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Table of Contents


1.Introduction 7

2.Main Changes in Country Context 7

3.Political Environment 7

4.Security 7

5.Recent Economic Developments and Outlook 8

6.Poverty Reduction and Shared Prosperity 11

7.Emerging Priorities and Government’s Agenda 12

8.Summary of Program Implementation 13

9.CPS Cluster 1: Federally-led Structural Reform Agendas for Growth and Jobs 14

10.CPS Cluster 2: Quality, Effectiveness, and Efficiency of Social Services Delivery at the State Level for Greater Social Inclusion 15

11.CPS Foundational/Cross-Cutting Cluster 3: Governance and Public Sector Management 16

12.Knowledge Program 16

13.Emerging Lessons 17

14.Adjustments to the Country Partnership Strategy 18

15.Indicative WBG Program 19

16.CPS Program Adjustments 19

17.Adjustments to the Cluster 1: Federally Led Structural Reforms for Growth and Job Creation 19

18.Adjustments to the Cluster 2: Quality, Effectiveness and Efficiency of Social Service Delivery at the State Level for Greater Social Inclusion 21

19.Adjustments to the Foundational/Cross-Cutting Cluster 3: Governance and Public Sector Management 21

20.Risks to CPS Program 23



21.Annexes 25

List of Figures and Tables:

1.Introduction


This Performance and Learning Review (PLR) assesses progress to date on the World Bank Group’s (WBG) Country Partnership Strategy (CPS) for the Federal Republic of Nigeria for the period of fiscal year (FY) FY14-FY17 discussed by the Board of Directors on April 24, 2016. The CPS’s objectives are: (a) promoting diversified growth and job creation by reforming the power sector, enhancing agricultural productivity, and increasing access to finance; (b) improving the quality and efficiency of social service delivery at the state level to promote social inclusion; and (c) strengthening governance and public sector management, with gender equity and conflict sensitivity as essential elements of governance.

The PLR confirms the alignment of the CPS objectives with Nigeria’s development goals, but finds mixed progress towards achieving the CPS outcomes. Two out of seventeen CPS outcomes have been achieved while eight are on track to be achieved during the CPS period. However, it will take longer than expected – beyond this CPS period – to achieve some of the remaining seven outcomes. Two risks that were identified in the CPS significantly materialized: (1) macroeconomic risks; and (2) intensified security challenges. These developments are respectively discussed in detail in section II.C on Recent Economic Development and Annex 4 on Drivers of Conflict and Fragility in Nigeria. Macroeconomic difficulties and intensified security challenges, along with the longer than expected period of political transition and institutional weaknesses at subnational and national level slowed down the progress.

The PLR proposes to adjust the CPS to Nigeria’s emerging new development priorities. The 2015 elections brought to power the opposition party which took office in a context of marked security challenges and a severely weakened economy. The new administration has requested the WBG’s support in addressing macroeconomic challenges. The PLR thus proposes the addition of a new cross-cutting/foundational cluster – Restoring Macroeconomic Resilience Cluster (CPS Cluster 4) – for the remainder of the CPS period. The Government of Nigeria (GoN) has also requested additional WBG support in some prioritized areas such as North East (NE) recovery; diversifying the economy; enhancing climate resilience; and safeguarding social expenditures at a time of fiscal crunch while improving the efficiency and effectiveness of those expenditures. The PLR proposes to integrate this additional support in the three original CPS clusters.

A Systematic Country Diagnostic (SCD) will be prepared in FY17 to provide a knowledge platform for addressing Nigeria’s development challenges in the current changing context. The SCD will serve as the basis for the Country Partnership Framework (CPF), covering FY18-FY20.

2.Main Changes in Country Context

3.Political Environment


The 2015 elections marked, for the first time in Nigeria’s history, a peaceful transfer of power between two political parties. Since 1999, Nigeria had been governed by the People's Democratic Party. In March 2015, General Muhamadu Buhari, the candidate of the All Progressives Congress, won the presidential election, marking a critical juncture in Nigeria’s democratic transition.

The new cabinet was sworn into office seven months after the elections, in November 2015, reflecting the complexities of forming the new coalition government. Decision making mechanism under the new GoN calls for subtle political and regional trade-offs in a political environment whose stability rests on an elaborate system of power sharing at the federal level.

The new authorities reconfigured the federal Government. The number of ministries was reduced from 32 to 24. Budget responsibility was transferred from the Federal Ministry of Finance (FMOF) to the Ministry of Budget and Planning. In addition, the office of the Vice President was given a much stronger coordinating role in economic and other affairs. The President took on the role of the Minister of Petroleum.

The sharp decline in oil revenues has rekindled the debate on fiscal federalism. The considerations how to unlock the economic potentials of subnational levels of government has rekindled calls to devolve more powers for economic development to the states.

4.Security


The security situation in Nigeria continues to be influenced by terrorism, armed conflict and general crime. The Boko Haram insurgency in the North East (NE) has proved a considerable challenge to the country’s security forces and has led to the loss of more than 20,000 lives, the displacement of 2 million people, and has negatively affected the livelihoods of 6 million more people.1 The impact of the insurgency has transcended the geographic borders of the country, imposing economic and security costs on neighboring countries. In parallel, the attacks by Fulani herdsmen on farmers have intensified as they move south across Nigeria’s “middle belt” as the Sahel encroaches their pastures. Other security challenges include crime and kidnapping, particularly in urban areas, attacks on oil and gas infrastructure, and threats of renewed militancy in the Niger Delta. There is also some simmering discontent in Biafra in South East. At the root of the security challenges are high levels of poverty, joblessness, growing numbers of frustrated youth, as well as natural resources degradation and climate stressors (see Annex 4 for details).

President Buhari has acted decisively to tackle the challenges of insecurity. Steps have been taken to build a more efficient and effective coalition with Nigeria’s neighbors against Boko Haram. An offensive in late 2015 drove Boko Haram from much of the territory it held in Northeast Nigeria. However, the militants have since struck back with suicide bombings and attacks on civilians. The GoN’s response to the crisis in the NE has focused largely on security, humanitarian support, and service delivery. At the developmental level, the federal and state governments have formulated two regional initiatives, the Presidential Initiative for the NE, and the NE States Transformation Strategy. Complementing these are strong efforts to reach a regional solution to the shrinkage of Lake Chad, which has resulted in increased social conflicts and high rates of internal and cross-border migration. The critical and immediate challenge facing the GoN is to ensure the welfare of internally displaced people (IDPs), the host communities, and the population in the NE.

The intensified attacks by militants on oil and gas infrastructure in Niger Delta are affecting Nigeria’s oil and gas output. The attacks by the militant group – Niger Delta Avengers – since early 2016 have brought Nigeria's oil output to a 20-year low2. The GoN has been seeking solution by extending the Presidential Amnesty Program, followed by the scaling down of the military campaign and engaging in a dialogue with the Niger Delta Avengers.


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