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TRANSCRIPT
Document of
The World Bank
FOR OFFICIAL USE ONLY
Reort No. P-3648-UNI
REPORT AND RECOMMENDATION
OF THE
?RESIDENT OF THE
1TETERhNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
TO THE
EXECUTIVE DIRECTORS
ON A
PROPOSED LOAiN
IN AN AMOUNT EQUIVALENT TO US$13 MILLION
TO THE
FEDERAL REPUBLIC OF NIGERIA
FOR A
TECHNICAL ASSISTANCE PROJECT
November 29, 1984
Lhis document has a restricted distribution and may be used by recipients only in tde performnce oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
Calendar 1983 October 1984
Currency Unit = Naira NUS$1 = NO.72 N0,75Ail US$1.38 US$1.34
ABBREVIATIONS
CBN - Central Bank of NigeriaECAs - Export Credit AgenciesEFF - Extended Fund FacilityFMF - Federal Ministry of FinanceFMG - Federal Military GovernmentFMNP - Federal Ministry of National PlanningFOS - Federal Office of StatisticsLNG - Liquefied Natural Gas
mbd - million barrels per dayOPE - Office of Project Execution (UNDP)SAL - Structural Adjustment Loan
FISCAL YEAR
January 1 - December 31
FOR OMCIAL USE ONLY
NIGERIA
TECHNICAL ASSISTANCE PROJECT
LOAN AND PROJECT SUMMARY
Borrower: Federal Republic of Nigeria
Amount: US$13 million equivalent, including capitalizedfront-end fee.
Terms: Payable over 20 years, including 5 years of graceat the standard variable interest rate.
ProjectDescription: The project comprises a five year program of
technical assistance to the Federal Ministry ofFinance, the Federal ;nistry of NationalPlanning and the Federal Office of Statistics.Consultant services and data processing equipmentwould be furnished toi strengthen the managementinformation system upon which economic decision-making is based. The monitoring of external debtand of national plan implementation would bestrengthened. The linkage between the nationaldevelopment plan and the budget would be improvedand programs for .he training of planners wouldbe developed. Insomuch as the ministrLesbenefiting from the project are severelyunderstaffed, there is a risk that insufficientcounterpart support may br provided. In order tominimize this risk, new acatinistrative structureswould be set up on a permanent basis, whereappropriate, to handle new functions.
I This document has a resicted distrbution and nay be used 'y recipients only in the Performarce ofther official duties. Its contents may not otherwise be diset ed without World Bank authorization.
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Estimated Cost:
Local Foreign Total-U US$ mnlion
Consultancy Services 2.03 4.17 6.20Data Processing Equipment and Software 0.17 1.18 1.35Training and Fellowships 0.32 1.08 1.40Counterpart Support 1.55 - 1.55Unidentified Activities 1.17 1.73 2.90
Total Base Costs 5.24 8.16 13.40
Physical Contingencies 0.03 0.04 0.07Price Contingencies 2.70 0.80 3.50
Total Project Costs 7.97 9.00 16.97
Front-end Fee - 0.03 0.03
Total Financing Required 7.97 9.03 17.00
Financing Plan:
rBRD 3.97 9.03 13.00Federal Military Government 4.00 - 4.00
Total 7.97 9.03 17.00
Estimated Disbursements:
Bank Fiscal Year 1985 1986 1987 1988 1989 1990- -US$ million
Annual .40 3.50 4.60 2.40 1.20 0.90Cumulative .40 3.90 8.50 10.90 12.10 13.00
Rate of Return: Not applicable
Staff Appraisal Report: No separate report
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS ON A
PROPOSED LOAN TO THE FEDERAL REPUBLIC OF NIGERIAFOR A TECHNICAL ASSISTANCE PROJECT
1. *I submit the following report and recommendation on a proposed loanto the Federal Republic of Nigeria for the equivalent of US$13 million to helpfinance a teebnical assistance project. Interest on the loan would be at thestandard variable rate. The loan would be amortized over 20 years including 5years of grace.
PART I - THE ECONOMY
2. The civilian government of Nigeria was replaced by a militarygovernment on December 31, 1983. The assessment of the Nigerian economicsituation in this report is based largely on the work of an economic updatingmission of February/March 1984 supplemented by further analysi3 undertaken byBank staff on the basis of the 1984 budget and subsequent developments. Thefindings of a 1982 economic mission were more fully reflected in a CountryEconomic Report (No.4506-UNI) which was distributed to the Executive Directorson August 15, 1983. Annex I presents selected social and economic indicatorsfor Nigeria.
Background
3. Nigeria, with a population of about 94 million in 1984, is the mostpopulous country in Africa. Among sub-Saharan Rank members, in 1980 Nigeriaaccounted for about 45 percent of gross output and more than 60 percent ofregional investment. Its GNP per capita is estimated at about US$760 in 1983,which is twice the average for sub-Saharan Africa. While Nigeria, as a majoroil exporter since the early seventies, enjoyed a substantially improvedresource base from increased oil revenues, it still remains at a very earlystage of development in terms of socio-economic indicators, in which itcompares with other sub-Saharan countries.
4. Following a civil war and 13 years of military rule, a new federalconstitution was adopted, and an elected civilian government came into powerin 1979. This government was reelected in 1983. The Nigerian military tookover the government '.n December of the same year. The Federal MilitaryGovernment (FMG) is led by Major-General Nohammadu Buhari.
Macro-economic Developments
5. Nigeria has been undergoing a rapid socio-economic transformationsince the upsurge of oil prices in 1973-74, which dramatically altered thecountry's resource position. Between then and the late seventies, Nigeria'sdevelopment strategy was based on sustaining a hi-gh rate of growth and
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diversifying the economy through the resources generated by the oil sector.The principal objective of the policies pursued by the Nigerian decision-makers was to translate the large oil revenues accrued - about US$100 billionin current prices during the 1973-81 period - into investments in economic,social, and physical infrastructure. While there have been some -non-economic investments and waste, significant development gains were made inboth economic and social infrastructure. Transport infrastructure,particularly roads and ports, expanded considerably. Power generatingcapacity tripled, and refining capacity more than quadrupled since 1973.Manufacturing grew at an average annual rate of 10 percent during the 1973-82period although there was a highly distorted investment structure due to largevariations in the rates of effective protection provided to various industrialsub-sectors. There also has been a rapid spread of education at all levels;in particular, the primary enrollment ratio which was about 35 percent in theearly seventies has more than doubled.
6. Developments were not as positive in some other areas. Inagriculture, overall output remained virtually stagnant during the 1973-83period, with the production of grains increasing probably at the same rate asthe population growth rate, but the production of root and export cropsdeclining substantially. Within a decade, Nigeria became a major foodimporter (US$2.7 billion of imports in 1982) as domestic terms of trade movedagainst agriculture. Inflation, coupled with an appreciating domesticcurrency, pushed up domestic costs of production, thus putting the commodity-producing sectors at a disadvantage vis-a-vis imports and non-traded goods.This encouraged diversion of resources from commodity production to services(including trade and construction). Both agriculture and industry became'high-cost' activities. Trade and exchange rate policies, which wereformulated in response to frequent swings in oil export earnings, were largelyused to dampen inflationary pressures or ration imports rather than to provideappropriate incentives to domestic production. This was partly due to thefact that, as a result of the fluctuations in the world oil markets and theirimpact on the balance of payments and government revenues, Nigerian policy-makers were preoccupied with short-term crisis management. This divertedattention from the formulation of longer-term policies to reduce the country'sdependence on oil and to strengthen the domestic productive sectors.
7. The Fourth Development Plan (1981-85) was prepared in 1980 when theworld oil markets presented a favorable outlook, Nigeria's oil exports for theyear amounted to US$25 billion and foreign exchange reserves exceeded $10billion. The plan, accordingly, _oflected an ambitious investment program.It envisaged a total investment program of N80 billion (US$107 billion) overthe period 1981-85, half of which was to be invested directly by the FederalGovernment and a quarter directly by the states - with the remaining quarterto be invested by the private sector. Emphasis was placed on the developmentof agriculture (through statewide agricultural support programs and massiveirrigatior schemes) and on heavy industry based on cheap energy (steel,petrochemical, etc.) both supported by substantial investments ininfrastructure. Nigeria's development plans, however, were overtaken by thesharp decline in oil export revenues since 1981. It's economic problemsduring 1981-83 -were exacerbated by the inability of Nigerian decision-makersto cut back sufficiently the public investment program partly because of acontinuing belief that oil markets (and Nigerian oil revenues) would recover.
8. Nigeria's oil production fell by one-third from its 1980 level of2.06 mbd to 1.44 mbd in 1981, and subsequently declined further to 1.23 mbd in1983. Coupled with a decline in the oil price from a peak of US$39 per barrelin 1981 to US$29.9 per barrel in 1983, oil export revenues declined from US$25billion in 1980 to US$17.4 billion in 1981 and to only US$10.3 billion in1983. Imports of goods continued to rise to a peak of US$18 billion in 1981,resulting in a current account deficit of US$6 billion, which was financedlargely through the drawing down of foreign exchange reserves and externalborrowing.
9. Confronted by a worsening balance of payments situation, theGovernment reacted in April 1982 by introducing a number of austerity measuresaimed at stabilizing the domestic and external financial situation. Thesemeasures failed to achieve the stabilization objective; imports of goods forthe year 1982 declined marginally to US$17 billion while resulting in a widercurrent account deficit of US$7.3 billion. Reserves declined further to onlyUS$1.4 billion by the end of 1982, whilst trade payment arrears of US$4billion were accumulated.
10. By 1983, however, previous measures in the form of quantitativerestrictions together with a growing reluctance of the trading partners toextend further trade credits to Nigeria led to a reduced import level ofUS$12.2 billion. This was largely finunced by further accumulation of tradepayment arrears (US$3.8 billion), a process which had already begun during1982. Discussions with major overseas creditor banks resulted in therescheduling of the arrears owed to these institutions (for confirmation ofletters of credit) of about US$2.1 billion accumulated prior to August 31,1983, with repayments to be made over a period of 31 months starting January1984. In April 1984, the C-overnment completed negotiations to rescheduleUS$4-5 billion of the remaining arrears incurred through "open-account" inter-company import financing. This agreement includes only those arrears notcovered by export credit insurance and reschedules the payments over a periodof six years including a grace period of two and half years at an interestrate of 1 percent over LIBOR. Outstanding arrears at this point are US$2billion insured by export credit agencies (ECAs). The terms under negotiationror these remaining arrears are similar although formal agreement toreschedule has been made conditional by the ECAs on Nigeria reaching anagreement with the IMF. The new military government (FMG) has so far beenregular in making repayments due on earlier medium- and long-term debt.
11. The deterioration in the external financial situation had a severeimpact on the fiscal position of the Federal and State Government as well ason growth. Federally collected revenues fell from N15.2 billion in 1980 toN12.0 billion in 1983, because oil revenues accov'nt for an average of about 60percent of total revenues. Until 1984, the Federal Government did not reduceexpenditures in line with the reduced revenues, thus large budget deficitsappeared over the period 1981-83, with the deficit/GDP ratio in excess of 8percent. In order to finance these deficits, the Government borrowed from theCentral Bank. This coupled with the physical shortages of many importedcommodities led to an acceleration in the inflation rate which rose to about23 percent in 1983. As a result of a decline in imports of about 30 percentin real terms, domestic output contracted in 1983. In addition to the declinein manufacturing, the construction sector suffered from an almost one-third
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decline in gross fixed invest-.ent. In 1983, the decline in non-oil GDP isestimated at five percent, while the GDP declined at an average rate of fivepercent per annum over the 1981-83 period.
12. The performance of the Nigerian economyr has deteriorated further in1984. With oil export revenues estimated at US$11.2 billion (i.e., estimatedoil exports of 1.04 mbd at USS29 per barrel), imports have had to be reducedfurther from 1983 levels to accommodate higher debt service payments of aboutUS$4.2 billion in 1984. So far, the FMG has tightened import controls, andadopted stringent fiscal and monetary policies. In the 1984 budget theGovernment made reductions in public expenditures in line with Bankrecommendations and, to help rationalize future investments, instituted aProject Review Committee which has reviewed projects funded under the capitalbudget. The Committee has proposed that all projects be categorized as "core'or 'non-core" with the former to receive full funding and the latter beingshelved pending availability of funds or abandoned. The recommendations ofthe Review Committee are currently being reviewed by the Government. Nigeriahad been accorded a temporary increase in oil production quota of 100,000 bpdfor August and 150,000 bpd for September, although it seems that the softeningof the oil market has prevented that quota from being realized. If Nigeriacould actuallv sell an additional 0.1 mbd, this would generate US$1.0 billionannually in additional export revenues and improve the economic outlook. Inthe medium term, real economic improvement will depend upon the adoption bythe Government of policies towards economic stabilization and the longer termgoals of structural adjustment and diversification of the economy.
Adjustment Policy Issues
13. At present, the Nigerian economy faces two cr.t'cal issues: first,the management of the short-run financial crisis and stabilization of theeconomy; and second, the longer-term structural adjlLstment of the economy bystimulating productive sectors, lessening dependence on oil, and developing awider resource base. With regard to the short tern, the measures that the FNGhas taken since January 1984 to reschedule trade arrears, control imports andrestrain domestic expenditures (which were confirmed in the budget released inJune 1984), may help to arrest a further deterioration of the external andinternal financial situation. However, the remaining external arrears need tobe rescheduled, particularly in view of the need for substantial externalborrowing in the near future.
14. While a rebound in oil revenues would help Nigeria to overcome thecurrent crisis, it will not resolve the structural issues facing theeconomy. More vigorous and consistent policies, beyond the measures taken torestore financial stability, will be needed to bring about structuralchange. The chief requirements comprise: (i) further incentives forefficient export promotion and import substitution, inc'uding appropriateexchange rate, tariff, and credit policies; (ii) complementary steps tostrengthen the balance of payments through judicious management of foreignborrowing and external reserves; (iii) continued control of aggregate demandthrough prudence in monetary, fiscal, and wage policies; (iv) improvements inthe composition and implementation of public investment to increase itsefficiency; and (v) steps, such as raising interest rates and improving taxcollection, to increase private and public savings and investment.
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Prospects and Financing of Development
15. Although Nigeria's exportable crude oil surpluses are expected to besignificantly reduced well before the turn of the century, the bulk. of itsforeign exchange resources will continue to come from the hydrocarbon sectorsduring the next twenty years. In addition to oil exports, this could includeexports of liquefied natural gas (LNG) -- although the market prospects forLNG during the 1990s are more uncertain than before -- and some exports ofpetrochemicals. To maintain economic growth, major structural changes areneeded in order to adapt the economy to lower levels of oil export earnings.In the short-run, the volume of Nigeria's oil exports is likely to bedetermined by the uncertain conditions of the world oil markets rather than bythe deliberate extraction policies of the Government. It is projected thatoil production would rise gradually to 1.6 mhd in 1987, from its estimatedlevel of 1.3 mbd in 1984.
16. The prospects for the Nigerian economy over the medium term areclosely related to the kind of economic policies the Government pursues overthe next few years. One option open to the Government is to pursue a 'highgrowth/economic reform" 3trategy comprising policy measures which have beendiscussed in the context of a possible Extended Fund Facility (EFF) with theIMF and a Structural Adjustment Loan (SAL) from the Bank. Such a strategywould also give Nigeria renewed access to international borrowing fromcommercial banks, although the amounts that would be available are difficultto quantify. On the estimation that about US$2-3 billion per year ofinternational lending would be available from all sources, this would permit amoderately high growth rate of about 4 percent per annum over the period 1984-1992. It would prevent a further deterioration in the average standard ofliving and allow employment to expand broadly at the same pace as populationgrowth. In addition, it would, over time, stimulate non-oil exports, which,in the longer run will need to replace oil as the engine of import growth. Inthe "low" case, on the other hand, no agreement is reached on the EFF/SALpackage, and the only "reform" that takes place is maintaining enough macro-economic discipline to avoid the reemergence of trade arrears as a majorproblem. In this "low"" case, the possibility of foreign borrowing would bevery limited and balance of payments constraints would necessitate checontinuation of restrictive policies. The result would be lower growth ratesfor the rest of the decade leading to a further deterioration of the averagestandard of living, low capacity utilization rates in many sectors andincreasingly severe unemployment problems.
17. At present the Government is pursuing an intermediate strategy. Inaddition to the adjustments in the investment program mentioned above (para.12), the Goverrment has recently introduced new schedules of customs andexcise duties that move in the direction of equalizing effective protectionacross industries. Measures to streamline public sector employment haveresulted in a reduction of some 55,000 employees; and a freeze on publicsector salaries and wages hc.s also been introduced. Together these measuresare expected to result in a reduction of the Federal budget deficit from about15 percent of GDP in 1983 to about 11 percent in 1984. The new Government hasalso enforced much greater financial discipline on State Governments which hasresulted in greater revenue raising efforts by the states together with
improved focus on development priorities. Tighter monetary policies including
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increases of 1.5 to 2 percent in interert rates have also been introduced.With this good progress on fiscal retorm, but little progress on incentivereform, growth would be higher than in the low case, b:c would result at bestin a stagnation of per capita incomes.
18. The thrce policy scenarios differ more from each other in theirimpact on growth than in their impa( on Nigeria's ability to service externaldebt. This is because in the low ana intermediate cases, lack of confidenceon the part of commercial lenders would mean severely limited access tointernational borrowing. Of course, if the moderate fiscal discipline assumedeven in the low case is not maintained, there would be pressure on imports andan eventual risk of a build-up of trade arrears with a resultant furtherdecline in access to external credits. At the present time, though, this doesnot appear a likely possibility, given the Government's firm commitment toausterity. In all the cases there will be severe liquidity problems over thenext few years with the debt service ratio likely to range from 32 to 39percent between 1985 and 1987. In all the cases also, the debt service ratiobegins to decline after 1987. The decline is somewhat slower--although stillmarked--in the high case, because with better growth policies, access tointernational borrowing is higher. In the high case, the debt service ratioin 1992 would be 22 percent, while in the intermediate and low cases it wouldbe about 10 percent. The volume and composition of Bank lending would bedetermined by the policies pursued by the Government -- ranging from anexpanded lending program including a Structural Adjustment Loan in the highcase to a limited program focussing primarily on social and physicalinfrastructure in the low case.
PART II - BANK GROUP OPERATIONS IN NIGERIA
19. Bank and IDA lending to Nigeria as of September 30, 1984, amounted toUS$2,514.4 million (net of cancellations). The amount of loans and creditsdisbursed as of September 30, 1984 was US$1,338.5 million, leaving anundisbursed balance of US$1,175.9 million. Agriculture accounts for about50 percent of total commitments; transport, power, and water supply togetherfor about 34 percent; and education, industry, urban, and the post-war reha-bilitation loan for the remaining 16 per-ent. There have been only two IDAcredits to Nigeria, for US$35.3 millifon; both are fully disbursed. IFC hasmade six loans to borrowers totalling USS24.7 million, and six equityinvestments totalling US$4.6 million. Of these amounts, US$7.5 million havebeen repaid, terminated, cancelled, or sold. Annex II contains a summarystatement of Bank loans, IDA credits, and IFC investments.
20. As a restult of the abrupt decline in earnings from oil, public reve-nues have fallen sharply, causing many of the ongoing projects to run intoserious counterpart funding probloms. The Bank, the Federal Government, andthe relevant state governments are making concerted efforts to alleviate thesituation. The Bank, under the Special Action Program, has agreed to thereallocation of loan proceeds and the upward revision of disbursementpercentages to speed up disbursements. Working within the resourceconstraints (which are likely to continue in che near future), the FederalGovernment is Lupplementing the funding fcr selected projects for 1984 and has
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agreed to ensure that adequate funding will be provided for projects for 1985on the basis of updated estimates of funding requirements. The Stategovernments are instilling a greater degree of discipline in their budgetingprocesses and cutting back on new capital expenditures in order to fundexisting obligations. As a result, the prospects for counterpart funding forBank-assisted projects are expected to improve.
21. Provided appropriate policy changes are undertaken, the Bank'slending program would aim primarily at the urgenit diversification of Nigeria'seconomy to reduce its excessive dependence upon petroleum as a source offoreign exchange and fiscal revenue. At the same time, the Bank would con-tinue to support efforts to raise the productivity of the lowest income groupsand thereby diminish the incidence of absolute poverty in Nigeria. As inrecent years, the Bank would continue to provide support for agriculture andrural development with emphasis on institution-building and transfer oftechnology. These objectives are in line with the Federal Government'spriorities and with the emphasis it is placing on the need to use the proceedsof the country's oil revenues to increase the productive capacity of theeconomy, and thereby raise the standard of living of its population,particularly the rural poor. The Bank would similarly support efforts tostimulate a well-balanced and integrated development of Nigeria's industrialsector. This approach would entail a combination of intensive sector work andpolicy dialogue with the Government, as well as Bank assistance for industrialprojects in crucial subsectors.
22. Projects in the agriculture, water supply and urban sectors togethershould account for a large share of Bank lending in the coming two to threeyears. Effective support for the commodity producing sectors will alsorequire strategic investment in production-related infrastructure. There aregood opportunities for the Bank to make a significant contributiGn in energyand highway maintenance. Similarly, there is a strong case for continuedlending for education. In this context, vocational, technical, and teachertraining would be given special emphasis. Finally, the Bank would support thefederal and state governments' efforts to spread the benefits of growth to thesocial sectors. It is envisaged that some of the pressing problems of rapidurbanization will continue to be addressed through a number of urbandevelopment projects focussed on the needs of the urban poor. The Bank isalso assisting the Government in overcoming the country's health problems witha project aimed at both federal and state (Sokoto) levels, and is continuing adialogue with the Government on population issues, perhaps leading to lendingin this area.
23. Although annual disbursements have increased from US$52 million inFY1978 to nearly US$272 million in FY1984, Nigeria's disbursement performancehas lagged behind that of other countries in the region. The undisbursedbalance now stands at 47 percent of the US$2.5 billion in loans and creditsapproved. One of the reasons for this development is the rapid expansion ofthe Bank's loan portfolio since 1979 as well as the fact that a number oflarge loans, with relatively large, planned disbursements during the earlyyears, were extended during this period, mainly for agricultural projects. Inmany cases, however, disbursements have been slowed by long delays in loaneffectiveness and institutional and management problems. Recently, theinadequate counterpart funding of projects by federal and state governments,
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resulting from lower oil revenues, has further slowed disbursements. The FMG,with the assistance of the Bank's Resident Mission, is now carefullymonitoring loan disbursements with a view to identifying problems early andtaking corrective action. Also, the Bank has recently agreed to a series ofmeasures aimed at accelerating disbursements under both ongoing and newprojects (para. 20). These efforts are beginning to show results.
PART III - ECONOMIC PLANNING AND FINANCIAL ADMINISTRATION IN NIGERIA
The Institutional Framework
24. The FMG suspended the 1979 constitution introduced four and a halfyears earlier by the previous military government of General Obasanjo.However, the emphasis has been continued on a separation of powers between thevarious branches of government, as well as a balanced distribution ofresponsibilities between federal and state authorities. In matters ofeconomic management, the previous federal government reestablished many of itstraditional functions including exclusive control over monetary affairs aswell as trade and payments. These controls have, if anything, become morecentralized under the FMG. Of particular importance in this respect is thefederal authorities' responsibility for policies that govern the productionand export of oil and gas.
25. The administ-3tive organization of the Government has undergone anumber of changes in the past 11 months. The number of ministries at both thefederal and state levels has been reduced, and the National Planning Ministryreinstated. The functions of budget formulation and implementation havereverted back to the Federal Ministry of Finance, previously being a specialBudget Office attached to the presidency.
26. While the FME has strived to reestablish simpler and more familiaradministrative structures, some of the earlier constitutional developmentsappear irreversible. This applies particularly to the shift in the balance ofpower back to the federal authorities from the states.
27. The 1979 constitution significantly changed the relationship betweenstate and federal authorities because the state governments became more be-holden to local constituencies. Under the revenue sharing formula prevailingsince the civilian administration, 35 percent of total fiscal revenuesaccruing to the Federation Account (excluding independent revenues of theFederal Government) are passed on to the state governments which have completediscretion in the management of those funds. A further 10 percent of allfederal revenues are passed on to local government authorities.
28. While the 19 state governments have been zealous in the preservationof their fiscal independence, mechanisms have been in place for policycoordination. One of the first acts of the FMG was co establish a NationalCouncil of State that includes all 19 military state governors. Furthermore,the effective economic independence of the states is tempered by the fact thattheir revenues generally fall short of what is needed to finance the services
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for which they are constitutionally responsible (including primary andsecondary education, health, water supply, housing, urban development andagriculture). In the recent past, most states sought to borrow to financetheir ambitious development plans. To the extent that they borrow fromdomestic sources they must do so with Federal Government approval and withinthe framework of monetary and credit policies determined by the CentralBank. To the extent that they borrow externally, they need a FederalGovernment guarantee. States have been further constrained by the 1984federal budget that restricted their access to foreign borrowings.
29. These constraints upon the state governments illustrate the prominentrole of the federal government, mainly by being custodian of rhe substantialfiscal revenues derived from petroleum exports. As a measure of thatprominence it may be noted that the combined direct current and capitalexpenditures of the Federal Government have amounted to between 25 and 30percent of GDP in recent years. Total fiscal revenues of the FederalGovernment increased almost sixfold in real terms from N2.6 billion in 1973 toN12.0 billion in 1983. The management of so large a fiscal program has placedan increasing burden upon the limited manpower and administrative resources ofthe Federal Government. Furthermore, the difficulty of economic management inNigeria is not to be measured by the size of the fiscal program alone. Acomplicating factor has been the sharp fluctuation of petroleum revenues overthe years which has placed additional demands upon the administration.
The Structure of Economic and Financial Management
30. The basic configuration of the Nigerian public service has remainedsubstantially unchanged since independence. The staff of each ministry isorganized under a permanent secretary who, along with senior administrativeand professional officers, offers advice to the minister on policy matters andmanages the day-to-day business of the ministry. The minister is thepolitically-appointed executive head of the ministry but has no authority oversuch matters as the appointment, promotion and discipline of civil servants.Appointments are the responsibility of the Federal Civil Service Commission,members of which are themselves appointed by the Head of State, while assign-ments, reassignments, promotion and discipline are matters for the Head of theCivil Service and the relevant heads of departments. There is a graveshortage of managerial, professional and technical staff in the governmentservice, a problem compounded by the rapid rotation of staff betweenministries, that can be detrimental to the continuity of the service.Permanent secretaries, while drawn from the ranks of the civil service, areappointed by the head of state and usually have a more stable tenure ofoffice, at least in the economic ministries.
31. A schematic diagram of the organizational structure that manages theexternal and internal finances of the Federal Government is presented in AnnexIV. The two ministries with primary responsibility for planning and financialcontrol are the Federal Ministry of National Planning (FMNP) and the FederalMinistry of Finance (FMF). The functions of the FMF extend beyond purelyfiscal matters because it is responsible for the supervision Lf the CentralBank of Nigeria, and a number of functions such as exchange control andexternal debt monitoring are shared between the two entities. The FMF is also
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responsible for the formulation and execution of the federal budget so thatthe breadth of its responsibilities is very extensive.
32. Coordination between the FMF and the FMNP is effected at the policylevel by the Federal Executive Council and at the management level by keyinterministerial committees that advise the Government on issues of economicpolicy.
33. The effectiveness with which these committees can do their job,however, is limited by weaknesses in policy analysis that stem in part from alack of sufficient professional staff to undertake the analysis and in partfrom a lack of sufficient data on which to base the analysis. There is anurgent need to upgrade the whole statistical system both with respect to thestandard time series of production, consumption, prices and trade as well asindicators that would permit the Government to monitor plan implementation,budget performance and foreign exchange requirements. The proposed projectwould address these needs.
34. The Federal Ministry of Finance is organized along functional linesas indicated 3chematically in Annex V. By far the largest department - withmore than 3,000 employees, including a sizeable force of border police - isCustoms and Excise. The import duties collected by this department accountfor some 40 percent of the federal government non-petroleum revenues, andtaxes on domestic production and consumption for a further 30 percent. Anoteworthy feature of the Customs and Excise Department is that it has a well-run data processing unit which may be one of the most efficient in the publicsector.
35. The second largest department within the FMF is Inland Revenue whichcollects, in ascendIng order of importance from the point of view of revenuegenerated, personal income tax on the salaries of public servants, stampduties, corporation income tax and the petroleum profits tax. Royalties anddividends from pet:oleum are collected on behalf of the Government by theNigerian National Petroleum Company while the taxation of incomes of privateindividuals is a state res2onsibility. In the course of preparing theproposed project, the Bank was approached by the Inland Revenue Departmentwith a request for assistance in improving its systr- of data management andits program of staff training. Because the request touched upon many broaderaspects of tax administration, Bank staff referred it to the IMF which hasmore specialized expertise in this field. The IMF has reviewed the InlandRevenue Department's existing data systems and staffing, and maderecommendations to the Government on now they might be improved. In light ofthese recommendations the Government decided to appoint consultants to designits equipment and related staff training needs. Once the equipment andancillary training requirements of the program have been defined, there may bea role for the Bank in financing the acquisition of data processing equipmentfrom the proceeds of the proposed loan.
36. The External Finance Department of FMF is well known to the Bankbecause it is the Bank's administrative point of contact with the FederalGovernment. The Multilateral Division of this Department devotes most of itstime to handling lcer- from the Bank because Nigeria's operational contacts
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with other multilazeral donors are few. The Bilateral Division has a muchsmaller overall program but the Capital Markets Division has been quite activein arranging syndicated loans and in extend'ng the Government's guarantee,where appropriate, to loans secured by state governments and other publicsector entities. For many years the External Finance Department hasexperienced difficulties in reporting its debt position to the Bank and to thepolicymakers in Nigeria promptly and fully. When the balance of paymentssituation deteriorated after 1981, Government efforts to reschedule Nigeria'scommercial arrears and seek further fin-ncial support from the internationalfinancial community were impaired to some extent by a lack of accurateinformation regarding its overall external indebtedness. Consultants wereretained to advise and assist the Government in dealing with its externalcreditors and, as part of their job, they put together a detailed picture ofthe overall debt situation including short-term debt. This experience hasheightened Government awareness of the need for a system that will con-tinuously monitor the external debt situation so that external borrowingstrategies may be appropriately adapted to changing circumstances. Theproposed loan would respond to that need.
37. The Exchange Control Department of the FMF has a small senior staffthat numbers less than twenty. In addition to having the primary responsi-bility for preparing a foreign exchange budget, this Department shares withthe Central Bank a part of the administrative responsibility for authorizingforeign exchange remittances. Payments relating to merchandise trade ingeneral are authorized by the Central Bank with some delegation of authorityto the commercial banks for small items. Requests for foreign exchange thatemanate from public sector entities are reviewed by the Exchange ControlDepartment of the FMF as part of the overall financial control of the publicsector. In addition, that same Department authorizes the payment of dividendsto non-resideuts, the external remittances of consultancy firms and theamortization of all external debt. By virtue of this last function it is animportant source of primary data on external debt - information that wouldneed to be integrated into a fully functional system for external debtmonitoring.
38. In terms of the sheer volume of work, the Central Bank is the prin-cipal processor of information on exchange control because it handles the bulkof merchandise trade. In terms of policy significance, however, the ExchangeControl Department of the FMF has a prominent role to play because it isformally responsible for the preparation and execution of an annual foreignexchange budget for consideration by the Government as part of the overallbudget exercise. During preparation of the proposed project, the FMF askedthe Bank for assistance in strengthening the management of exchange controldata in order that foreign exch2age budgeting and control may rest on a firmerfoundation. However, since this is another field in which the IMF has anesrablished expertise we proposed that the IMF take the lead in responding tothis request. During the 1984 Annual Meetings, it was agreed between the IMFand the Federal Government that the Federal Government would reassess itsneeds in this area before requesting assistance from the IMF.
39. Other departments of the FMF are Rome Finance, which concerns itselfmainly with the establishment of banks and the fiscal interface between the
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Federal Government and the states, and the Research and Revenue Departmentwhich, inter alia, administers duty exemptions for approved imports. It hasrequested the Bank for assistance in establishing a stronger research functionespecially with respect to taxation and the projection of tax revenues.However, before technical assistance in this field may be effectivelydelivered, the Department would need to assemble and retain a core staff ofresearch personnel. At present less than 30 percent of authorized positionsof this Department are filled. If the staffing situation improves, it may bepossible to finance technical assistance from the proposed loan.
40. The Budget Department was reintegrated back into the FMF after theFMG assumed power on December 31, 19E_. There are currently operationaldivisions concerned with revenue, capital expenditure and recurrent expendi-ture, respectively (An.iex VI).
41. Under the civilian administration plans were announced to introduce asystem of program performance budgeting at the federal level. Approaches weremade to the UNDP and to the Bank with a request for technical assistance insupport of the endeavor. The UNDP will soon field three experts to assistprimarily with the accounting aspects of budget management. The proposedproject will complement the UNDP program by assisting the Government to linkthe budgetary process to the national development plan.
42. The principal constraint facing the Budget Department in fulfillingits mandate is undoubtedly a shortage of experienced professional staff. Thetotal professional payroll of the Department amounts to less than 30officers. This is clearly insufficient to handle a federal budget whichamounted to the equivalent of over US$10 billion even in 1983 -- a year ofreiatively low fiscal revenues. The recruitment and training of more staff isa matter of high priority.
43. The Federal Ministry of National Planning has organized its economicplanning function into four sectoral departments and a macro-economic depart-ment; other functions of the FMNP are also indicated in the organization chartin Annex VII. The responsibility for manpower planning rests with theNational Manpower Board which is a department of the FMNP as is the FederalOffice of Statistics. The Development Aid Department under the Ministry isthe channel through whi-h bilateral technical assistance is organized, whilethe UNDP program of development assistance to Nigeria is handled by theEconomic Affairs Department.
44. The principal instrument of planning in Nigeria is a five yeardevelopment plan that is prepared by the FMNP. The plan includes a projectlist which defines the scope of the public sector investment program over afive year period. If, in the course of plan implementation, any public entitywishes to undertake a project that is not included in the plan, it must firstsubmit project details to the FMNP for consideration and recommendation to theGovernment for approval.
45. The FMNP is responsible for preparing annual reports on the progressof plan implementation for the information of the Government. In practice,however, these progress reports have been issued much less frequently because
- 13 -
it has proved difficult to obtain and assemble comprehensive and up-to-dateinformation from the many project implementing agencies of the publicsector. Annual progress reports on plan implementation would be a necessaryfirst step towards a more effective linkage between the plan and the federalbudget. At present that linkage is quite loose because the plan has a fiveyear horizon while the budget is an annual exercise. Plan monitoring has,therefore, a key role to play in improving the implementation of the plan.The proposed project would address this issue.
46. The Federal Office of Statistics (FOS), although a department of theFMNP, is much larger than the rest of the Ministry put together. Annex VIIshows that, in addition to a headquarters staff that is organized into sixdivisions, the FOS has offices in each of the 19 states of the federation andrepresentatives in all ministries of the Federal Government. In all, itspayroll numbers about 5,000.
47. The FOS has become a focus of public attention in the last few yearsas a result of increasing awareness that the statistical information availableboth to the public at large and to the Government is inadequate for purposes-o policy evaluation. Delays in the publication of all statistical serieshave been on the increase. In the case of trade statistics there is a backlogof several years still to be processed. So great has been .Lle concern of theGovernment to upgrade the quality and timeliness of statistical informationthat the former President established a special task force to make recommenda-tions for an urgent solution to the problem. At the invitation of the Govern-ment, the Bank collaborated with the task force in proposing an interiminformation system that could be used as a basis for economic decision-making. However, this proposal for interim action did not address the morefundamental problems of the FOS which are organizational and managerial incharacter. Data processing is one of those fundamental problems. Thecomputer that was used in earlier years became non-functional with age andinadequate servicing. Another computer was acquired in 1981 but is not yetfully operational. A new data proce- ing team needs to be reconstitutedbefore the new computer can be fully utilized. At the same time, otheraspacis of the FOS operations such as system analysis and survey design needstrengthening. The proposed project would address these needs.
PART IV - THE PROJECT -
48. The ptssibility of a loan to finance technical assistance to theFMF and the FMNP was first discussed in 1981. Project preparation proceededslowly because of Goverrment caution in accepting technical assistance forministries that lie so close to the heart of economic decision-making.Project appraisal was completed in December 1983, and negotiations were heldin Washington in April 1984. Supplementary project data are provided inAnnex III.
Project Objectives and Bank Role
49. The proposed project would strengthen the basis of economic decision-
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making by helping the Government to improve the quality and reliability of itsmanager*ent information system. To this end, the statistical system would beupgraded and methods introduced to moc'tor the progress of public sectoractivities, particularly in the fields of plan implementation and externaldebt management. Training would be furnished to strengthen management andtechnical skills in related areas.
50. The Bank, by virtue of the close working relationship developed withgovernment over the past several years, is well placed to assist with atechnical assistance project of this nature. Traditionally Nigeria has beenreluctant to accept technical assistance because of a concern that it maycompromise its own independence of action. This applies, in particular, tothe FMF and FMNP which lie close to the center of economic decision-making.That the Government is prepared to accept technical assistance in theseministries is an indication of the confidence in the Bank that has built upover the years.
Project Description
51. The project would consist of six components as follows:
i) Assistance to strengthen the operations of the FOS through theprovision of consultancy services, data processing equipment andstaff training.
(ii) Establishment of a system for monitoring external debt in the FMFthrough the provision of consulting services, equipment and stafft raining.
(iii) Assistance to the FMZP for monitoring the execution of the nationaldevelopment plan including the provision of consultancy services,equipment and staff training.
(iv) Assistance for the preparation of the Fifth National DevelopmentPlan.
(v) Assistance to the FMNP to improve the training of planners throughthe provision of consultancy services and staff training.
(vi) Assistance to the Budget Department, through consultancy services andstaff training, to help establish a system within the annual budgetcycle for allocating fiscal resources in accordance with establishedproject priorities.
Each of these six components 's described below in greater detail.
Assistance to the Federal Office of Statistics
52. Undoubtedly the most urgent task facing the FOS is to reestablish anoperational computer center. Under the proposed project, 72 man-months ofdata processing consultancy would be provided to assist with this task.Provision would also be made for the acquisition of additional data processing
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and data entry equipment to complement the computer thatt was purchased by theFOS in 1981. As it stands, that computer has insufficient input terminals andlacks the minimal back-up capacity needed for an operationally effectiveunit. The cost of procuring and installing additional equipment is estimatedat US$750,000. Due consideration would be given to designing a hardwiareconfiguration that would reflect an appropriate balance between mainframe,mini- and micro-computers, given the difficult servicing environment thatprevails in Lagos and the problems of keeping large and technologicallycomplex machines fully operational. The project would also provide forimproved housing for the computer and ancillary equipment.
53. The reestablishment of a fully operational computer center wouldexpand the overall productive pctential of the FOS. To assist the FOSmanagement gear its operations to a higher level of activity, the projectwould furnish 96 man-months of long-term consultancy services in statisticalmethods, economic statistics and overall statistical management. A further 20man-months of supplementary short-term consultancies are also included in theproject to cover specialized fields, including agricultural statistics,national accounting, industrial statistics and indexes.
54. The FOS has engaged the US Bureau of Census, an organization whichhas furnished it with training and ad hoc consultancy services from time totime over the past twenty years, to undertake this consulting work as a singlepackage at cost price. Terms of reference for these consultancy services,which have been reviewed and agreed by the Bank, are given in Annex VIII,pages 1-6.
External Debt F.onitoring
55. Recently, the difficulties experienced by Nigeria in servicing itsshort-term debt have become a focus of international attention. A majorimpediment to the resolution of this problem has been the difficult task ofdocumenting precisely the nature and volume of the arrears. The Nigerianauthorities have engaged consultants to assist them with this task. In thelonger-run, however, there is clearly a need for establishing a system thatwill monitor short-term debt on a continuing basis. The IMF has offered tohelp the Goveranent establish such a system and Government is currentlyconsidering whether or not to make a formal request for assistance.
56. Thus far, Nigeria has serviced its medium- and long-term debtpromptly. Nevertheless, it is now clear that the Covernment also needs toinstall a capability for monitoring such debt so as to provide a better basisof information for economic management. At present there is no separate unitwithin the External Finance Department which is explicitly charged withmonitoring the external debt situation. From time to time, ad hoc exerciseshave been undertaken to determine the external debt profile -- frequently withassistance from the Bank or from consultants. The proposed project would, forthe first time, set up a continuous debt monitoring function that wouldencompass, in the first instance, public and publicly guaranteed medium- andlong-term debt and would be expanded subsequently to cover private debt.Agreement was reached at negotiations that, as a condition of disbursement ofthis component, the FMF would establish a separate debt monitoring division
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within the External Finance Department and appoint a division head supportedby adequate staff (Section 3.01(d) and Schedule 1, para. 3(b) of the LoanAgreement).
57. In order that an external debt monitoring system may be establishedand made operatiountl, 24 ma_-months of consultancy services would be providedunder the projecL. The bulk of this technical assistance would consist of anin-house advisor to the External Finance Department who would assist theproposed debt monitoring division of the FMF to design and implement thesystem over a two-year period. Six man-months of supplementary consultancy ondata processing is included within the 24 man-month total. The proposed termsof reference are provided in Annex VIII, pages 7-8. Although Bank-financedsupport for medium- and long-term external debt monitoring would be centeredon the FMF, there would be close coordination with Central Bank monitoring onNigeria's short-term debt.
58. A fully-fledged debt monitoring system would need to be based onelectronic data processing. Provision has been made under the proposedproject for the acquisition and installation of a mini-computer and ancillaryequipment at an estimated cost of US$100,000. Due consideration would begiven to the use of micro-computers as an alternative technology that may beless vulnerable to problems of inadequate servicing and therefore more reli-able. The project would also provide for the training of staff both locallyand overseas. In addilion, the Bank's External Debt Division would help trainstaff who could benefit from in-house training in the Bank.
Plan Monitoring
59. The I'MNP has no special unit or group of staff assigned to monitorplan implementation. The task is handled by the staff of the macro and sectordepartments in the following manner. Letters are issued to all federalgovernment ministries and to the planning ministries of each state requiringthem to solicit from the parastatals, project executing departments and otherline agencies within their jurisdiction, information on project progressaccording to a specified format. The federal government ministries and stateplanning ministries collate and process replies from all corresponding lineagencies before submitting them as a package to the FMNP. Subsequently, thesector departments of the FMNP analyze the submissions and relate them to thetargets of the original plan document under the overall coordination of theMacro Department of the FMNP.
60. The annual monitoring of plan implementation in a timely and compre-hensive manner would require the establishment of a small, permanent unitwithin the FMNP devoted exclusively to that task. Accordingly, agreement wasreached at negotiations that the FMNP would establish a plan monitoring unitand appoint a chief of the unit as a condition of disbursement of thiscomponent (Section 3.01(e) and Schedule 1, para. 3(c) of the LoanAgreement). It is also expected that an appropriate understanding would bereached between the FMNP, the Budget Department and other federal entitiescharged with monitoring responsibilities for the coordination of theirrespective monitoring efforts. The project would provide for 24 man-months oftechnical assistance to the unit in designing and implementing a system of
- 17 -
plan monitoring. The proposed terms of reference are provided in Annex VIII,pages 9-10. The project would also provide for the acquisition of a mini-computer and ancillary equipment in the event that existing micro-computerswithin the FMNP are inadequate for the task. To assist with the installationof data processing facilities and bringing them into operation, six man-monthsof specialized consultant services would be provided. Provision would also bemade for staff training, both local and overseas.
Strengthening Planning Capacity for the Fifth Five Year Plan (1986-90)
61. The FNNP has started the programming process for the next Five YearPlan (1986-90), including collaboration with sectoral ministries and stategovernments in the preparation cf investment programs for this period. Giventhe complexities of the present Nigerian economic situation - both on themacro-economic and sectoral fronts -- a great deal of detailed and specializedwork will be required. This will be undertaken largely in the FNNP and thesectoral ministries themselves. The project proposes to strengthen thecapabilities of the FMNP by providing 30 man-months of specialized consultancyservices for both the macro-economic and sectoral work related to thepreparation of the next Five Year Plan. As in the case of other consultancyservices to be engaged for this project, suitably qualified Nigerianconsultants would be recruited wherever possible.
The Training of Planners
62. The association of the Bank with proposals for the training ofplanners goes back a number of years. In 1975, the EDI collaborated indeveloping an initial project proposal for establishing a National PlanningInstitute at the request of the FMNP. That first proposal envisaged drawingupon the international experience of the EDI to establish a slmilar kind ofinstitution at the national level in Nigeria. Training was to be offered toplanners and managers in ministries, autonomous agencies in the public sectorand even private entities where there was a perceived need to enhance planningand management skills.
63. In the present context of severe fiscal and balance of paymentsconstraints, the need for strengthening planning and management skills appearsgreater than ever. Under the proposed project, a qualified and experiencedperson would be appointed by June 30, 1985, to plan, organize and coordinatethe training of planners (Section 3.01(f) of the Loan Agreement). Inaddition, a working group would be set up within the FNNP to assess trainingneeds and to set up on a pilot basis, planning courses that would addressthose needs that are not adequately served by existing training facilities.To assist with this task, 8 man-months of consultancy services would beprovided under the project. The consultants would also make recommendationsregarding an appropriate institutional framework for strengthening thetraining of planners and to that end would give due consideration to adaptingor expanding the facilities of such existing institutions as theAdministrative Staff College of Nigeria or Nigerian universities. Terms ofreference for this consultancy are provided in Annex VIII, page 11.
64. The proposals for the establishment of new training facilities arenecessarily geared towards the longer term. Gi-en the pressing and immediate
- 18 -
needs for training in macro-economic management and sectoral planning, fundswould be provided from the proceeds of the Bank loan to finance local andoverseas training in these areas and also for the training of trainers. Thistraining would be geared principally to the staff of the FMNP and the FMF, butcould also include some staff of the sectoral ministries. The local componentof the training would be undertaken jointly by local institutions andconsultants. The overseas training would take the form of short courses orfellowships specifically gearad to macro-economic management and sectoralplanning. Consultancy servi:es would be engaged to identify training needsand Lecoumend appropriate training programs.
Information Systems for Budget Formulation and Executior.
65. The ability of the Government to address the difficult financialsituation confronting it will depend in large measure upon the effectivenessof its fiscal management. The Budget Department plays a central role in thatmanagement function. However, the instruments of fiscal control at itsdisposal need strengthening in order that it may fulfill its responsibilitiesmore effectively. If the recently launched UNDP technical assistance projectis successful in improving the timeliness and accuracy of financial accountingthat will help greatly. In itself, however, the UNDP program will not besufficient because the economic evaluation of program and project progressgoes beyond financial accounting to the monitoring of physical progress and anassessment of the alternative uses of disposable resources.
66. The proposed project component would provide for 30 man-months ofconsultancy services to the Budget Department in matters of program andproject analysis with a view to linking the budgetary process more closely tothe national development plan. These consultants would liaise closely with aworking group that would be appointed within the Budget Department to overseethe introduction of closer links with the development plan. There is clearlyan interface between this project component and the component that relates toplan monitoring. Terms of reference for the consultants are provided in AnnexVIII, page 12 and they include arrangements for coordination.
67. This component would also finance, retroactively, consultants whohave helped to evaluate all major ongoing projects at the federal level: ithas done this by helping the Government's Project Review Committee to evaluateits 1984 capital budget and to establish investment priorities as a guidelinefor structuring the 1985 budget.
68. While the proposed technical assistance team would work with thePlanning Committee composed of the Permanent Secretaries of the FMF and theFMNP, and the Governor of the Central Bank, it is proposed that this componentbe attached to the Budget Department. Terms of reference for this continued^onsultancy support are provided in Annex VIII, page 13.
ProJect Implementation
69. The six ±dentified components of the proposed project would beimplemented by the FMF, the FMNP and the FOS, in accordance with theimplementation schedule shown in Annex IX. It is anticipated that, as theproject progresses, existing project components would be expanded, and new
- 19 -
zomponents may be identified and financed from the unallocated portion of theloan. Allowing for these, the total implementation period is expected toextend over five years.
70. To provide a focal point for liaison with the Bank and for coor-dination between the several agencies and ministries involved in the project,agreement was reached at negotiations that a project coordinator with tenms ofreference satisfactory to the Bank would be designated within the FMF. Desig-nation of the project coordinator would be a condition of loan effectiveness(Section 5.01 of the Loan Agreement). In addition, the FMNP and the FOS wouldeach designate a project liaison officer no later than June 30, 1985, toliaise with the project coordinator on the project (Section 3.01(c) of theLoan Agi'eement). Understandings were also reached that the detailed terms ofreference 'or consultants would include explicit work schedules to facilitatemonitoring, and that all training and fellowship programs would be drawn up byJune 30, 1985.
71. During negotiations, the desirability of utilizing the services ofthe UNDP Office of Project Execution (OPE) was discussed for the followingtasks: arrangements for administering overseas training programs, theprocurement of equipment, recruitment of individually recruited consultantsand the servicing of their contracts. This would satisfy the conditions ofSeetion 3.02(d) of the Loan Agreement. The Nigerian delegation indicated thatthey would seriously consider the use of OPE for this purpose.
Project Costs
72. Total project costs including the front-end fee are estimated atUS$17.0 million, of which the foreign exchange component would amount toUS$9.0 million or 53 percent. A breakdown of costs by major categories isgiven in the accompanying table. It is an inherent characteristic oftechnical assistance that, as project implementation progresses, both the Bankand the borrower perceive a role for additional technical assistance in areaswhere the need has not been appreciated at first. Experience with this kindof project has shown the value of having a pool of unallocated funds.Accordingly, an amount of USS2.9 million has been included to financeactivities as yet uridentified. These funds will be used following agreementbetween the Bank and the Government, either to amplify existing components ofthe project or to introduce new components consistent with the overallobjectives of the project. These activities may include tasks such asassistance to the FMNP for mid-plan review, follow-up work on an annual reviewof capital expenditure budgets, studies for the establishment of a FederationStabilization Fund, adopting multi-year budgeting procedures and the like.
73. An allowance has been made for physical contingencies equal to 5percent of base costs for all items. Price contingencies for local costs areestimated at 20 percent in 1985, 17 percent in 1986, 17 percent in 1987, 15percent in 1988, and 15 percent in 1989. Price contingencies for foreigncosts are estimated at 8 percent in 1985, 9 percent in 1986, 9 percent in1987, 9 percent in 1988, and 8 percent in 1989. On this basis, totalcontingencies amount to 27 percent of base costs.
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Project Cost
Local Foreign Total---- USS Million- -
Federal Office of Statistics
188 Man-months of Consultancy Services 1.22 2.54 3.76Equipment and Software 0.10 0.75 0.85Training and Fellowships 0.15 0.45 0.60
FMF (External Debt)
24 Man-months of Consultancy Services 0.16 0.32 0.48Equipment and Software - 0.10 0.10Training and Fellowships 0.05 0.15 0.20
FMNP (Plan Monitoring)
30 Man-months of Consultancy Services 0.20 0.40 0.60Equipment and Software - 0.10 0.10Training and Fellowships 0.05 0.15 0.20
FMNP (Plan Preparation)
30 Man-months of Consultancy Services 0.20 0.40 0.60
FMNP (Training of Planners)
8 Man-months of Consultancy Services 0.05 0.11 0.16Training and Fellowshipe 0.07 0.23 0.30
FMF (Budget Depart2-ent)
30 Man-months of Consultancy Services 0.20 0.40 0.60Equipment and Software 0.07 0.23 0.30Training and Fellowships - 0.10 0.10
Counterpart Support
(Local Staff, Office Accommodation, etc.) 1.55 - 1.55
Subtotal: 4.07 6.43 10.50
Unidentified Activities 1.17 1.73 2.90
Total Base Costs: 5.24 8.16 13.40
Physical Contingencies 0.03 0.04 0.07Price Contingencies 2.70 0.80 3.50
Front-end Fee - 0.03 0-03
Total financing required: 7.97 9.03 17.00
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Project Financing
74. The proposed loan of US$13 million would cover 76 percent of totalfinancing requirewents Including the capitalized front-end fee. This level ofcost sharing is not uncommon with projects of this kind. The remainingproject cost to be financed by the FMG would correspond to the cost of localcounterpart support and the local costs of consultant services other thanhousing.
Procurement
75. Data processing eqaipment and associated software would be procuredthrough limited international bidding, in accordance with Bank guidelines. toensure compatibility with exioting equipment and satisfactory after-salesservice. Contracts for goods which cannot be grouped into lots costing morethan US$50,000 equivalent (up to a cumulative total of US$1 million,equivalent) may be awarded under local competitive bidding proceduressatisfactory to the Bank. Minor items costing US$10,000 equivalent or lessmay be procured by local shopping (up to a cumulative total of US$300,000,equivalent). The services of consultants valued at US$6.2 million would beobtained in accordance with Bank guidelines and on terms and conditionssatisfactory to the Bank.
Disbursements
76. The proposed loan would be disbursed as follows: internationallyrecruited consultants: 100 percent; external training and fellowships: 100percent; and data processing equipment and its installation, software andtraining equipment: 100 percent. The loan would be disbursed over a periodof six years, as compared to a Bank-wide average of eight years for technicalassistance projects. The shorter disbursement period corresponds to thespecific activities to be carried out under the project. Retroactivefinancing is proposed for expenditures up to a total of US$1 million incurredafter December 15, 1983 for project start-up activities.
Benefits
77. The proposed project, by improving the Government's informationsystem, would strengthen the basis for economic decision-making in Nigeria.The quality of the statistical data base would be improved, as would themonitoring, and consequently, the management of external debt and planimplementation. In addition, the FMNP's ability to prepare the next andfuture plans would be strengthened with the help of consultants and trainingfor planners.
Risks
78. The ministries and agencies benefiting from the proposed project lackadequate qualified and experienced staff. This gives rise to the risk thatinsufficient counterpart staff may be assigned to the project and this, inturn, could undermine the effectiveness with which skills and technologies canbe transferred to the host agencies. In an effort to minimize this risk,
- 22 -
agreement was reached during negotiations that new administrative units wouldbe established on a permanent basis to handle specific functions such asexternal debt monitoring and national plan monitoring. At the same time, theprogram of technical assistance would be structured in such a way as toorganize ongoing programs more efficiently and make better use of existingstaff rather than to require major new recruitment efforts.
79. The risk of insufficient counterpart funding which has impeded pro-gress on so many other Bank-supported projects would be reduced by the rela-tively high proportion of project cost financed from the Bank loan, includingthe housing costs of specialists and consultants.
PART V - LEGAL INSTRUMENTS AND AUTHORITY
80. The draft Loan Agreement between the Federal Republic of Nigeria andthe Bank and the Report of the Committee provided for in Article III, Section4(iii) of the Articles of Agreement are being distributed to the ExecutiveDirectors separately.
81. Special conditions of the project are listed in Section III of AnnexIII to this Report. An additional condition of loan effectiveness is that aproject coordinator be designated within the FMF.
82. I am satisfied that the proposed loan would comply with the Articlesof Agreement of the Bank.
PART VI - RECOMMENDATION
83. I recommend that the Executive Directors approve the proposed loan.
A. W. ClausenPresident
Attachments
November 29, 1984Washington, D.C.
-23 A_IE IPage 1 of 5
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UAUL .. .. .
(U:K NO. OF PERSONS/b0GSTOTAL .. ..
UAS" 3.02. /RURAL ..
ACCESS TO ELECT. CZ OF DWELLIMGS)TOTAL .. .. .. .. 6.bOIAN 81.3 42$. /b .. -. 3777.RURAL 1E . . . 16.1
AIWN I- 24 - Page 2 of 5
CERIIA - SOCIAL INDICATMRS DATA NIGERA REFEREC GEOPS (WEIGHTED AVERAGES) la
MOST (MST RECENr ESIMATE) lbRECEr IDDL r I EMIDDLE IsCQE
1960 . 1970, EsT SixTEJb AFRICA S_ OF SAHARA S. muFRIC. 4 MID EAs
'.DJUSTED ENROll'El R.ATOSTRMAZY: TOTAL 36.0 37.0 98-0 11 91.0 88.3
MALE 46.0 47.0 ._ 90.5 102.5FE!lALE 27.0 27.0 . 73-6 73.6
SEC01DAIY: TOTAL 4.0 4.0 16_0 Il 17-4 43_0MALE 6.0 6_0 __ 23.7 52.3FINALE 1.0 3.0 .. 14.8 33.0
VOCATONAL (I OrF SEODARY) 4.8 8.5 3.1 /i.j 5.3 10.3
-PPL-TEAHE RAIOPRLMARY 30.0 34-0 .. 38.6 30_3SECDA 19.0 21.0 .. 24 3 Z3.1
ADULX LITERACY RATE CE) 15-4 .. 34.0 35.6 43.5
PASSENGER CARS/TRWSAND POP 0_6 0.9 1.4 It 20.7 17.8RADIO RECEIVERSIDUSAND POP Z_8 19.3 66L 100.8 138-8TV RECEIVERsITHO1sAN POP .5.3 1..5 46.1NENSPAER C-DA(LY GENERAL
L'r-EXESr-) CIURCATIONPEL THOUSAND POPULATION 5.5 4.8 6.9 17.2 31.2
cINLIA AUAL ATTEDAEICAPTA .. .. 0.0 Id 0.3 1.7
TOTAL LABOR FORCE NTHS) 21768.0 z5992.0 32478.0FENALE (PERCENT) 41.3 40.6 39.7 33.8 10.8AGRICULTURE CPERCENT) 71.0 62.0 54.0 57.1 42.4ZNDUSTRZr (PERCEr) 10.0 14.0 19.0 17.4 Z7.9
PARTICIPA1IOS RATE (PERCENiT)TOLM 42.2 39.3 35.9 36.3 26-2MALE 50.3 47.3 43.7 47-6 46.4FEMKAE 34.4 315 28.2 2S.1 5.8
ECONOMIC DEPEnsDEC RATIO 1.1 1.2 1.6 1.4 1.8
IHCE DisTaRiDuTiPERCENT OF PRIVATE LSCM
RECEIVED 5rlCIGEST =S OF HOUSEOLDS ._ _
RIGMT FOE OF HOUSEHROLDS ..
LOMEST 201 OF HOUSEHOLDS .. ..
LaJEST 40: OF HODUSEOLDS .. ..
PW CT -omESTMAED AISOUrIE POVERTY INCMELEV.L tSS PER CAPITA)
u.As . . 696.0 525.3 274.8RAL . 341.0 269.0 177.2
EST1LATED RELATrvE P0MER=T rNCOMLEVEL (US$ PEr CAPITA)
URBA 62i.0 477.4 402.6RURAL 207.0 185.0 Z84.9
ESTIMATED POP. RBON ABSOLXFEPOVE7Tr INCOFPE LEVM (I)
UaBAN .. ..
RURALt ' 'L
NOT AVAILTABLrOT APPLICABLE
N 0 t E S
Is The group averages for each indicator ore populatico-weghted arithmetic means. Coverage of countrLes aong theindicators depends on availability of data and is not uniform.
lb Unless otherwise noted, Dats for 1960 refer to any year betweD 1959 and 1961. Data for 1970- between 1969 and1971; and data for Wmost Recent Estlmate- betwcen 1980 and 1982.
Ic 1977; /d 1979; /e 1962; If Including ex-North Cameroon under British administration; /g 976; rh 1972; /S 1979;Cetrtai fields of study previonsly classified under other second Level educatcon cf cat'On or technLcal
nature are now reported under general education-
JU2E. 1984
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-26 AM= I
Page 4 of 5
ECOrIC INDICATORS
63053 NATIOAL PRODUCT IN 1982 AXNIAL RATE OF GcOUTNCS. Conta.t Prices)
US& MIR. IlI S 1975-80 1981 2t 1932 1/
CUP at market Prices TO,106 100.0 3.1 -7.6 -. 2Cross Domestic Investment 16,615 2t.0 1.3 7.6 -13.3Cress National Saving 9.070 12.9 5.2 -31.6 -28.0Cvrrnt Account alsnsee -7,361 -10.5 - - -Eports otr Coods,S 13,S90 19-4 2.0 -31.0 -19.1Isports or GoodsoNFS 19.989 2e.5 15.6 -7.1 -31.9
OUTPUT, LAOR FORCE ANDPRODUCTIVITY iN 1982
value Added /1/ Labor Force /3t W.A. M Vorker
USSi 9n. S Kin. S OS s
Agriculture IS166 21.8 19 6 59-3 37 *0.6Industry & Mining 27.709 39.0 6.2 ;u-.9 .320 199.5Services 27.Bu7 39.2 7.0 21.3 3.978 133.7
Total/Awerage T1.020 100.0 32 100.0 2.16S ltO0.
GoYE3sT FINANCE
General Goverment Central Governmet
En MIn.] s or GDP Cm EI.) S of GOP
1132 /1/ 1932 .1/ 19T9-31 /4/ 1932 /Il 1982 /I/ 19791 /6/
Crrent Receipts 12.620 26.4 29.5 T7320 15.3 21.3Curet Expenditure 9.612 20.1 20.1 t.317 10.2 10.5
Current Surplus 3.003 6.3 9.6 26*2 5.1 10.5Capital Eprenditure 9,S5T 20.0 15.0 6 270 13.1 12.1Esternal Assistance(net) 264 0.6 0.6
MOME. CREDIT AND PRICES 1975 1977 1973 1979 1980 1931 1962
(Willion U Outstanding Ea4 Periot)Honey and cuasi Ron"e 55683 7.13 7.521 9.5g9 1S.390 15.239 16.696Baok Credlt to Public SectorCnet) 5S1 2.309 3.163 3.313 3.539 6,299 10,328anK CredLt to Private Sector 2.382 3,459 6.t85 5.126 6,764 8,917 10,567
(Percentages or Index Numbers)Hosey & Quasi Money as S or GOP 21.6 26.7 22.2 2S.3 30.9 32.3 3s.9Genoral Price IndeztI97Ss100) 123.9 143.0 166.7 186.3 206.9 2t7.5 266.5
Annual Percentage Changes in:Goneral Price Indes 21.7 15.6 16.6 11.3 10.0 20.5 7.7Dank Credit to Publlc Sector 319.1 36.1 5.4 6.3 T8.0 6t.0Bank Credit to Private Sector 36.8 65.2 29.T 14.3 31.6 32.2 18.5
Note: All coeverslons to dollars in this table art at the average exchange rate prcwaillng during periodcovered.
/Il 7-vlsed estimates. /21 Official estimates. /4/ Prowlslonal.13/ The data is dwrived rro planilng documents and refors to the number of 'goainully employed'.
*ot AVailable.April 18. 1985.
- 27 -ANNEX IPage 5 of 5
TUADE PATNEtS AD CAPITAL FLOWS
UIIAUCt Or P87ns NEICHANDIS EXPORSS (C81 01 1981-1963) /1/
1961 /Il 1982 /2/ 1983 f31 US$ Nln. S
(Willoe. US J)mprts of Goods f.o.b. e D.16 12,930 10,730 Crude Oil 13,421 96.7of wvich:Petroelun 17,162 12.T51 10,350 Cocoa Products 22S 1.6
morts of Goods f.o.b. 16,390 16,538 12,254 Palo Products I5 0.6Services a Ineme -4,803 -3,060 -3,205 Slr 25 0.2Not Transfers -567 -373 -260 Other Commedities 127 0.9
Current secount lalane* _6,042 -7,381 -3,992 Totel 13,U62 100.0
KITEDA^L DUS?, DECEN3E 31. 1963 /51ftrect Foreign Investment 165 358 365 _----- C--3-1---_ -- -
Not Official MLT orrovwing 6tl 758 9e0 US3 Kln.of which: Amortization -583 -^77 1200
Public Debt, lal. Undisbured 18,501ftier Capital(Shert-Ter) to09 *96 -643 *on-Cuarmnteed Priwate Debt
Net Errors A oelssions -1543 -689 0 Total Outatandlng 1 Disbursed 11.56
Overall Balance -6200 -618 -J290
fIauncing 6200 6518 4290-evwveNovemntaclar.- - -_ -- OUt SMICE'RATIO For 1963 /6/
eserv Uoeents(Icr.-) e,200 2,367 516 Arrears 0 *.051 3,770 1lDearve Levels 8,261 1.429 1,092 Seserve as Month of Imports 0.18 0.07 0.07 Public Debt, Iacl. Guarated 17.9
hon-Cuaranteed Privato DebtIWorts 18,390 16,838 12,253et whiec: Food 3,158 2.786 1.875 total Outatmnding & Disbursd 17.9
Consumer Goods *.612 *.101 3.2S9Intered-te Cooods 8. 682 .3%2 3.1t3Capital Goods 5,982 5.569 3.953 IEND/IDA LEUDIDO (Feb, 29,1963) (Nillien. 1)
DATE or EXCHanGElZED IDA /nI
1978: 31.00 a S$1.57 - -1979: 11.00 a US1.66 Outstandlng & Disbursed 348.0 36.71960: 31.00 a US71.83 lndisbursed 1,091.8 -1961: 31.00 * US$1.63 -1982: 11.00 : US;l.49 Outatandlag nel. Undisbursed 1t939.4 46.71983: *1.00 a USI .39
/11 ProvIsional. /21 Officiml esLimtes. /3/ Staff etma.tes.4/8 Official estltes for 1981 and 1982.
/S/ Escluding *S.9 billion short-term arrears./6/ Ratio of MLT debt service to ezports of goods and non-factor services.1T7 As of February 1984.
eot Avlilable
Arli 18. 1963
- 28 -
TM SrATUS o0 uBf caWn oPUAnos
A. STEMENT OF 81or w 30oPu om oAtIIS Is NIcEz 1/(nA of September 39. 1954)
Lon or USS MllionCrdit Amount (less cancellation)UNber Year Borrower Purpose Bank IA Udsbursed
Twenty alz loans and two credits fully diSabred 682. 1 35.3 2/
1191 1976 NigerIs E.C. State Ol Palo 19.0 9.71454 1977 NMaori Agric. Dev. Lafle 27.0 0.51455 1577 Ngeria Agric. Dev. Ayaunsa 35.0 0.21591 1978 NIeria Nuc. Eat. Sealloldor 011 30.0 3.715V7 1976 N1B Iadustrial Devlopomt 54.7 14.81667 1979 N"ria Agrc. Dew. JStl 23.0 4.2166S 1979 Neria Agric. Dev. lorn Z7.0 10.61679 1979 NgerIa Forestry 31.0 5.31711 1979 Nieria Water Supply - Kadun 92.0 70.71719 1979 Nigria Agurl. G Rural Itmt. Uae. 9.0 5.71766 1980 NEPA Power Lsgos 100.0 65.91767 1980 NierIa Urban Developmnt - Dauchi 17.8 10.31838 1980 Nigeria Agrc. Dev. - Olo-Worth 28.0 21.91654 1980 NgrIS Agric. Dev. - Ekiti-Akoko 32.5 20.41883 1980 NigerIa Roads 78.0 25.61981 1981 Niri Agric. Dev. - Beuchi 132.0 55.91982 1981 Nigeria Agrlc. Dev. - Kano 142.0 97.42029 1981 Nieria Tech. Aseitaance-Agrlc. 47.0 31.32036 1982 Nigria Vater Supply- Anmbra 67.0 54.42085 198Z NHEA Per - Distribution 100.0 8Z.12185 1982 Nigeria Agrc. Dev. - Sokoto 147.0 119.42299 1983 N11I Industrial Development 120.0 113.22345 1984 NMeria Fertilizer lnport 250.0 159.82376 1984 NMa Small * Rldius Scale Industry 41.0 40.9
= 2390 1984 NMUC Tech. Aset. - Gee ngiering 25.0 25.0= 2436 1984 "rigeS Agric. Dev. - Kaduna 122.0 122.0
Total 2.479.1 35.3 1.175.9Of whtch haa been repaid 293.3 4.0Total Outotandin 2.185.8 31.3
Amoent sold 16.8Of which a be e read 16.8 0.0
Total nem held by Dank 4 IDA 2H185.8 31.5
Total undisbured 1,175.9
3. STATEMENT or 17c INvESTMENTS(As ot September 30. 1984)
nlacal Type of Aruogt in USS MlionYear Igaines, Lsas Equity Total
1964. 1967. Are. -ext1lee Ltd. Textile PUg. 1.0 0.6 1.61970
1964 Nigeria Industrial Dev. Fin. Co. 1.4 1.4Delopment DAnk Ltd.
1973 Funtue Cottonseed Vex. Oil 1.6 1.6Cnahing Ltd. Crushing
1973 Nigerisn Alminuau AlVefLiun 1.0 0.3 1.3Extrusaon Ltd. Proce sing
1974 Ufiaga Sugar Sugar 0.1 0.1
1980 tt Textiles 6.2 0.7 6.9
1981 TheSe Hotel Touris 10.2 1.5 11.7
1985 Tifer lattery Dry-cell 4.7 - 4.7Batteries
Total Gro- Commitments 24.7 4.6 29.3
Less canc-llatlone. teruna-tlone, repayments and s*le 5.9 1.6 7.5
Total CoStment nov hbld by IFC 18.8 3.0 21.8
Undiebursed 7.2 1.4 8.6
Not yet Signed.1/ The tatus of the projects lS-ted in Part A iS described in a separate report on all Dank/IDA
financed projects ln eection. vbich io updated twice yearly nd circulated to thb ExecutiveDirectors on April 30 and October 31.
2/ Pnor to exchange rate adjustments.
- 29 -
Annex III
SUPPLEMENTARY PROJECT DATA SHEET
TECHNICAL ASSISTANCE PROJECT
Section I: Timetable of Key Events
(a) Time taken to prepare the project: 15 months
(b) Agency which preparet the project: Federal Ministry of FinanceFederal Ministry of National Planning
(c) First project discussions with the Government: April 1981
(d) First Bank mission to consider the project: November 1981
(e) Departure of the Appraisal Mission: February 1983
(f) Completion of negotiations: April 1984
(g) Planned date of effectiveness: May 1985
Section II: Special Bank Implementation Actions
None
Section III: Special Conditions
Condition of effectiveness:
(a) A project coordinator with terms of reference satisfactory to theBank would be designated in the FMF (para. 70).
Conditions of disbursement:
(a) Funds allocated for the PMF's External Finance Department would bedisbursed after the establishment of a debt monitoring division andthe appointment of a qualified and experienced person to head it(para. 56).
(b) Funds allocated for the FMWP's plan monitoring unit would bedisbursed after the establishment of such a unit and the appointmentof a qualified and experienced person to head it (para. 60).
30 - ~~~Amne IV- 30 - Page I of I
FEDERAL GOVERNMENT OF NIGERIAOrganzation of Planning & Rnancial Admintraflon
90C1' ADVGOM
I~~~~~~~~ I MNSICWOFRNANCE Cl M OFNL PLAMNGi, SECT01 INS17
I ;FMF1 1 ~~~~~(R.*^P) l I I CENTAL BAl OFA CY STAMMS PAEASTATAL EMIIIES
I (CMN) l l (MS)
"loft Bok-2633
FEDERAL MINISTRY OF FINANCE (FMF)Organization Choat
EMNSR l
_~__ACCOTA __
_ E ER I.
CIONGE CO.Ma fsEArocH NAO cml" NANO .CWToms & EXCSE HOM IANAN EXERWL F#itCIEPAfrl oDELOPWENT DEPARn DEPARTMEM DPARMNE DEPARTlMN
SECTOR MARI=. . ___ _ . ._-- .... _~~~~~~~V~a*-i3
Annex VI- 32 - Page 1 of 1
THE BUDGET DEPARTMENTOrganization Chart
RECURr CAPITALREVENUIESEXEDJEEPIMSDIVON DON DMSON
WVocd Banl- 26831
FEDERAL MINISTRY OF NATIONAL PtANNING (FMNP) ANDFEDERAL OFFICE OF STATISTICS (FOS)
Orgdnlzaflon Chad
I IMWU SEMWAW
S05t18ASUC1 ON _Tisc _CRCM ,V M MAR - -, . _ u
&AKCCS COMEE
NATKON^ SOCWA. ECONCMC &IrEH COGANAIK)ACCCtM ~ STATsncs . AUC sxnussrATSII cs W hHON RCES
maIw ~SEcrIE CIFFMIUC¶WE CU SV!ISNm~~1__FF
1~~~~~~~~~~~~~~~~~~~~~~~~Yd 1 I LI-I 43|
_34 -Annex VIIIPage 1 of 13
Management Consultant to FOS
Duration: Three years
Duties:
1. To work with the director of the FOS in strengthening management andplanning, and coordination among the FOS DivisiovD and within thestatistical units of other ministries, as well as overall developmentof data processing and communications support and trainingactivities. Specifically, to advise and assist in:
(a) Developing and implementing a management program and informationsystem for the FOS;
(b) Scheduling and coordinating the major data collection and surveyoperations of the statistical divisions and the support whichthey require from the Data Processing D%vision and auxillaryunits including printing and supply;
.c) Planning and implementing new activities currently entering theFOS program, including the Local Government Information System,the National Agrostatistics Data Bank, and the Cabinet OfficeManagement Information System; and
(d) Further development oi the FOS statistical training program, andparticularly in the organization of the proposed NationalStatistical Institute.
2. Supervising and coordinating the work of other advisory personnelprovided under the project.
- 35 - Annex VIIIPage 2 of 13
Consultant to FOS - Data Processing Site Development and Operations
Duration: One month, for assessment and recommendation.Two months, for supervision of implementation.Total: Three montho
Duties:
1. To undertake a thorough assessment of the facilities of the FOS DataProcessing Center, including the building and environment, as well ascurrently available data processing equipment and software. Toprepare detailed specifications for meeting requirements and torecommend an action program for starting operations as soon aspossible.
2. Once an agreed program has been approved, to assist in contractnegotiation for the necessary work, supervision of the installation,testing and acceptance of new equipment, and development of operatingand maintenance procedures for the Center.
3. Work with the Assistant Director in Charge in developing a detailedprioritized work program for the first year of operations.
4. Project the growth of data processing operations over a three-yearperiod, and prepare a Master Plan for meeting the expected increasein demand. The Master Plan should address all aspects of theoperation of a statistical computer center: hardware expansion plan,staff development, organization, service functions, etc.
- 36 - Annex VIIIPage 3 of 13
Senior Adviser to FOS - Data Processing Operations and Management
Duration: Three years
Duties:
1. To work with the Assistant Director in charge, Data ProcessingDivision, to strengchen the management, operations and planning ofthe Division. Specifically to advise and assist in:
(a) Developing and implementing procedures for work flow managementand scheduling of operations and systems maintenance;
(b) Establishing procedures for systems backup, security andintegrity;
(c) Organizing and implementing arrangements for requisition ofspare parts and supplies, and for tape and disk librarymaintenance;
(d) Developing and implementing accounting, billing, budgetary,inventory, and record maintenance systems; and
(e) Planning the expansion of the data processing center to enableit to meet the growing demand envisaged in the FOS program.
2. To work with FOS senior programmer analysts in the design anddevelopment of both operating systems and applications software,particularly in th1 conversion and/or adaption of software packagesacquired by the ,oS and the design of specilized systems to meetrequirements for which generali-ed software is inadequate.
j. To assist in establlshing a comprehensive training program forsystems staff, machine operators and data entry personnel, includingdevelopment of curricula and training materials for both formal andon-the-job instruction, and actual participation in such train:'rg andin the development of in-house training capability in the DataProcessing Division.
- 37 A Annex VXIIPage 4 of 13
Adviser to FOS - Systems Analysis and Programming
Duration: Three years
Duties:
1. To work with the progrimming officers of the Systems Section, DataProcessing Division, and FOS subject matter staff in the specifica-tions, design, programming and debugging and implementation ofapplication programs, including conversion of existing programs whereap: ropriate and 'customizing generalized software when required.
2. To assist in the development of a training program for FOSprogramming staff, including the preparation of training materials,development of both formal and on-the-job instruction courses andestablishment of curricula, grading procedures, records, and relatedadministrative matters.
3. To assist in the establishment and implementation of standards forprogram development and documentation, including user documentation,acceptance testing procedures and requirements for preparation,approval and recording program specifications.
- 38 - Annex VIIIPage 5 of 13
Adviser to FOS - Surveys and Statistical Methods
Duration: Three years
Duties:
1. To work with the Assistant Directors in Charge of the SurveyOrganization and Methods Division and Agricultural and HouseholdStatistics Divisions, in strength:ning the survey operations of theFOS. Specifically to advise and assist in:
(a) Organization and scheduling of the FOS survey program, includingthe integration of household and establishment surveys;
(b) Design of the content and format of questionnaires forindividual program components, and specification of dataprocessing requirements at the program level; and
Cc) Reviewing and redesigning where necessary the entire range ofquality-control issues, including frame design and statisticalmethods for blow-up and for correction of bias, non-response andother sources of error.
2. To ser-ve in a liaison capacity between the data processing staff andadvisers and the survey staff in the development of microcomputertechnology for survey processing and related analytical applications.
3. To assist in establishing liaison with related survey operations inthe Nigerian public sector, including those of the NationalPopulation Commission and those of APMEPU.
- 39 - Annex VIII
Page 6 of 13
Adviser to FOS - Economic Statistics
Duration: Two years
Duties:
1. To work with the Assistant Directors, National Accounts Division andGeneral Economic Statistics Division, to strengthen the general economicstatistics and related basic data operations of the FOS. Specifically, toadvise and assist in:
(a) Improving the quality, coverage and analysis of surveys ofindustry, manufacturing, construction, transport and trade.
(b) Development of independent estimates for gross domesticexpenditure at current and constant prices, including c_iginal(as opposed to residual) estimates of private consumption,together with related deflators and estimates of the statisticaldiscrepancy in the national accounts.
Cc) Conversion of the system of foreign trade statistics to U.N.SITC Rev. 2 and ECOWAS specifications, and upgrading of thetrade processing system including improved edit procedures andunit value index derivation and redesigns of forms andprocedures, and
(d) Strengthening the collection and processing of price statisticsand data from administrative sources, including state and localgovernments.
2. To assist in specifying the data required from other units of the FOSfor the General Economics Statistics Division, and in strengthening liaisonwith those units.
3. To assist in the preparation of work program documentation and instaff training in the two Divisions of assigned responsbility.
- 40 - ~~~~Annex VIII~ 40 - Page 7 of 13
Adviser to FMF - External Debt
Duration: iS months
Duties:
1. To assist the debt monitoring division and the director of theExternal Finance Department of the FMF in the development of-anintegrated debt system to support the Ministry's requirements formonitoring and controlling external debt, financial management andplanning, as well as internal and international statisticalreporting. Specifically, to:
(a) Analyze in detail the step-by-step process whereby informationis generated in the chain of transactions relating to externalborrowing operations, starting with loan negotiation and pro-cessing through commitment (or analogous confirmation proce-dures), deposit and disbursement of funds, exchange authoriza-tion, (where required) for debt service, payments of interestand amortization, and ex post accounting;
(b) Identify gaps in the flow of information generating andrecording processes for external borrowing, with particularattention to (i) reporting requirements for private borrowers,local governments and other actual or potential borrowers in thecountry over which the Federal Government may have less author-ity with respect to data collection, and (ii) establish channelsfor the exchange of information between FM, the Central Bank,and other ministries and agencies that incur external debtobligations; and
(c) Formulate recommendations for strengthening existing proceduresfor the collection of debt statistics where required.
2. To analyze the internal and external requirements for debt statis-tics, and to assist the FMF to design and implement a prototypemanual system for meeting these requirements based on the analysis ofexisting data and recommendations for improving these data based onthe initial analysis of the reporting system. This phase of theconsultancy will include the design of input forms and records andoutput formats, assistance in the establishment of reporting channelsand contacts and in the identification, organization and training ofthe staff requirement for a new statistics unit, as well asdocumentation of the system.
3. To work with staff of the FMF and the proposed data processingconsultant to prepare the specifications required for converting aprototype manual system to a computer-based system appropriate to therequirements of the FMF and other users in the Federal Government andcooperating agencies.
4. To coordinate with the Central Bank and with other agencies assistingthe Central Bank establish a system for monitoring short-term debt.
- 41 - Annex VIIIPage 8 of 13
Consultant to FMF - Data Processing for External Debt
Duration: 6 months
Duties:
1. To work with the debt monitoring division and the management of theExternal Finance Department of the FMF and with the statisticaladviser to these units of the FMF to design, establish and put intooperation a computer-based data processing system for debt, capitalflow and exchange control statistics. Specifically to:
(a) Convert the specifications prepared by the statistical adviserinto systems specifications for the proposed data processingsystem;
Cb) Advise and assist the working group in the selection andacquisition of appropriate hardware and software forimplementation of the system;
,c) To design, implement, test and debug the system as required soas to turn it over to the FMF on an operational basis.
2. To identify, organize and train staff of the FMF to maintain andoperate the data processing system in support of the newlyestablished statistics unit of the Ministry.
3. To document the system thoroughly, including the preparation ofoperational and training manuals for FMF staff.
-42 - Annex VIII- - Page 9 of 13
Adviser to FMNP: Plau Monitoriug
Duration: 18 months
Duties:
1. To assist the plan monitoring unit within the FMNP to adapt anddevelop the present system of plan monitoring to better serve theneeds of the Ministry. This would include the introduction ofcomputerised data processing to the extent that it appears justifiedin expediting the monitoring process. Specifically to:
(a) Review step-by-step the process whereby information on projectprogress is solicited by the monitoring agency, assembled by theproject executing agencies, transmitted back to the monitoringagency, collated and analysed.
(b) Identify gaps in the flow of information and makerecommendations to accelerate the responsiveness of thereporting system.
Cc) Recommend, as appropriate, the introduction of computerized dataprocessing, beginning with the task of data collation andanalysis by the monitoring agency.
{d) Assist the working group to implement recommended improvementsin the system.
(e) Train counterpart staff in the operation of an improvedmonitoring system with the objective of leaving in place a self-sustaining and improved monitoring system by the end of theassignment.
43 - Annex VIIIPage 10 of 13
Consultant to FNNP: Data Processing for Plan Monitoring
Duration: 6 months
Duties:
1. To work with the plan monitoring unit within FMNP and with theadviser to design, establish and put into operation a computer-baseddata processing system for monitoring the implementation of theNational Development Plan. Specifically to:
(a) Develop systems specifications for the data processing systemalong lines proposed by the working group and by the adviser.
(b) Advise and assist the working group in the selection andacquisition of appropriate hardware and software.
Cc) Design, test and implement the system so as to turn it over tothe FMNP on an operational basis.
2. To train staff of the FMNP to maintain and operate the newlyestablished data processing system and to make recommendations forexternal training as appropriate.
3. To document thoroughly the newly established data processing systemand to prepare operational and training manuals.
- 44 - Annex VIIIPage 11 of 13
Consultant to FMNP: Training of flanners
Duration: 8 months
Duties:
1. To assist the duly appointed working group within the FMNP to assessnationwide training needs for planning and related disciplines and tobegin a core program of training designed to address those needs.Specifically to:
(a) Update the assessment of training needs of Federal Ministries,parastatals and state governments in matters of planning.
(b) Ascertain the extent to which existing local institutions suchas ASCON, NISER or Nigerian universities have developed acapacity to train planners (or may possibly do so with somemodification or expansion of their present programs',
(c) Assist in establishing, on a pilot basis, courses in planningthat will address perceived training needs and which mayconstitute a core program for the training of planners.
(d) Review the longer-temn curriculum needs, staffing andaccomodation requirements of a sustained program of training forplanners.
Annex VIIIPage 12 of 13
Adviser to the Budget Department: Investment Program Monitoring
Duration: 24 months
Duties:
1. To advise and assist the duly appointed working group within theBudget Department to introduce procedures for continuously reviewingon a project by project basis the progress of the FederalGovernment's investment program with a view to integrating such areview into the annual process of budget formulation and budgetexecution. Specifically to:
(a) Establish close liaison with the FMNP (which monitorsimplementation of the entire national development plan) and tomake use, as appropriate, of that part of the FMNP monitoringsystem which corresponds to the Federal Government investmentprogram.
(b) To review the procedures for assembling information on budgetperformance in all federal agencies and for relating theinformation on budget performance to project execution.
Cc) To make recommendations for strengthening the link betweenbudget formulation and budget execution.
(d) To assist the management of the Budget Department to adaptprevailing procedures of budget formulation and budget executionso that they may serve better as instruments for implementingthe national development plan.
-46 - Annex VIIIPage 13 of 13
Consultants to the Budget Department
Duration: 6 months
Duties:
1. To assist the Budget Department and the Planning Committee to preparethe 1985 budget by evaluating Federal Government projects that wouldcost more than N30 million to complete, ranking these projects inorder of priority according to their evaluation Rnd by introducingprocedures and techniques to integrate the review into the budgetaryprocess. Specifically, this assistance has been geared to:
(a) Analyzing the information requirements for the projectevaluation task;
Cb) Designing and/or revising the call circular to cake into accountsuch information needs;
(c) Revising the timetable for the budgetary process to accommodatethe review task;
(d) Developing a methodology and specific criteria for evaluation;and
Ce) Implementing the review.
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