Section I – Basic Information
Date ISDS Updated: November 8, 2004 Report No.:AC825
A. Basic Project Data
A.1. Project Statistics
Country: Nigeria / Project ID: P088150
Project: Federal Government Economic Reform and Governance Project / TTL: Victoria Kwakwa
Total project cost (by component): US$ 179.69 million
- Public Resource Management and Anti-Corruption Initiatives: US$74.2 million
- Civil Service Administrative Reform: $71.86 million
- Strengthening Civil Service Pensions Management and Accountability: US$6.69 million
- Strengthening Quality and Availability of National Statistics: US$20 million
- Project Coordination and Portfolio Monitoring: US$3.31 million
- Unallocated/Contingencies: US$3.14 million
- PPF Refinancing: US$0.5 million
Appraisal Date: October 18-29, 2004 / Credit amount($m):
IDA: US$140 million equivalent
Board Date: December 14, 2004
Other financing amounts by source:
-UK: Department For International Dev. (DFID)
-Federal Government of Nigeria / US$22 million
US$17.69million
- UK: British Department For International Development (DFID) / US$15 million
Managing Unit: AFTP3 / Sector: Central government administration (100%)
Lending Instruments: Technical Assistance Loan
Is this project processed under OP 8.50 (Emergency recovery? / Yes? / [ ] / No? / [x ]
Environmental Category: C / Safeguard Classification: None
A.2. Project Objectives:
In line with the federal government’s goal to significantly strengthen governance and accountability, reduce corruption and enable it deliver services more effectively, the objectives of this project are two fold: (i) to improve the federal government’s economic and financial management systems and processes; and (ii) to firmly establish a reform process of the federal civil service to improve professionalism and the government’s ability to deliver services. Progress towards the achievement of these objectives will be measured by: (a) adoption of more transparent and modern economic and financial management systems and processes that are less prone to corruption; and (b) implementation of restructuring plans in pilot Ministries, Departments and Agencies (MDAs) and initiation of reforms in other MDAs.
A.3. The project has four broad areas of support: (i) public resource management and targeted anti-corruption initiatives; (ii) civil service reforms system wide and in five pilot ministries/agencies; (iii) implementation of pensions reforms; and (iv) strengthening of statistics and statistical capacity; Activities in these four areas will build a broad framework to help achieve both some immediate gains in the quest for good governance and the fight against corruption as well as significant reduction in corruption over time through system-wide structural changes. It will put the Federal Government’s finances on a path of fiscal sustainability and enhance efficiency in use of government resources. An unallocated amount is also provided.
Public Resource Management and Targeted Anti-Corruption Initiatives
This component will support reforms of the financial management and procurement policies and processes in parallel with institutional strengthening of the key public resource management and procurement agencies. On the revenue side it will support the Federal Inland Revenue Service (FIRS) and the Nigeria Customs (NCS) in further defining certain aspects of their administrative reforms and capacity building. The component will: (i) ) modernize financial management and accountability arrangements; (ii) streamline and modernize public sector procurement procedures; (iii) address inefficiency weak capacity and corruption in domestic revenue collection. The Federal Government is already strengthening fiscal policy including through implementation of an oil price based fiscal rule. It has also initiated development of a Medium Term Expenditure Framework (MTEF). Separately, activities are underway, funded by USAID and by the Government’s own resources, to strengthen the capacity of the budget office. Both sets of activities will complement each other in strengthening overall public resource management. The component will also include support for the targeted anti-corruption efforts of the Economic and Financial Crimes Commission (EFCC).
Activities to improve Government Financial Management System include:
· Progressively introducing a Government Integrated Financial Management Information System (GIFMIS). This will include strengthening the OAGF’s IT capacity, acquisition and deployment of integrated PFM software, and development and implementation of additional ICT infrastructure (WAN to link OAGF HQ and line ministries/agencies/ federal pay offices);
· Improved cash management by strengthening the institutional framework and capacity for cash management and through utilization of the GIFMIS cash planning system;
· Improved financial reporting through: (a) adoption of the cash model of International Public Sector Accounting Standards (IPSASs); and (b) design and implementation of departmental financial performance reporting systems;
· Review and modernization of internal audit arrangements; and
· Capacity building in financial management for relevant staff including through support for the Federal Treasury Training Academy.
Activities to Strengthen External audit will include:
i) Restructuring of the Office of the Auditor General of the Federation (OAuGF) in line with a new audit law;
ii) Reviewing and modernizing audit approaches; and
iii) Capacity building for staff of the OAuGF and strengthening of its IT capacity.
Activities to strengthen Financial Reporting will include:
i). Full adoption and dissemination of international standards relating to financial reporting, including IFRS/IAS, IPSAS and ISA;
ii). Review of the 2003 NASB Act to create a Financial Reporting Council and to address current institutional weaknesses in regulation, compliance and enforcement of standards;
iii). Strengthening of the technical and professional capabilities of the NASB and SEC; and
iv). Improving business ethics, and international accounting and auditing standards contents of higher institutions’ accounting curriculum.
Procurement Reforms will focus on:
i) Preparation of regulations in line with the new Procurement Law and translation of Law and regulations into the three national languages to allow wide dissemination;
ii) Support for setting up and effective take-off of the Public Procurement Bureau as the procurement regulatory body;
iii) Procurement training and capacity building in the public sector including strengthened oversight capacity, and public enlightenment; and
iv) Preparation of National Standard Bidding Documents.
Support for addressing inefficiency and corruption in revenue collection will include:
i) Development of FIRS institutional capacity through preparation and implementation of detailed HR reform and training plan, and a change management strategy;
ii) Revised tax administration procedures for FIRS; and
iii) Development of medium term information systems road map for tax administration and for NCS.
Support to the targeted anti-corruption activities of the EFCC will include:
i) support for take off of the Financial Intelligence Unit (FIU);
ii) strengthening the capacity of investigators;
iii) upgrading of IT capacity; and
iv) effective communication and publicity campaign against economic and financial crimes.
Civil Service Administrative Reforms.
This component will support a progressive transformation of the federal civil service through a combination of initial systemic reforms and the restructuring, including downsizing of key agencies as pilots for a later broadening of reforms. The pilot agencies are the Federal Ministry of Finance, the National Planning Commission (NPC), State House, the Ministry of the Federal Capital Territory (MFCT) and the Ministry of Information.
Specific activities to be funded include:
(i) Designing and implementing an integrated personnel and payroll system to improve the management of human resources and eliminate fraud
(ii) Reforming the pilot MDAs through restructuring, rightsizing and capacity building, including for preparing, executing and monitoring outcomes of their budgets.
(iii) Strengthening the newly established Bureau of Public Service Reforms (BPSR) to lead and coordinate the system wide reforms.
(iv) Carrying out diagnostic studies and dialogue on key service wide reforms to build broader support for the reforms service-wide and inform preparation of detailed plans to extend the reform process to other MDAs.
(v) Designing and implementing a Performance Improvement Fund to support innovative capacity building and business process pilots in reforming MDAs
Strengthening Pension Management and Accountability
The Government is reforming pensions and undertaking measures to improve management and accountability. In July 2004, a new Pensions Bill was passed establishing a contributory scheme for both public and private sectors. Government intends to implement the bill in a phased manner, starting initially with the public service and then moving on to implementation in the private sector. Many of the institution-building measures required to implement the recently adopted Pension Act are generic requirements applicable to any effort to strengthen the pension system. This component will therefore support measures to improve the management and accountability of the public service pension system as well as provide the analytical tools to evaluate the implementation of the Act for the private sector. Support will include:
i) Establishment of a regulatory and supervisory framework for the Civil Service pension system;
ii) Capacity building for the recently established National Pensions Commission;
iii) Development of an IT strategy and the procurement of software applications and hardware;
iv) Conducting a full scale audit, reconciliation and actuarial valuation of pension entitlements for Federal Government employees and retirees, and development of a benefit arrears reduction strategy; and
v) Public education on pension reform measures to improve management and accountability.
Strengthening of Statistics and Statistical Capacity
The Federal Government has recently completed a Masterplan for the National Statistical System with key objective of strengthening the capacity of the national statistical system to generate reliable, timely and relevant statistical data to support policy making and monitoring achievement of Nigeria’s development objectives. The following elements of the masterplan will be funded under this component:
q Organizational and institutional development of the National Statistical System including review and modernization of legislation and regulations.
q Training and re-professionalization of staff.
q Data Development including adaptation of internationally accepted standards and methodologies in data production and conduct of target surveys and topical statistics including sectoral statistics.
q Provision of necessary infrastructure including computer processing equipment (hardware) and software for strengthening data collection, processing and analysis.
Project Management and Portfolio Monitoring
A PCU in MOF will provide overall coordination for the project, and arrange the monitoring and evaluation of project activities. It will also carry out detailed monitoring of the entire World Bank portfolio in Nigeria as part of Federal Government efforts to improve implementation and impact of the portfolio. The following will be funded under this component:
q The incremental operating costs of the PCU and PITTs, and the fees of project external auditors to be appointed by the Auditor-General; and
q Monitoring and Evaluation of project activities, and the review and monitoring of projects in the World Bank portfolio by the Project Monitoring Team of the Department of Multilateral Institutions, FMOF
A.4. Project Location and salient physical characteristics relevant to the safeguard analysis:
The project will be located within the Federal Government of Nigeria in Abuja, the Federal Capital Territory.
B. Check Environmental Category A [ ], B [ ], C [X], FI [ ]
Comments: This project will not fund any activities that would cause an adverse effect on the environment. The Corporate Financing Reporting subcomponent will not involve any construction but could accommodate renovation/rehabilitation of a library, and there will be no associated environmental impact. Therefore, the project is classified as a Category C. Should any environmental issues evolve, this section would be revised.
C. Safeguard Policies Triggered
Yes / No
Environmental Assessment (OP/BP/GP 4.01) / [ ] / ü
Natural Habitats (OP/BP 4.04) / [ ] / ü
Pest Management (OP 4.09) / [ ] / ü
Cultural Property (draft OP 4.11 - OPN 11.03-) / [ ] / ü
Involuntary Resettlement (OP/BP 4.12) / [ ] / ü
Indigenous Peoples (OD 4.20) / [ ] / ü
Forests (OP/BP 4.36) / [ ] / ü
Safety of Dams (OP/BP 4.37) / [ ] / ü
Projects in Disputed Areas (OP/BP/GP 7.60)[*] / [ ] / ü
Projects on International Waterways (OP/BP/GP 7.50) / [ ] / ü
Section II – Key Safeguard Issues and Their Management
D. Summary of Key Safeguard Issues.D.1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts.
No safeguard policies are triggered by this project. The project will not fund any activities that would cause an adverse effect on the environment. The availability of funding for retrenchment under the project will help address the social safeguard issues. The project includes activities to help retrenched staff acquire some basic skills that will help those who can join the private sector and provide training for setting up micro enterprises in a few key area. The social impacts of the project will be monitored through tracer studies of staff who have been retrenched.
D.2 Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area.
None
D.3. Describe the treatment of alternatives (if relevant)
Not relevant
D.4. Describe measures taken by the borrower to address safeguard issues. Provide an assessment of borrower capacity to plan and implement the measures described.
Not applicable
D.5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people.
Not applicable
F. Disclosure Requirements Date
Environmental Assessment/Audit/Management Plan/Other:
Date of receipt by the Bank Not Applicable
Date of “in-country” disclosure Not Applicable
Date of submission to InfoShop Not Applicable
For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors: Not Applicable
Resettlement Action Plan/Framework/Policy Process:
Date of receipt by the Bank Not Applicable
Date of “in-country” disclosure Not Applicable
Date of submission to InfoShop Not Applicable
Indigenous Peoples Development Plan/Framework:
Date of receipt by the Bank Not Applicable
Date of “in-country” disclosure Not Applicable
Date of submission to InfoShop Not Applicable
Pest Management Plan:
Date of receipt by the Bank Not Applicable
Date of “in-country” disclosure Not Applicable
Date of submission to InfoShop Not Applicable
Dam Safety Management Plan:
Date of receipt by the Bank Not Applicable
Date of “in-country” disclosure Not Applicable
Date of submission to InfoShop Not Applicable
If in-country disclosure of any of the above documents is not expected, please explain why.
The project will not fund any activities that would cause an adverse effect on the environment. The availability of funding for retrenchment under the project will help address the social safeguard issues. The project includes activities to help retrenched staff acquire some basic skills that will help those who can join the private sector and provide training for setting up micro enterprises in a few key area. The social impacts of the project will be monitored through tracer studies of staff who have been retrenched.