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- 14.Adjustments to the Country Partnership Strategy
13.Emerging LessonsThe CPS program was designed with flexibility for a mid-term adjustment to account for FY14-FY15 diagnostic work; for engagement with the new GoN in 2015; and responses to Nigeria’s changing circumstances. However, the risk of program slowdown caused by the election cycle was not factored into the CPS design. The lesson learned is the need for greater alignment between the CPS period and the country political cycle. The WBG joint approach has a strong leveraging impact. The Joint Energy Business Plan involving the entire WBG in the frontrunner Independent Power Producers (IPP) sent a powerful market signal resulting in fair, balanced and bankable contracts which will inform future projects. It was also important for the GoN to signal to the market that all the products of the WBG are available during the nascent stage of power market development. The joint approach enabled information-sharing across the teams (and thereby improved efficiency) while remaining sensitive to issues of conflict of interest and confidentiality. This highlights the importance of WBG teams communicating to stakeholders the distinct roles of the different institutions within the WBG. Weak capacity, especially at the sub-national level, and institutional weaknesses continue to pose challenges to program implementation. This reconfirms that capacity and institution building take time and call for sustained engagement. Given the inherent weaknesses in fiduciary controls at both program and project levels, and consequent instances of fraud and corruption, the Bank’s PFM engagement needs to give greater support to institutional and capacity building to improve expenditure effectiveness. Added to this is the urgent need to reinforce transparency and accountability of SOEs. A number of these SOEs (particularly those in which the GoN maintains a controlling interest) pose fiscal risks to the GoN because their operations are generally not audited and the public is uninformed of their financial and operational performances. This calls for strengthening fiscal transparency, accountability and oversight and regulatory mechanisms, both at the federal and state levels. Understanding the local context is critical for providing effective development support. Leadership is crucial, and in the Nigerian context of variable institutional capacity, the role of top leaders is more pronounced than in settings with higher overall institutional capacity. While leadership is critical, by itself it is insufficient to promote and execute reforms. The federated structure of governance in Nigeria calls for consensus building among a wide range of stakeholders and decision making as reforms can easily be stalled by veto players within the system. In addition, the sustainability of reforms depends on inclusive coalitions as well as institutions and rules so as to consolidate and implement change. In Nigeria, the priority given to institutional development has often lagged behind political initiatives, and momentum tends to lag as leaders shift their commitments or leave office. The Bank has taken steps to enhance its poverty effectiveness. The 2016 Poverty Portfolio Review assessed the extent to which the Bank’s operational portfolio over the period 2010-15 has contributed to accelerating poverty reduction in Nigeria. Lessons include:
From an IFC perspective, client-focused approaches have proven instrumental. Successful IFC private sector engagement has been possible through consistent client engagement, flexible solutions and adequate resource allocation. IFC’s advisory solutions have had a catalytic role in deepening reach and impact, especially for the financial sector. Meanwhile, the most recent headwinds have revealed that macroeconomic vulnerabilities can substantially hamper project operations and lead to a deterioration of portfolio quality. Moving forward, a more active portfolio management will help navigate economic challenges. In addition, closer engagement with IMF will ensure a more coordinated and sequenced approach to supporting the financial sector, particularly given the current macroeconomic turbulences. 14.Adjustments to the Country Partnership Strategy
The PLR confirms the relevance of the CPS objectives to Nigeria’s development priorities. It also proposes to expand WBG support in addressing the two emerging priorities of (a) restoring macroeconomic resilience; and (b) reducing the service delivery gap and livelihood deficits in conflict-affected states in the NE. The PLR also proposes alignment with the Nigeria political cycle. A 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 CPF. The next general and Presidential elections are due in the first half of the calendar year 2019, and a new GoN is likely to take office in FY20. As such, the PLR proposes that the next CPF covers FY18-FY20, spanning the period until the next political transition. The full alignment with the Nigeria political cycle will be achieved by a subsequent CPF for the period FY21-FY25.
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