Federal Republic of Nigeria - Extract of Agreement at completion point
Country Programme evaluation
In 2007/2008, the Office of Evaluation (OE) of the International Fund for Agricultural Development (IFAD) conducted a country programme evaluation (CPE) in Nigeria. The main objectives of the CPE were to: (i) assess the performance and impact of IFAD's strategy and operations in the country; and (ii) develop a series of findings and recommendations that will serve as building blocks for the preparation of the new results-based country strategy and opportunities programme (COSOP) for Nigeria. The COSOP will be formulated by the West and Central Africa Division (PA) of IFAD and the Federal Government of Nigeria.
This Agreement at Completion Point (ACP) presents the key findings and recommendations contained in the CPE. It also benefits from the main discussion points that emerged at the CPE National Roundtable Workshop (NRTW), organized in Abuja on 27-28 November 2008. The ACP captures the understanding between IFAD management, represented by the Programme Management Department, and Government of Nigeria, represented by the Federal Ministry of Agriculture and Water Resources (FMAWR) on the core CPE findings and on their commitment to adopt and implement the evaluation recommendations contained herein within specified timeframe.
Development setting. The pro-poor development environment in Nigeria is unusual in that its vast oil and gas exports provide the country with high volumes of hard currency earnings, adequate financial resources to promote economic and social welfare and reduce rural poverty. Despite its relatively high income, Nigeria has not yet managed to resolve its income disparity and rural poverty problems. The per capita gross national income was around US$620, based on 2005 data (World Bank, 2008). The poverty challenge is illustrated by the fact that Nigeria accounts for around 25 per cent of the rural poor in sub-Saharan Africa, and still has 64 per cent of the population living below the poverty line in 2006, with around 80 per cent incidence among woman-headed households.
During the period under review, and in 2007, only about four per cent of the federal public expenditure was allocated to agriculture. In 2008, the present Government raised this figure to seven per cent with plans to increase it to more than the ten per cent target agreed at the Conference of the Ministers of Agriculture of the African Union in Maputo in 2003. Overseas development assistance to Nigeria is extremely limited comprising only 0.5 per cent of GDP and the IFAD contribution is minimal compared to total Government revenues or the contributions of donors such as the European Union and the World Bank.
Agriculture and rural development are crucial to the Nigerian economy. Around 45 per cent of GDP is generated from agriculture and almost 70 per cent of the poor live in rural areas and derive their livelihoods primarily from small-scale agriculture and rural activities. Small farmers account for 90 per cent of national food production. Limited accessibility to inputs, equipment, new technology, and markets has kept agricultural productivity low. Small farmers are also more acutely affected by climate change and commodity price volatility.
Government is committed to the sector as indicated in the National Economic Empowerment and Development Strategy, the National Policy on Integrated Rural Development and the New Agricultural Policy Thrust. IFAD is considered by the Government as an important development partner because of: (i) its focus on agriculture and rural development for rural poverty reduction; (ii) its flexibility as a development organization and the quality of its interventions; and (iii) its experience in participatory approaches and in promoting innovative solutions to rural poverty reduction that can be replicated and scaled up by the Government, donors, the private sector and others. Also, according to the IFAD Performance Based Allocation System, Nigeria is entitled to over 40 per cent of the Fund's overall financial allocations to the West and Central Africa Region.
Performance and impact of IFAD's strategy and operations
IFAD country strategy issues. The CPE found the analysis of opportunities and constraints in the agriculture and rural sectors, as well as of rural poverty in the 2001 COSOP, to be limited in depth. However, the COSOP provided a useful framework for cooperation with the country. Its attention to policy and advocacy in agriculture and rural development, to promoting effective rural institutions and to productivity and natural resources management were, and remain, relevant and important in the aid architecture of today.
The vast geographic coverage of IFAD's activities, with near national coverage of some operations also raises concerns related, inter alia, to synergies within and across projects as well as to the sustainability of benefits. Nevertheless, the approach and content of IFAD supported community driven development (CDD) concept projects have lent themselves to rapid and sound expansion and replication at National, State and Local Government Area (LGA) levels, with broad support by Government and donors and considered as best practice for local development. However, insufficient attention was devoted to smallholder agriculture activities and the limited positioning of CDD within the broader local governance framework, where linkages to the private sector, such as rural banks, could have provided credit for enterprises and income-generating activities. With regard to the latter, for example, a wide geographic spread of activities would cause greater challenges to the Government in providing the technical assistance and follow–up needed by the rural poor after project completion.
IFAD operational issues
- Centrality of agriculture. Despite its modest financial contribution, IFAD has a distinct and catalytic role in improving the livelihoods of small farmers, including women, artisanal fisher folk, pastoralists and other disadvantaged communities. However, recent operations financed by IFAD have not devoted adequate levels of attention to agricultural activities.
- Local governance. IFAD interventions have contributed to a change in mind-sets in the LGAs and community leaders, who have adopted a more inclusive approach to decision making and resource allocation for rural poverty reduction activities. Positive results are visible especially under the CDD approach. These include: (i) pioneering of participatory processes, beneficiary empowerment and fostering of group and community cohesion and self-reliance for development; (ii) involvement of LGAs in development planning and execution, leading to better local governance; and (iii) contribution to construction, cost-effective completion, timely achievement and organization for operations and maintenance and management of social infrastructure.
- Institutional framework and partnership. The CPE underlines three specific issues related to institutional arrangements and partnerships for project planning and implementation. Firstly, the recent development of operations outside the purely agricultural sector has created new challenges and very strong reservations by the Federal Ministry of Agriculture and Water Resources in terms of institutional roles and responsibilities among federal agencies, for project implementation. Secondly, while the CPE recognizes the importance of working with Federal and State Governments, it finds the various administrative layers introduce complexity in operations, for example, in terms of delays and denials in funds flows, arising from difficulties in securing counterpart funding, as well as implementation, coordination, monitoring and communication. Thirdly, there has been only limited cofinancing of IFAD interventions, so that opportunities for replication, up-scaling and joint pro-poor policy dialogue have not been maximized.
- Promotion of pro-poor replicable innovations. IFAD has been successful in promoting pro-poor innovations in its operations in Nigeria. However, a more systematic and organized effort by IFAD might have ensured even wider replication and scaling up and insufficient human and financial resources, and time, were devoted for IFAD's engagement in policy dialogue, knowledge management and the fostering of strategic partnerships with key players in agriculture activities. Although the grant-funded support to the International Institute of Tropical Agriculture to develop new cassava varieties, and the promotion of community-driven development in projects in the Katsina and Sokoto States and other community-based programmes are examples of successful innovations that have been replicated and scaled up by local governments and others. IFAD's performance in non-lending activities was only moderately satisfactory. Also, the CPE found that insufficient synergies were developed between IFAD grant-funded and loan-funded activities, thus limiting the benefits of grant-funded initiatives. Grants have been used, inter-alia, for developing and piloting new technologies, which have not always found their way into wider loan-funded activities.
- IFAD country presence. Operational activities and participation in in-country meetings and working groups' activities have improved with the recent establishment of the country presence office (CPO). The CPE acknowledges that the sound move towards direct supervision and implementation support in recent operations should further contribute to better development effectiveness on the ground. As such, the evaluation commends IFAD for strengthening its presence by establishing an office in such a large and important country as Nigeria. However, its view is that the current human resources arrangements, level of delegation of authority and resources deployed for the country presence should be of a calibre that would allow it to play a greater role in improving IFAD's assistance to Nigeria.
Recommendation 1: Renewal of focus on small-scale agriculture for poverty alleviation
The evaluation recommends that the future IFAD strategy and activities in Nigeria should pay critical attention to addressing the main challenges related to the low productivity of smallholder farmers. This would serve as the main vehicle for improving small farmer competitiveness, including enhancing their incomes and promoting better livelihoods. The heterogeneity of small farmers would require different approaches that cater to the needs of both subsistence and market-oriented individuals and groups. The prime importance of a value chain-based and commercialized approach to enhancing small farm livelihoods is acknowledged.
As such, particular attention should be given to ensuring more systematic access to markets by adopting a value-chain approach, as well as linkages with the private sector, for example, for the provision of sustainable rural financial services and agro-processing. It is also recognized that, where required, rural finance and micro-enterprise development, adaptive research and extension, environmental management, and improvement of livestock production and marketing are key elements of small farm development.
In addition, it is recommended that the renewed focus should be accompanied by a reduced geographic coverage of IFAD-supported operations, including those that have a national coverage as well as those that take an area-based development approach. This would, inter-alia, contribute to better development effectiveness in general, and at the same time facilitate supervision and implementation support, the promotion of innovations, monitoring, evaluation and co-ordination, as well as ensure wider synergies within and across projects. The criteria for selection from the reduced areas to target in the future will be further discussed during the formulation of the next Nigeria COSOP.
For instance, the levels of rural poverty and gender inequality are examples of two important criteria for choosing the intensity of support to States and LGAs upon which to focus.
Recommendation 2: Adaptation of the institutional framework and partnerships
The CPE also recommends that the current operational arrangements whereby the roles and responsibilities of the Federal Government and State and Local Governments are adequately stratified be further deepened to emphasize intensity of action at the local levels. Lending to State Governments under the Subsidiary Loan Agreements with the Federal Ministry of Finance is an effective way of increasing ownership and giving greater direct responsibility to facilitate the flow of funds and allocation of counterpart financing by the States authorities. Also, allocation of grant resources to national agricultural research institutions will contribute to development of appropriate technologies and identify innovative approaches to sustainable agricultural development.
The CPE recommends that IFAD needs to ensure that the federal partner agencies selected have the required skills, experience and competencies to ensure effective implementation and support to IFAD-financed activities. In this regard, it was recommended to expeditiously develop a mutually satisfactory understanding on pending institutional issues, in terms of coordination, division of labour and implementation, especially as they relate to RUMEDP, which has not yet been negotiated. In the absence of such an understanding, IFAD management may consider a cancellation of the corresponding loan in the near future, thereby allowing IFAD to devote its limited resources to other pressing country strategy, programme development and implementation issues.
Recommendation 3: Promoting pro-poor innovative solutions
The total volume of official development assistance (ODA) to Nigeria is minimal and the IFAD financial contribution is a very small proportion of total ODA.
Therefore, the CPE recommends that IFAD should focus its future country strategy and programme on promoting pro-poor innovative solutions to rural poverty, which can be replicated and scaled up by the Government, donors, private sector and others. It is proposed that a more systematic approach be taken to finding and piloting innovations, and greater attention be paid to policy dialogue, knowledge management and development of strategic partnerships, which are important factors in replication and scaling up of successful innovations.
Similarly, proactive efforts are required to link grants to loan-funded investment projects. Grants may be used for testing innovative solutions, which can then be applied more broadly through loans.
Among other areas, innovations should be centred on the objective of improving smallholder farmer productivity, taking account of the challenges currently facing farmers, including those of rising commodity prices. This should also include due consideration of adaptive research oriented to the needs of small farmers. Likewise, innovative solutions that would assist farmers to limit the effects of climate change should be explored. The CPE advocates that more attention be given to private/public sector partnerships, donor coordination and policy dialogue. The Federal Government of Nigeria has developed a National Food Security Programme with emphasis on commercial agriculture, food security and sustainable land management, amongst others. In this regard, IFAD will consider to partner on all aspects consistent with its mandate.
Recommendation 4: Strengthening local governance
The CPE recommends that more attention be devoted to positioning CDD within the broader local governance framework, strengthening the capability of all actors at the local level such as States and LGAs, elected local bodies, the private sector, local NGOs, and CBOs. In particular, at the State and LGA level, there is a need to reinforce grass roots and local government capabilities in development planning, delivery and improvement of service provision.
Empowerment and consolidation for progressive devolution of governance to the local level should be supported through policy dialogue and improved knowledge management. The CDD approach should in fact be adopted even more widely as an instrument for participatory agriculture and rural development activities in Nigeria.
The development of robust farmer associations as part of a stronger local governance framework that can lead to better empowerment of the poor would be another area of innovation for IFAD and Government to pursue in the future.
In this regard, IFAD's positive experience of promoting farmer associations in both Western and Central Africa and in other regions might prove valuable. IFAD can play a role in supporting the broader participation of all tiers of government and research institutions and grass roots organizations in development, principally through sensitization, capability building, counselling and mentoring.
Recommendation 5: Adaptation of the IFAD operating model
Nigeria is a large country of strategic importance to IFAD. Given the vast number of rural poor, the increasing financial allocations under the performance-based allocation system (PBAS) and the proposed re-emphasis on promotion of replicable innovations, it was recommended that IFAD should seek ways and means of strengthening its country presence, for example in terms of human and financial resources, infrastructure, roles and responsibility.
In this regard, the option of out-posting the country programme manager (CPM) should be explored. Such an IFAD country presence could eventually have a sub-regional dimension, which would entail the CPM covering and based in Nigeria also assuming responsibilities for IFAD operations in selected neighbouring countries. A stronger country presence would allow IFAD to be more fully engaged in policy dialogue, further its commitment to meeting the provisions of the Paris Declaration on Aid Effectiveness, improve its knowledge management, and ensure even better implementation support.
The introduction of the PBAS has important implications for the projects funded by IFAD in Nigeria. Increasing the total volume of resources allocated to the country under the PBAS calls for serious thought as to the number of projects to be developed and the corresponding volumes of loans. Given the current levels of IFAD human resources allocated to Nigeria, it was suggested that financing fewer projects with larger loan amounts would appear to be the most plausible option.
Proposed Timeframe to implement the recommendations
All of these recommendations will be taken into account in formulating the new results-based COSOP, which is expected to be finalized and discussed by the IFAD Executive Board before the end of 2009.
Key partners to be involved
The West and Central Africa Division will be the main IFAD Division responsible for ensuring the implementation of the recommendations in this Agreement at Completion Point. In fact, within the framework of the IFAD President's Report on the Implementation Status and Management Actions, prepared annually and submitted to the Board for consideration, the PA Division will provide an account of how the recommendations were incorporated in the new Nigeria COSOP. The main partner in the Government of Nigeria responsible for ensuring the implementation of the recommendations will be the Federal Ministry of Agriculture and Water Resources.