ContentsA strategic shift 1

Achievements and progress 4

Achievements 4

Better development planning 4

More realistic and output-focused budgets 5

More competent, capable and fit-for-purpose workforce 6

More transparent government business 6

Enhanced development knowledge and shared lessons 7

Progress 8

Value for money 11

Effectiveness 11

Efficiency 13

Economy 13

Strategyhighlights Significant strategic shift Expansion to Anambra, Katsina,

Niger, Yobe and Zamfara States Independent review indicated that

outputs moderately exceeded expectation

Unqualified audit opinion A year of intense activity and

significant progress

A strategic shiftThis annual report of the State Partnership forAccountability, Responsiveness and Capability(SPARC) programme covers the period August2012–June 2013, the fourth year ofimplementation, and presents progress againstwork plans submitted in July 2012. The reportingperiod reflects a realignment of the operationalyear to 1 July–30 June to synchronise withDepartment for International Development (DFID)quarterly reporting.

Significant strategic shift

SPARC has been working in the five states ofEnugu, Jigawa, Kaduna, Kano and Lagos sincethe programme began in 2008. During thereporting period there was a significant strategicshift. In September 2012, we submitted abusiness case for expansion of the programme tofive additional states and extension of thecontract until August 2015 to DFID Nigeria. This S

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was approved in November 2012. In June 2013DFID and HTSPE Ltd. signed ContractAmendment No. 10 for the expansion andextension of SPARC.

Expansion to Anambra, Katsina, Niger, Yobe and Zamfara States approved

In anticipation of the formal contract amendment,we established offices in Anambra, Katsina,Niger, Yobe and Zamfara States. StateProgramme Managers were appointed for each ofthese offices, with the exception of Anambrawhich is overseen by the Enugu office.

Drawing on the experiences of our work to date,we held separate high-level meetings with eachstate in Abuja. Each meeting involvedrepresentatives from the state chosen by theState Governor. The outcome of the meetingswas that SPARC and each State Governmentestablished an 'agreed intervention approach' toaccelerate reforms.

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Figure 1: SPARC in Nigeria

Output 2: State public financial management improved: Score: A+ (outputs moderately exceeded expectation)

Output 3: State civil service performance improved: Score: A (outputs met expectations)

Output 4: Federal support to state governance improved: Score: A (outputs met expectations).

"The reports provided by SPARC that we examined, and validated with external stakeholders, were invariably accurate and reliable." Independent Monitoring and Evaluation Project review team January 2013

In March 2013, SPARC received an unqualifiedaudit for the period January 2010 to March 2012,confirming the financial integrity of operations.

Unqualified audit opinion

The year 2012–2013 has been full of activity. Wehave made significant progress and realisedmajor achievements. The next section of thisreport outlines progress towards our outcomes.The final section presents our assessment ofSPARC's value for money, an issue of increasingconcern and importance to us.

A year of intense activity and significant progress

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Agreed intervention approaches to accelerate reforms established between SPARC and State Governments in Anambra, Katsina, Niger, Yobe and Zamfara

Because of the deteriorating security situation inthe north of the country, SPARC contractedControl Risks to advise on security and set up asecurity unit. The security unit started work inDecember 2012. Nevertheless, despite themeasures put in place by the unit, travel byinternational consultants to the northern stateswas severely curtailed.

Deteriorating security situation in the north of the country severely curtailed travel by international consultants

The annual DFID review of SPARC, conducted bythe Independent Monitoring and EvaluationProject, took place in January 2013. This 'lighttouch' review involved a desk study, visits toEnugu and Lagos, and discussions withstakeholders in the two states and at the federallevel. The review team concluded that "thereports provided by SPARC that we examined,and validated with external stakeholders, wereinvariably accurate and reliable." Taking accountof the scores1 on the four outputs, SPARC scoredA+, indicating that, overall, outputs moderatelyexceeded expectation:

Output 1: Policy and strategy development, monitoring and evaluation improved:Score: A++ (outputs substantially exceeded expectation)

1 Scored according to DFID's new reporting and e-information system, ARIES

Achievementsand progresshighlights Nearly all activities scheduled for

2012–2013 were delivered as planned

Quality of medium-term sector strategies improving across the board

Higher budget allocations for education and health

State governments are improving their ability to execute their budgets

States in the expanded programme are taking real steps to streamline government operations and avoid duplication

Support for the Nigeria Governors'Forum State Peer Review Mechanism encourages states to become more accountable to the electorate

Governance share fairs give all 36 states opportunities to share experiences about what works and to learn from others

The new SPARC Resource Centrehas been well received

Human Resources Management Resource Suite launched

3,000 signed up for new SPARC Facebook newsletter

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Achievements and progress

Enhancing the efficiency and effectiveness of the use of public resources

The objective of the SPARC programme is toenhance the efficiency and effectiveness of theuse of public resources in selected states. Tomeet this objective, we are working to improvethe:

Effectiveness of policies and strategies, and the consistency of medium-term plans and budgets with policies and resource envelopes

Realism and predictability of multi-year budgets

Capacity and competence of the public service Responsiveness of state governments to

national initiatives to improve state performance.

SPARC also works to ensure that the lessonslearned about improving performance in thestates where we work are shared widely, wellbeyond our sphere of operation.

Sharing lessons learned

ACHIEVEMENTSBetween August 2012 and June 2013, wedelivered more than 90% of all activitiesscheduled (compared to 70% in 2012 and 65% in2011). In the five additional states, includingYobe, we delivered nearly all planned activities,despite the significant security challenges innorthern Nigeria.

We delivered nearly all activities planned for 2012–2013

BETTER DEVELOPMENT PLANNINGWe are improving the capacity and competenceof partners to undertake robust, realistic andinclusive development planning. With SPARC'ssupport, the Lagos State Government developedthe Lagos State Development Plan 2013–2025, aconsolidated development plan that will guide itsactivities for the next 12 years.2 This is the first

such plan and is important, given that differentparts of the Lagos State Government claim to'speak for Lagos'. The agreement on the planmeans that the State speaks with one voice onthe development agenda, and that the plan thushas a greater chance of surviving changes inpolitical leadership. This is very significant fordevelopment planning in Nigeria as Lagos Statesets the pace and is emulated by other states.

Consolidated long-term development plan for Lagos sets the pace for other states

In Kano State we overcame initial difficultiesfollowing a change of administration and workedwith the government to produce and launch theKano State Development Plan 2012–2015. InAnambra State we documented the AnambraIntegrated Development Strategy which clearlysets out, for the first time, the state developmentphilosophy that guides governance. In JigawaState we continued to support theComprehensive Development Framework and inEnugu State the Vision 20:20 Medium TermImplementation Plan.

A review of 32 medium-term sector strategies(MTSSs) across the five states in which SPARC

2 The Lagos State Executive Council approved the Lagos State Development Plan on 1 July 2013, technically just after the end of the year to which this Annual Report relates

has been working since 2008 showed that thequality of strategies is improving across theboard. There is also evidence that MTSSs arebeginning to be better reflected in state budgets,particularly in Jigawa, Lagos and Enugu.3

Quality of medium-term sector strategies improving across the board

SPARC continues to contribute to DFID's goal ofimproving Nigeria's use of its own resources toachieve the Millennium Development Goals(MDGs). Working with other DFID state-levelprogrammes, we played a part in increasingbudget allocations to education and health. Forinstance, in Jigawa State, allocations to thehealth sector rose from 7% of the total budget in2008 to 12% in 2012. Coupled withimprovements in health-sector planning andbudgeting, this led to a fall in maternal mortalityfrom 3.7% in 2008 to 1.3% in 2011. Theproportion of children fully immunised has alsorisen from 22% in 2008 to 62% in 2011. Theshare of the total budget allocated to educationand health is becoming more predictable for moststates. However, there continues to be a need tomaintain pressure on governments to releasemore of the appropriations for these two sectors.

Higher budget allocations for education and health

MORE REALISTIC AND OUTPUT-FOCUSEDBUDGETSIn general, budgets are becoming more realisticin the states where SPARC works. Governmentsare improving their ability to execute theirbudgets. Jigawa State executed 96% of itsbudget in 2011 and 94% in 2012. This level ofbudget execution compares favourably with thatof any government anywhere in the world. Forexample, the United States of America executed94% of its budget in 2012.4 Similarly, budgetexecution in Lagos State, at 89%, is at its bestlevel for 12 years.

In the states where SPARC works governments are improving their ability to execute their budgets

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In the five states where we recently startedworking we are already making inroads intoimproving budget credibility. In most Nigerianstates, budget estimates exceed the revenue thatcan be realistically expected. In the short timethat SPARC has been active in the five additionalprogramme states, Niger State has reduced thegap between projected spending and the fundsavailable by about 10%. The gap in ZamfaraState is similarly narrowing. The position inexisting programme states has not changedmuch: Jigawa and Lagos prepare realisticbudgets, but Kano and Kaduna continue toprepare unrealistic budgets. However, even insome states where budgets are stillunreasonable, execution of the budgets hasimproved, for example in Kaduna State.

The states in which we work are making greaterefforts to improve internally generated revenueand reduce their dependence on federalallocations. With our support, often in partnershipwith the Growth, Employment and Markets in theStates III (GEMS3) programme, Enugu State hasdoubled its internally generated revenue andKaduna State is raising an additional £1 millionevery month from internal sources. More realisticbudgeting means there is more money to funddevelopment initiatives. Some states, such asKano, are learning how they can generate moreinternal revenue from the experiences of LagosState. Lagos generates over 60% of its totalrevenue from internal sources, whereas internallygenerated revenue across most Nigerian states isunder 10%.

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3 SPARC Report on Medium Term Sector Strategy Development: Their Content Standards and their Influence on State Budgets, April 2013

4 http://www.usfederalbudget.us/federal_budget_estimate_vs_actual

Enugu State has doubled its internally generated revenue

MORE COMPETENT, CAPABLE AND FIT-FOR-PURPOSE WORKFORCESPARC continued to improve the capacity andcompetence of the states' public services.Mandates are becoming clearer. States arebecoming better at planning how to manage,develop and deploy their personnel to achievetheir development objectives. In addition tohelping clarify mandates in the five states thatSPARC first engaged with, the states in theexpanded programme are taking real steps tostreamline government operations and avoidduplication. Despite extraordinary securitychallenges, Yobe State has now clarified themandates of all its ministries, departments andagencies (MDAs). SPARC initially supported eightYobe State MDAs through this process. Thegovernment then demonstrated its commitmentto reform by drawing on its own resources to

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clarify the mandates of 16 further MDAs using themethod introduced by SPARC. The ability tocontinue to undertake governance reforms in aconflict (rather than post-conflict) situation, asSPARC is doing in Yobe State, is a developmentphenomenon worthy of deeper study, and this isplanned for next year.

States in the expanded programme are taking real steps to streamline government operations and avoid duplication

With SPARC's support, the Katsina StateGovernment has rid itself of 'ghost' workers,saving the State £1.4 million a year. Similarly, theZamfara State Government undertook a staffverification exercise that resulted in the removalof 3,000 names from its payroll.

MORE TRANSPARENT GOVERNMENTBUSINESSSPARC is working hard to encourage transparencyand accountability to the public in all the stateswhere we operate. In 2013, Zamfara Statepublished its budget on the internet for the firsttime. The brand new website was financed entirelyby the Ministry of Budget and Economic Planning.With our support Kano State has published theKano State Development Plan and State Budget,and made them available to the public.

In Katsina State, SPARC and the StateAccountability and Voice Initiative (SAVI), workingwithin government and through the State Houseof Assembly, have encouraged the AuditorGeneral to release the audited accounts for 2009,2010 and 2011. This brings Katsina Stateaccounts up to date for the first time in five years.In Yobe State, the Office of the Auditor Generalhas financed and set up a brand new website,and published all previous audit reports.

Anambra, Lagos and Kaduna continue to deliverand publish timely final and audited accounts –generally producing final accounts within sixmonths of the year end, and audits within afurther three months.

Anambra, Lagos and Kaduna continue to deliver and publish timely final and audited accounts

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SPARC also continues to work closely with SAVI,providing technical support to SAVI partners inareas such as budget analysis and budgetoversight. This further encourages transparencyand accountability by raising demand from statehouses of assembly and civil society for betterperformance by the executive.

Similarly, our support for the Nigeria Governors'Forum (NGF) State Peer Review Mechanism(SPRM) contributes to encouraging states to bemore accountable to the electorate. AnambraState completed its peer review and reviews arein their final stages in Niger and Jigawa. Somestates where SPARC is not active, such asRivers, Delta and Ekiti, have also embraced theSPRM and many other states are keen to do so.

Support for the Nigeria Governors' Forum State Peer Review Mechanism contributes to encouraging states to be more accountable to the electorate

ENHANCED DEVELOPMENT KNOWLEDGEAND SHARED LESSONSSPARC is ramping up efforts to ensure that thelessons we are learning benefit practitionersbeyond the states where we work. We haveorganised regional governance share fairs in theSouth East and South West Zones, and partneredwith the World Bank and the NGF on a nationalpublic financial management event. These eventsare opportunities for all 36 states to shareexperiences about what works in their states andto learn from others.

Regional governance share fairs are opportunities for states to share experiences about what works in their states and to learn from others

We also share experiences in the widerdevelopment community. For example, at the2013 UK Evaluation Society Conference, SPARCpresented a paper setting out how theprogramme uses internal evaluations to informdecision-making and shape programme delivery.The paper won the meeting's Best Paper Award.SPARC also spoke (by video conference) on howto achieve governance improvements indysfunctional environments at the General

Assembly of the Learning Network for CapacityDevelopment in Brussels, in June.

In March 2013, we launched the first edition ofthe SPARC Resource Centre. The ResourceCentre is a collection of new tools, new ideas andnew approaches on improving governance andgovernment processes. It has been well receivedby DFID, the Institute of Development Studies atthe University of Sussex, the DFID-fundedGovernance and Social Development ResourceCentre at the University of Birmingham, theInternational Monetary Fund and the UnitedNations. Copies have been widely circulated toour state government partners and other states,for example Ebonyi, Ekiti, Ogun, Ondo, Osun andOyo, have requested copies.

The SPARC Resource Centre – a collection of new tools, new ideas and new approaches on improving governance and government processes – has been received well

SPARC Resource Centre Pocket Guide – online

version available at www.sparc-nigeria.com/rc

In June 2013, we also launched our HumanResources Management Resource Suite, whichprovides guidance and resources on humanresources management and development. TheResource Suite was launched by the Heads ofService of the ten states in which SPARC works.

Human Resources Management Resource Suite launched

During the year, SPARC also launched itsFacebook newsletter and by the end of the yearover 3,000 people had signed up to it. Articleshave reached up to 400,000 users.

3,000 signed up for new SPARC Facebook newsletter

PROGRESSWe have made significant progress towardsSPARC's overall objective. In most states, 90%or more of scheduled programme activities wereimplemented in 2012–2013 (Figure 2). Only inJigawa State were there some difficulties, chieflyin public financial management, where specificinternational expertise was needed which wecould not deliver. This disappointed expectations,which were higher than in any other state exceptLagos. Going forward, we will resolve thisproblem by improving management coordinationand introducing public financial managementcommunities of practice (CoPs).

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In most states, 90% or more of scheduled programme activities were implemented in 2012–2013

The programme is on track. Progress is shown inFigure 3.

The annual review team confirmed the excellentlevel of progress by giving the programme anoverall rating of A+. Work on policy and strategywas particularly strong, with a number of statesbringing their medium-term plans to fruition, andsetting up stronger frameworks for monitoringand evaluation. In general, budget processes andframeworks are getting stronger. Theperformance of the federal programme isparticularly robust. Public service managementreforms are taking somewhat longer, largelybecause by nature they are longer term andfollow a stricter sequence in corporate planning.

The annual review team confirmed the excellent level of progress by giving the programme an overall rating of A+

Two areas require stronger managementcoordination – public financial management inJigawa State as explained above, and the reformprogramme in Zamfara State in general,particularly in the area of public servicemanagement. In Zamfara, the programme startedslowly, but has recently picked up speed. Anumber of stages in reform are nearly complete,which should result in far better ratings in thenext assessment.

Figure 2: Work plan delivery by state

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Figure 3: Progress by state

Note:Outcome: The efficiency and effectiveness of selected state level governments’ use of public resources

is enhanced.Output 1: Policy and strategy development, monitoring and evaluation improved.Output 2: State public financial management improved.Output 3: State civil service performance improved.Output 4: Federal support to state governance improved.

Value for moneyhighlights SPARC has generated significant

returns on investment and is increasingly cost-effective

More realistic state budgets Changes have resulted in states

making significant savings and generating more revenue

SPARC support is helping give other development partners the confidence to invest in state governments

SPARC has contributed to encouraging states to spend more on education and health

Across the programme, the proportion of consultancy days provided by national consultants rose from 43% to 57% in the period 2010/11–2012/13

SPARC is successfully encouragingstate governments to take financial responsibility for governance reform initiatives

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Value for moneyThe assessment of the extent to which SPARC isdelivering value for money (VFM) is based on adetailed analysis conducted for the 2012 and2013 VFM Working Papers.

SPARC has generated significant returns on investment and is increasingly cost-effective

EFFECTIVENESSSPARC has generated significant returns on theinvestment it represents and is increasingly cost-effective (Figure 4: 1). SPARC has contributed to akey outcome, state government budgets whichbetter reflect actual revenues. Realistic budgetsare important because they mean states candeliver more effective and more predictableservices. Since the start of the programme,SPARC has provided technical solutions that havecontributed to the elimination of budget allocationsof over £328,000,000 which states, in reality,would not have funded.

More realistic state budgets

SPARC support has contributed to changeswhich have resulted in states making significantsavings and generating more revenue. Forexample, SPARC helped Kano and Jigawa Statesrecover funds from dormant bank accounts,supported initiatives that improved revenues inEnugu and Kaduna, and helped remove 'ghost'workers from payrolls in Katsina and Zamfara.Through these initiatives, it is estimated that anadditional £147,000,000 has been freed up fordelivering basic services (Figure 4: 2) since theprogramme began.

Changes have resulted in states making significant savings and generating more revenue

SPARC support is helping give otherdevelopment partners the confidence to invest inkey institutional reforms in states. For example,with SPARC's help, Lagos State successfully metthe conditions required to access World Bankloan financing of £240,000,000 (Figure 4: 3).

SPARC support is helping give other development partners the confidence to invest in state governments

Working in support of sister programmes, theEducation Sector Support Programme in Nigeria(ESSPIN) and the Partnership for TransformingHealth Systems II (PATHS2), SPARC hascontributed to encouraging states to spend moreon education and health. This has been done byhelping to improve sector strategies, thepredictability of sector budget releases and theway in which public services are managed (Figure 4: 4). This support, together with savingsand higher revenues, has contributed to stategovernments spending an additional£366,000,000 on education and health (Figure 4: 5). This, in turn, has helped enrol anadditional 1,500,000 children5 in primary andjunior secondary schools (Figure 4: 6).

5 ESSPIN Quarterly Progress Report, March 2013

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Figure 4: Value for money

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EFFICIENCYSPARC continues to implement its policy ofassigning full-time technical staff a greater role insupporting capacity development at the state levelrather than engaging national consultants. Thissaved around £1,800,000 in 2010/11–2012/13(Figure 5: 1). A further estimated £1,600,000 wassaved by keeping administrative spending toaround £1,000,000 despite expanding into fivemore states and scaling up the programme inLagos, Jigawa and at federal level.

The budget execution of 70% reflects thedebilitating effect of the precarious securitysituation in the country. This curtailed the abilityof the programme to deliver its planned outputsin 2011/12. The measures put in place to allowSPARC to operate more effectively in thisenvironment have been successful, and budgetexecution was 92% in 2012/13 (Figure 5: 1).

SPARC budget execution was 92% in 2012/13

The strategy of using Nigerian consultants (andinternational-calibre consultants based in Nigeria)in preference to flying in expatriate consultantscontinues, even as the programme expands tofive more states. Across the entire programme,the proportion of consultancy days provided bynational consultants rose from 43% to 57% in the

period 2010/11–2012/13 (see Figure 5: 2), saving£300,000.

Across the programme, the proportion of consultancy days provided by national consultants rose from 43% to 57% in the period 2010/11–2012/13

SPARC is successfully encouraging stategovernments to take financial responsibility forgovernance reform initiatives which we currentlysupport. These include funding the roll out ofMTSSs in Lagos State, the annual review of theChange Programme in Kaduna State, the CoreWelfare Indicator Questionnaire survey in JigawaState and starting up SPRM in four pilot states.This adds up to a total of £1,000,000 providedby state governments – an amount that SPARCwould otherwise normally provide.

SPARC is successfully encouraging state governments to take financial responsibility for governance reform initiatives

ECONOMYSPARC's main cost is consultancy fees. In theearly stages of the programme, SPARC did notdeploy large numbers of consultants, despiteDFID's concerns that the programme was toolean at inception. Instead, SPARC graduallyscaled up technical assistance based onidentified needs and the likelihood of success. As indicated previously, SPARC increasingly uses Nigerian consultants. As a result, theaverage fee has fallen by 16% over the period2009/10–2012/13, saving around £1,000,000(Figure 5: 3).

In implementing programme activities, SPARCensures that it seeks the best value possible. Thisdoes not mean that we always opt for thecheapest products or services, but that webalance the initial cost against longer-termefficiency and effectiveness. We have negotiateddiscounts with hotels and training venues, soughtno-cost alternatives to office locations andtraining venues (e.g. state governmentsecretariats), and expanded the roles of existingstaff rather than appoint new ones. It is estimatedthat through these and other economy measureswe have saved £500,000 to date.

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Figure 5: Efficiency cost savings

For more informationEmail us: info@sparc-nigeria.comTelephone us: +234 (0) 7029 682832Visit our website: www.sparc-nigeria.com

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The views expressed in this Annual Report are those of the authors and do not necessarily represent the views of the Department for International Development.