applicable to the 10th European Development Fund. When derogations to these principles are applied, they shall be justified, in particular in the following cases:

– Financing in full (derogation to the principle of co-financing): the maximum possible rate of co-financing for grants is 80% of the total accepted costs of the Action, if full financing provide the justifications for it. Full financing may only be applied in the cases provided for in Article 109 of the Council Regulation on the Financial Regulation applicable to the 10th European Development Fund.


3) Specific rules on programme estimates All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimates in question (i. e. the Practical Guide to procedures for programme estimates). The EDF financial contribution covers the ordinary operating costs deriving from the programme-estimates. b) All contracts implementing the actions of "Rural component – objective 4" in joint management are awarded and implemented in accordance with the procedures and standard documents laid down and published by UNICEF.

4.3. Budget and calendar The total project cost is estimated at EUR 94,000,000, of which EUR 80,000,000 shall be financed from the 10th CSP/NIP for Nigeria in the framework of the revised ACP-EU Partnership Agreement, EUR 13,000,000 as local contribution and EUR 1,000,000 co-financing by UNICEF under the contribution agreement.

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Categories EU

contribution(EUR)

Local contribution28

(EUR)

UNICEF

(EUR)

Total

(EUR) Decentralised Management 47,250,000 9,000,000 0 56,250,000TAT Service contract 20,450,000 20,450,000Operational Cost (Programme Estimates) 3,200,000 3,200,000Supplies 1,100,000 1,100,000Works 22,500,000 9,000,000 31,500,000CA with UNICEF 30,000,000 4,000,000 1,000,000 35,000,000Communication/Visibility 200,000 200,000Monitoring, External Evaluation and Audit 450,000 450,000

Contingencies * 2,100,000 2,100,000

TOTAL 80,000,000 13,000,000 1,000,000 94,000,000 * The European Union's contribution to the "Contingencies" heading may be used only with prior agreement of the Commission. The operational duration will be 60 months as from the signature of Financing Agreement. 4.4. Performance monitoring The logical framework will serve as the basis for measuring progress and final assessments. The performance indicators measuring the implementation of the activities and the performance of the stakeholders to fulfil their mandates will be prepared in the initial phase. These indicators will be based on available statistics, supplemented by data generated through the efforts of the project. The TAT, in conjunction with UNICEF, will conduct baseline studies during the initial phase to refine and adjust the indicative logframe. Indicators will also be adjusted throughout project duration. 4.5. Evaluation and audit EUR 350,000 is provided in the budget to implement external evaluations by the Commission through independent consultants. A mid-term evaluation mission plus one interim review mission are foreseen before the final evaluation, at the beginning of the closing phase. The Commission shall appoint, in accordance with EU procurement rules, an external auditor to monitor the project's expenditure and auditing on a twelve month basis the project's accounts. The provisions of the Annex to the Financial and Administrative Framework Agreement between the European Commission and the United Nations (2003) on financial control will apply under the Joint management with UNICEF. 4.6. Communication and visibility The overall objective is to ensure the visibility of the EU in all project activities under the WSSSRP II. A visibility plan will be prepared by the TAT and UNICEF to ensure maximum visibility for the EU in line with the Communication and Visibility Manual for European Union External Actions.

28 Contribution by State, Local Governments and beneficiaries for cost of water supply and sanitation works contracts. Local contribution will not form part of the contribution agreement.

annex i 1. identification - european...

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