FOR OFFICIAL USE ONLY Report No: ICR00005765 INTERNATIONAL DEVELOPMENT ASSOCIATION IMPLEMENTATION COMPLETION AND RESULTS REPORT IDA 6098-NG and 6099-NG ON CREDITS IN THE AMOUNT OF SDR 255.4 MILLION (US$350 MILLION EQUIVALENT) TO THE FEDERAL REPUBLIC OF NIGERIA FOR THE KADUNA STATE ECONOMIC TRANSFORMATION PROGRAM-FOR-RESULTS August 17, 2022 Finance, Competitiveness, and Innovation Global Practice Africa West Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective July 11, 2022) Currency Unit = Nigerian Naira (NGN) N419.75 = US$1 US$1.31 = SDR 1 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS CofO Certificate of Occupancy CPF Country Partnership Framework CPS Country Partnership Strategy DFID Department for International Development (United Kingdom) DLI Disbursement-Linked Indicator E&S Environmental and Social ERGP Economic Recovery and Growth Plan ESSA Environmental and Social Systems Assessment FCCL Fiscal Commitment and Contingent Liability FRILIA Framework for Responsible and Inclusive Land-Intensive Agricultural Investments GDP Gross Domestic Product ICR Implementation Completion and Results Report ICT Information and Communication Technology IGR Internally Generated Revenue IRI Intermediate Results Indicator ISR Implementation Status and Results Report IVA Independent Verification Agent KADGIS Kaduna Geographical Information Services KADIPA Kaduna Investment Promotion Agency KADIRS Kaduna State Internal Revenue Services KADPPA Kaduna State Public Procurement Authority KDSG Kaduna State Government KEPA Kaduna Environment Protection Agency KSDP Kaduna State Development Plan LG Local Government LINKS LINKS – Catalysing Economic Growth for Northern Nigeria M&E Monitoring and Evaluation MDAs Ministries, Departments, and Agencies MoU Memorandum of Understanding MTR Midterm Review PAD Program Appraisal Document PAP Program Action Plan PAYE Pay As You Earn PDO Program Development Objective PforR Program-for-Results PIM Public Investment Management PIU Program Implementation Unit PPP Public-Private Partnership SESA Strategic Environmental and Social Assessment SNDB Subnational Doing Business SPRP Systematic Property Registration Program TIN Tax Identification Number TSA Treasury Single Account USAID United States Agency for International Development Regional Vice President: Ousmane Diagana Country Director: Shubham Chaudhuri Regional Director: Abebe Adugna Dadi Practice Manager: Zhenwei Qiang Task Team Leader(s): Karim Ouled Belayachi, Rajul Awasthi ICR Main Contributor: Nneka Ekwuozor TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES .................................................... 5 A. CONTEXT AT APPRAISAL AND THEORY OF CHANGE ..............................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .................................. 19 II. OUTCOME .................................................................................................................... 21 A. RELEVANCE ....................................................................................................................... 21 B. ACHIEVEMENT OF PDOs (EFFICACY) ................................................................................... 23 C. JUSTIFICATION OF OVERALL OUTCOME RATING ................................................................. 31 D. OTHER OUTCOMES AND IMPACTS (IF ANY) ........................................................................ 33 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 34 A. KEY FACTORS DURING PREPARATION ................................................................................ 34 B. KEY FACTORS DURING IMPLEMENTATION.......................................................................... 35 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 37 A. QUALITY OF MONITORING AND EVALUATION .................................................................... 37 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE.................................................. 38 C. BANK PERFORMANCE ........................................................................................................ 40 D. RISK TO DEVELOPMENT OUTCOME .................................................................................... 41 V. LESSONS AND RECOMMENDATIONS ............................................................................. 42 ANNEX 1. RESULTS FRAMEWORK, DISBURSEMENT-LINKED INDICATORS, AND PROGRAM ACTION PLAN ...................................................................................................................... 46 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 71 ANNEX 3. PROGRAM EXPENDITURE SUMMARY ................................................................... 74 ANNEX 4. BORROWER’S COMMENTS ................................................................................... 76 ANNEX 5. SUPPORTING DOCUMENTS .................................................................................. 77 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) DATA SHEET BASIC INFORMATION Product Information Program ID Program Name Financing Instrument Nigeria - Kaduna State Economic P161998 Program-for-Results Financing Transformation Program-for-Results Country IPF Component Nigeria No Organizations Borrower Implementing Agency Federal Ministry of Finance Kaduna State Planning and Budget Commission Program Development Objective (PDO) Original PDO The Project Development Objective is to improve the business enabling environment and strengthen fiscal management and accountability in Kaduna State. Page 1 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Administered Financing 216,210,000 216,210,000 220,606,948 IDA-60990 133,790,000 133,790,000 134,282,276 IDA-60980 Total 350,000,000 350,000,000 354,889,224 Non-World Bank Administered Financing Borrower/Recipient 0 0 0 Total 0 0 0 Total Program Cost 350,000,000 350,000,000 354,889,224 KEY DATES Program Approval Effectiveness MTR Review Original Closing Actual Closing P161998 20-Jun-2017 26-Apr-2019 26-Nov-2020 31-Mar-2021 31-Dec-2021 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 23-Mar-2021 260.92 Change in Results Framework Change in Loan Closing Date(s) Reallocation between and/or Change in DLI Change in Implementation Schedule Other Change(s) KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory High Page 2 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) RATINGS OF PROGRAM PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 20-Jun-2018 Satisfactory Satisfactory 0 02 21-Dec-2018 Moderately Satisfactory Moderately Satisfactory 0 03 27-Jun-2019 Satisfactory Satisfactory 176.92 04 17-Feb-2020 Satisfactory Satisfactory 176.92 05 11-Aug-2020 Satisfactory Satisfactory 260.92 06 24-May-2021 Satisfactory Satisfactory 260.92 07 10-Nov-2021 Satisfactory Satisfactory 315.87 SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 60 Sub-National Government 60 Industry, Trade and Services 40 Agricultural markets, commercialization and agri- 10 business Other Industry, Trade and Services 30 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 40 Business Enabling Environment 40 Investment and Business Climate 40 Public Private Partnerships 10 Page 3 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Public Sector Management 40 Public Finance Management 20 Domestic Revenue Administration 20 Public Administration 40 Transparency, Accountability and Good 10 Governance E-Government, incl. e-services 10 Municipal Institution Building 30 Urban and Rural Development 20 Rural Development 20 Land Administration and Management 20 Environment and Natural Resource Management 1 Climate change 1 Mitigation 1 ADM STAFF Role At Approval At ICR Regional Vice President: Makhtar Diop Ousmane Diagana Country Director: Rachid Ben Messaoud Shubham Chaudhuri Director: Anabel Gonzalez Abebe Adugna Dadi Practice Manager: Rashmi Shankar Zhenwei Qiang Karim Ouled Belayachi, Rajul Task Team Leader(s): Guillemette Sidonie Jaffrin Awasthi ICR Contributing Author: Nneka Ekwuozor Page 4 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL AND THEORY OF CHANGE 1. Before the Program appraisal, Nigeria had experienced relatively stable and positive economic growth averaging about 7 percent a year. As a result of a statistical rebasing of the gross domestic product (GDP) in 2014, Nigeria’s GDP was placed close to US$500 billion, making it the world’s 26th largest economy and the largest economy in Africa at that time. Nigeria’s economic position was founded on strong and stable macroeconomic fundamentals (tight fiscal and monetary stance as well as stable interest and exchange rates). It was also underpinned by an oil price boom, particularly between 2010 and the last quarter of 2014 when it reached record high levels. 2. The Buhari administration took office in November 2015, in a context of declining oil revenues, narrow fiscal space, large infrastructure gaps, and poor service delivery. Further decline in oil prices and a resulting decline in revenues, enhanced security challenges, and the overall uncertain global environment all manifested with force in Nigeria. Contributions from the oil sector as a share of Government revenues had been declining since 2011, from about 80.95 percent to 67.12 percent in 2014, and growth contributions had been negative, mostly due to supply disruptions. The economy contracted in 2015 on the back of a sharp drop in commodity prices. Revenues which were already low at 10.5 percent of GDP in 2014 declined to 5.2 percent of GDP in 2016—on account of the decline in oil revenues. GDP growth fell from 6.3 percent in 2014 to 2.7 percent in 2015 and to minus 1.5 percent in 2016 despite the Federal Government’s expansionary fiscal policy. 3. To address these multiple challenges, the Federal Government of Nigeria launched its Economic Recovery and Growth Plan (ERGP) for 2017–2020. The ERGP set out actions to restore macroeconomic stability in the short term, as well as structural reforms and social sector programs to diversify the economy and set it on a path of sustained inclusive growth over the medium to long term. The ERGP set an ambitious target of reaching 7 percent growth in real GDP by 2020. To this end, the ERGP had three broad strategic objectives: (a) restoring growth, (b) investing in the Nigerian people, and (c) building a globally competitive economy. 4. The ERGP recognized that states and local governments (LGs) had a critical—and often leading— role to play in many of the strategies outlined in the plan. The ERGP therefore encouraged states to develop economic recovery plans, which they would undertake in line with the thematic areas’ policy objectives laid out in the ERGP. In 2015, 18 states from a total of 36 states and the Federal Capital Territory had internally generated revenue (IGR) below 20 percent of the net Federal Account Allocations. The ERGP highlighted that since 2011, the total state government revenues had declined by 8 percent a year, while expenditures increased by 4 percent a year. At the end of 2015, state expenditures exceeded revenues by approximately NGN 1 trillion. 5. Kaduna State required support to continue to achieve its objectives and reached out to the World Bank through the Federal Ministry of Finance. The state, historically known as a civil service state, had encountered stagnant growth and increasing insecurity which hindered investment. Upon being elected in 2015, Governor El-Rufai embarked on an ambitious drive to “make Kaduna great again” by becoming the destination for business investment and food basket for northern Nigeria. 6. Kaduna State possessed developmental potential and appeared to be well-suited for the first Subnational Program for Results (PforR) of this type. Within the northwest, Kaduna State, in spite of a Page 5 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) long history of conflicts,1 stood out as one of the most advanced in the development path, both in human capital and service delivery. For example, children literacy rate is 60 percent higher than the regional average2 and so is the rate of skilled birth attendance,3 which potentially makes it a regional engine for growth. Reform success in Kaduna State could therefore have a compelling demonstration effect for other northern states and change the narrative of northern Nigeria characterized as a region with a vicious circle of lower growth, higher poverty, and conflict. With an estimated population of 8 million, Kaduna State is considered the gateway to northern Nigeria, located along the Lagos-Kano corridor, the main trade route between Lagos and northern Nigeria, connecting the two largest cities in Nigeria (Figure 1). In 2015, Kaduna State’s GDP was estimated at US$11.4 billion, with agriculture representing 37 percent; industry, 18 percent; and services, 45 percent. In 2013, Kaduna State was estimated to be the fourth largest economy in Nigeria (after Lagos, Kano, and Oyo States) and it was estimated that in the state with a population of approximately 8 million, counted, creating jobs was a vital priority. Figure 1. Nigeria Road Network Source: An Infrastructure Action Plan for Nigeria (African Development Bank 2013). 7. The Kaduna State government recognized the urgent need to address a costly and unpredictable business environment and attract private investment into Kaduna to create jobs, improve living standards, and transform its economy into a more productive one. Confirming the importance for the state to improve its business regulatory environment, the World Bank’s 2014 Subnational Doing Business report ranked Kaduna in the 15th position (out of 36 states) for Starting a Business, 32nd position for Dealing with Construction Permits, 24th position for Registering Property, and 2nd position for Enforcing Contracts, highlighting significant potential areas to improve the business-enabling environment in the state. 1 There is a long history of intercommunal conflicts in Kaduna State and conflicts have resurged in the period 2015 – 2017 2 National Education Data Survey, 2015 3 National Nutrition and Health Survey, 2015. Page 6 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) 8. Hence, Kaduna State embarked on an ambitious Kaduna State Development Plan (KSDP, 2016– 2020) (Figure 2): Delivering on Jobs, Social Justice and Prosperity, which stressed the importance of accelerating private investments, and private sector–led growth, to create jobs and strengthen the fiscal sustainability of the state. The plan focused on four areas: economic development, social welfare, security and justice, and governance, with the following vision: • Economic development. Kaduna will become the destination for business investment and food basket for northern Nigeria. • Social welfare. Kaduna will ensure that all citizens have access to high-quality and affordable health care and education. • Security and justice. Kaduna will turn the tide on the public perception of insecurity in the north, becoming a place where every citizen can live and move freely without harm. • Governance. Kaduna will set the standard for transparent decision-making, citizen involvement, and a competent and responsive public service. Figure 2. Kaduna State Development Plan (2016–2020) 9. A key focus of the KSDP was to attract private sector investments for economic development with the following vision: “Kaduna will become the destination for business investment and the food basket of Northern Nigeria.” Increased private sector activities in Kaduna State would then also generate much-needed additional IGR, which could subsequently be allocated to social welfare. In turn, improved social welfare would foster further economic development. In addition, as a foundation for economic development and social welfare, the KSDP put major emphasis on governance reforms: “Kaduna will set the standard for transparent decision making, citizen involvement and a competent and responsive public service.” It would also focus on streamlining recurrent expenditure to create space for capital and social expenditure, as well as strengthening the preparation and execution of public investments. 10. In that context, the Bank supported Kaduna’s strategy to become ‘open for business’ through its Kaduna State Development Plan (KSDP) and the PforR was developed. The program, through championing effective governance, aimed to aggressively improve the business environment which would in turn attract private investments to create jobs and increase IGR. Second, it aimed to markedly improve Page 7 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) fiscal management and accountability to ensure that the limited financial resources of the state were used efficiently to allow for the financing of human capital and physical assets, to further catalyze private investments. Theory of Change (Results Chain) 11. The Program at appraisal aimed to assist the Kaduna state government to improve the business- enabling environment and strengthen fiscal management and accountability. Progress towards the PDO was measured by three PDO indicators to (i)simplify business processes – measured by the time reduction for businesses spent interacting with government to get specific permits such as business premises registration, construction permits, and certificates of occupancy (land registration) (ii) increase budget credibility - measured by an improved capital expenditure rate of the budget and better Internally Generated Revenue (IGR) outturn (actuals against budgeted) (iii) increased fiscal accountability to its citizens - measured by improved government responsiveness to citizen’s feedback on fiscal performance. 12. According to the KSDP, private investments were expected to play a major role in generating jobs and revenues for the state. The theory of change toward the first area of the PDO was built on the logic that simplified business processes would reduce transaction and compliance costs. By improving regulations and procedures that affect the entry and operation of businesses, both prospective and existing investors would have a facilitated business operating environment. 13. The theory of change for the second and third areas of the PDO was that strengthened fiscal management and accountability would ensure that increasing (but still limited) revenues are spent as efficiently as possible. This would help increase the state’s capacity to invest in human capital and physical assets and to catalyze private investments. By inviting scrutiny of the government’s actions and decisions on the state budget, the public’s trust in the government would be built up over time allowing for better execution of future projects for the public good. 14. Figure 3 below illustrates how the planned activities were geared to generating the expected outputs and achieving the expected outcomes and longer-term goals. The results chain identifies, for each disbursement-linked indicator (DLI), the activities/inputs, outputs, and intermediate outcomes, as well as the overall PDO outcomes. The results chain identifies where the DLIs fit within the Results Chain: to the extent possible, efforts were made to include DLIs at the intermediate outcome level and to minimize DLIs at the output level. Two DLIs (DLIs 1 and 6) are at the PDO outcome level. The results chain also identified prior results, as well as some activities included in the Program Action Plan (PAP). 15. The three PDO indicator areas were distributed under Results Area 1 - improving the business enabling environment (PDO indicator 1) and Results Area 2 - strengthening fiscal management and accountability (PDO indicators 2 and 3). The two results areas remained closely linked. Increased private sector activities in Kaduna State through improved business environment would generate much-needed additional IGR, which could subsequently be allocated to social welfare. In turn, improved social welfare would foster further economic development. Tax reforms underpinning the broadening of the tax base and the increase of collection rate under PDO indicator 2 (DLIs 6 and 8) benefit businesses. By streamlining local taxes, automating tax payments, and reducing the risk of corruption through centralized tax collection, the cost of compliance reduces and promotes a better business environment (Results Area 1). Improved management of public investments (PDO indicator 2) benefits contractors owing to the payment of significant arrears. A higher execution rate of capital expenditure (PDO indicator 2) increases certainty and business opportunities for contractors as well. The streamlining of e-procurement also reduces contractors’ vulnerability to corruption and lowers market barriers. In addition, leveraging private Page 8 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) investments through public-private partnership (PPP) (Results Area 1) will allow a more efficient use of scarce fiscal resources (Result Area 2). Figure 3. Results Chain Page 9 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Page 10 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Page 11 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Rationale for PforR Support and Program Scope and Boundaries 16. At approval, a Program-for-Results (PforR) was considered the most appropriate instrument to support Kaduna State’s development objectives for four principal reasons: (a) Ownership. Kaduna State had developed a comprehensive and compelling State Development Plan for 2016–2020 (KSDP) with a detailed Results Framework and defined a Medium-Term Fiscal Framework to support the implementation of the plan. The state had also established an institutional framework to support the implementation of the plan, with the establishment of a Results Delivery Unit within the Governor’s office, which would work in close coordination with the Monitoring and Evaluation Department of the Planning and Budget Commission. The proposed PforR aimed to support selected aspects of the KSDP, focusing on two pillars of the plan: Economic Development and Governance. (b) Flexibility. By focusing on and aligning with the KSDP outputs and outcomes, the Program left room for adjustments along the results chain and allowed the KDSG to allocate resources and take necessary measures to address unforeseen implementation challenges to optimize results (with a focus on outcomes rather than process). (c) Institutions building. Before approval, Kaduna State had made some progress to strengthen its institutions and systems. The PforR would further support the state’s institutional capacity building, including financial systems, procurement, and environmental and social (E&S) systems. In addition, the reliance of the PforR on Kaduna State’s own systems would further reinforce the progress that had been achieved and the proposed capacity building. (d) Incentives. The PforR would encourage the achievement of key results over the implementation period of the KSDP (2016–2020). The PforR supported the implementation of policy reforms, with a focus on incentivizing the achievement of gradual results to ensure that the reforms yielded the expected impacts. The strong focus on results of the PforR instrument was aligned with the Kaduna state government leadership’s commitment for visible results and impact. PforR Program Scope 17. The PforR supported selected elements of the (a) Economic Development and (b) Governance pillars of the KSDP. Within the two KSDP pillars, the PforR focused on the following two results areas: • Improving the business-enabling environment • Strengthening fiscal management and accountability. 18. The Kaduna State Executive Council, chaired by the Governor, was responsible for coordinating all efforts related to the implementation of the KSDP to ensure that all stakeholders work together toward a common set of priorities (Figure 4). The Council ensured that the Government’s strategic priorities were being appropriately supported by the Sector Implementation Plans (SIPs) and budget. Members of the State Executive Council, except for the Deputy Governor, were appointed by the Governor in due consultation with the legislative arm who approved membership, and included the Governor, Deputy Governor, Secretary to the State Government, Chief of Staff to the Governor, Commissioners, and Special Advisers. The Council is the highest administrative decision-making body in Kaduna State and oversaw deliberations on key issues of great priority to the state. Page 12 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Figure 4: Kaduna State implementation arrangement 19. The implementation of the PforR was the responsibility of the Kaduna State Ministry of Budget and Planning which was renamed to Planning and Budget Commission in 2017, in close coordination with the Kaduna State Ministry of Finance. A PforR Steering Committee was established June 2017, chaired by the Governor, and comprising the Commissioner of Planning and Budget and the Commissioner of Finance, as well as the heads of the lead agencies for each DLI, the PforR Program Manager and a representative of the Federal Ministry of Finance. In addition, to support the development and implementation of the Framework for Responsible and Inclusive Land Intensive Agriculture (FRILIA), a specific multi-stakeholder Steering Committee was established. 20. The PforR implementation was supported by development partners with particular emphasis on providing support on resolving emerging program implementation issues and on building institutional capacity. Department For International Development (DFID) technical assistance was envisioned to play a critical role. Close coordination with DFID was ensured with the secondment of a DFID staff to the World Bank Abuja office, within the Trade and Competitiveness Global Practice. The PforR also leveraged technical assistance provided by other development partners such as USAID and the Open Government Partnership for citizens engagement initiatives in the program. Parallel World Bank Advisory Services and Analytics (ASA) also strengthened the State’s capacity to achieve the results. 21. The PforR benefited from significant external technical assistance while having no IPF component to provide technical assistance directly. The Program built upon the support to investment climate reforms provided to Kaduna State by GEMS3 (Growth and Employment in States–3), a joint DFID- WB program. GEMS3 support focused specifically on land administration, tax administration, and Page 13 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) investment promotion and facilitation. GEMS3 closed in June 2017 and DFID initiated the preparation of a follow-up intervention (LINKS – Northern Nigeria Spatial Growth Program) focusing on three States in Northern Nigeria: Kaduna, Kano, and Jigawa States. LINKS, however, did not materialize. 22. The PforR also relied on ENABLE (Enhancing Nigerian Advocacy for a Better Business Environment) II, which aimed at improved policy and regulatory environment for business by enhanced Public-Private dialogue (PPD). ENABLE II played a critical role in Kaduna State by fostering public-private dialogue (for example, in the context of the implementation of the presumptive tax for the informal sector). Nigeria Infrastructure Advisory Facility (NIAF) II, which closed in December 2016, provided critical assistance on infrastructure planning and the preparation of the Project Implementation Manual. 23. DFID’s PERL (Partnership to Engage, Reform, and Learn) Project provided critical technical assistance during PforR implementation, as a follow-up operation to SPARC (State Partnership for Accountability, Responsiveness and Capability), under which the KDSG has benefitted from technical assistance for governance reforms since 2013. The PERL Project aimed to promote public sector accountability and reduce corruption to ensure that Nigeria uses its own resources to deliver the public goods and services required for poverty reduction and growth. The PERL Project supported the PforR results area focusing on accountability (including by building institutional capacity for budget preparation and execution and citizen engagement). 24. The World Bank Competitive Industries and Innovation Program (CIIP), funded by the European Union, Austria, Norway, and Switzerland, supported the preparation and implementation of the PforR, with a focus on supporting competitiveness in Northern Nigeria, leveraging the Lagos-Kano corridor. The Public-Private Infrastructure Advisory Facility (PPIAF), a global technical assistance facility managed by the World Bank, provided technical assistance to Kaduna State on PPP Project prioritization and institutional strengthening. Table 1 summarizes the parallel technical assistance supporting the PforR implementation. Table 1. External Technical Assistance Supporting the Program DLIs External Technical Assistance DLI1: Simplified business processes DFID ENABLE II (with a focus on PPD) DFID LINKS (did not materialize) CIIP DLI2: Implementation of systematic property DFID LINKS (to be approved). No support to the registration program SPRP per se, but technical assistance on land issues in Kaduna State CIIP DLI3: Strengthening of investment promotion DFID LINKS (to be approved) CIIP DLI4: Development of the legal and institutional Public Private Infrastructure Advisory Facility framework for PPP (PPIAF) DLI5: Development and Implementation of a DFID LINKS (to be approved), includes technical Framework for Responsible and Inclusive Land assistance on land issues in Kaduna State Intensive Agricultural Investments (FRILIA) CIIP DLI6: Increasing IGR outturn DFID PERL DLI7: Improvement of tax collection DFID PERL DLI8: Increasing capital expenditure execution DFID PERL Page 14 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) rate DLI9: Increasing procurement effectiveness DFID PERL DLI 10: Improved government responsiveness DFID PERL to citizens’ feedback on fiscal performance 25. The proposed PforR contributed to the World Bank Group’s twin goals: (a) ending extreme poverty—reducing the share of the global population living in extreme poverty to 3 percent by 2030 and (b) promoting shared prosperity—increasing the income of the bottom 40 percent of the population in each country in a sustainable manner. The PforR built on the recommendations from the 2016 World Bank report ‘Poverty Reduction in Nigeria in the Last Decade’. Rapid, diversified growth and job creation in Nigeria was said to depend on the twin forces of industry and services-driven wages in urban areas and agricultural productivity in rural areas. Policy intervention, thus, should focus, in particular, on increasing the number of jobs in the modern private sector and boosting the productivity of traditional economic sectors. The report also advocates for the provision of services and infrastructures, with a renewed effort to provide more basic services ranging from education to water and sanitation and basic infrastructures, such as secondary roads and electricity. 26. Another focus of the PforR was to support Kaduna State to increase its fiscal space and enhance expenditure effectiveness to boost investments in human capital and physical assets sustainably. Enhanced fiscal space was needed for transformational scale-up in service delivery, as embedded in the KSDP. As noted by the 2016 World Bank report on ‘Economic Growth in Nigeria: Past Determinants and Future Prospects’, the Nigerian public sector revenues and expenditures were comparatively small relative to both the economy and the gaps in human and physical capital. As a result, Nigeria was locked in a vicious cycle in which the limited financial capability of the Government and the poor quality of its institutions inhibited investment and growth in the non-oil economy, further eroding the revenue base and sapping the capacity of the public sector. The PforR aimed to address, at the state level, serious deficiencies in capital project selection and evaluation and “permanent discrepancy between budgeted and actual capital spending (as a result) of cash management and procurement practices” countrywide. As a result, Nigeria ranked among the worst performers on Public Investment Management (PIM).4 Program Development Objectives (PDOs) 27. The PDO aimed to improve the business enabling environment and strengthen fiscal management and accountability in Kaduna State. The Program supported the efforts of Kaduna State to improve its business-enabling environment with the view to become a leading investment destination in Nigeria. On one hand, the Program supported the efforts of Kaduna State to significantly increase private investments for job creation and revenue generation, and on the other hand, the Program supported Kaduna State to strengthen fiscal management and accountability to ensure that increasing revenues were spent as efficiently as possible, to increase the state capacity to invest in human capital and physical assets and to catalyze private investments. Accountability underpinned this strategy by building public (including investors’) trust in government and ensuring that its actions and decisions were subject to public scrutiny and citizen engagement. 4Dabla-Norris, E., and Alii. 2011. “Investing in Public Investment: An Index of Public Investment Efficiency.” International Monetary Fund Working Paper. Page 15 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Key Expected Outcomes and Outcome Indicators 28. Key results indicators that reflected the overall results areas of the Program were as follows: • PDO Indicator 1. Simplified business processes (measured by the reduction in the time required to start a business, deal with construction permit, and register property) • PDO Indicator 2. Increased budget credibility (measured by two indicators: IGR outturn [IGR actual versus budgeted] and capital execution rate) • PDO Indicator 3. Increased fiscal accountability (measured by improved government responsiveness to citizen’s feedback on fiscal performance: responsiveness was indicated by the percentage of capital projects improved in response to citizens’ feedback received via all platforms, both conventional and social media). Program Results Areas and DLIs 29. The design of the PforR comprised 10 DLIs within two Results Areas as outlined in Table 2. Table 2. PforR DLIs and Results Areas at Effectiveness Elements of the DLI Definition PDO Results Area 1: Improving the Business-enabling Environment (PDO indicator 1) Policy reforms to DLI 1: Simplified business Reduction in the time required to start a business, improve business processes: reduction in the deal with construction permit, and register enabling time required to start a property—as a proxy for the simplification of environment and business, deal with business processes in Kaduna State. increase private construction permit and Prior result: Approval of Ease of Doing Business investments register property Charter Strengthening of DLI 2: Systematic Property Number of new CofOs issued. CofOs provide citizens Citizens’ Property Registration Program with land tenure security, reduce land disputes, add Rights in an inclusive value to the land, facilitate transactions, and help manner the Government provide better public services. Prior result: 3,000 new CofOs issued by June 30, 2017, and approval of Kaduna Geographical Information Services (KADGIS) regulations Attracting and DLI 3: Strengthening Number of Memorandums of Understanding facilitating new Investment Promotion (MoUs) signed between investors and Kaduna investments Investment Promotion Agency (KADIPA). This measures the effectiveness of KADIPA to attract and facilitate private investments in Kaduna State. Prior result: Organization of KADINVEST 2.0 (April 5– 6, 2017) Page 16 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Elements of the DLI Definition PDO Development of the This DLI will increase the capacity of Kaduna State DLI 4: Development of the legal mandate to Legal and Institutionalto undertake PPP transactions, a major focus of the drive public-private Frameworks for Public- KSDP, and will involve the following: partnerships (PPPs) Private Partnerships (a) Suitable PPP legal and institutional framework in Kaduna State approved that comprehensively defines and legally enables the PPP project cycle process (project identification, preparation, procurement, and implementation, including E&S aspects) and clarifies the institutional roles and responsibilities of all KDSG stakeholders (b) Project Facilitation Fund Rules, Governance, and Operational Manual prepared (c) PPP pipeline prepared (d) Pre-feasibility studies for three projects completed (e) PPP Fiscal Commitment and Contingent Liability (FCCL) Management Framework adopted; FCCL from existing projects measured and disclosed (f) PPP Disclosure Framework adopted, web portal established, and project information made available (g) Detailed feasibility studies for one transaction with low E&S risks* completed (h) Project Facilitation Fund established and seed funding of NGN 60 million provided (i) One PPP transaction with low E&S risks* meets commercial close * According to the PforR policy and as stipulated in the Program Implementation Manual Prior result: Not applicable Legal framework for DLI 5: Development and Development and implementation of a FRILIA to an inclusive land- Implementation of a ensure that land acquisition and resettlement for intensive Framework for Responsible large-scale agribusiness investments are undertaken agricultural and Inclusive Land- in line with established international good practices investments to Intensive Agricultural and guarantee shared benefits between private support benefits Investments (FRILIA) investors and surrounding communities. sharing between Prior result: FRILIA principles approved by Kaduna communities and State Governor investors Page 17 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Elements of the DLI Definition PDO Results Area 2: Strengthening fiscal management and accountability (PDO indicators 2 and 3) Improving revenue DLI 6: Increased IGR IGR outturn is measured by the ratio of IGR generation outturn actual/budgeted. It demonstrates the budget realism of the KDSG in revenue mobilization. Prior result: Budget and Treasury Management Information System fully operational for revenues and expenditure chain DLI 7: Improvement of tax The increase in the number of registered taxpayers collection (using the Tax Identification Number [TIN]) filing returns is used as a proxy for improving tax compliance and broadening the tax base. Prior result: Number of registered taxpayers (TIN) by June 2017: 30,000 Improving public DLI 8: Capital Expenditure An increased capital expenditure execution rate will investment Execution Rate demonstrate the capacity of Kaduna State to management significantly increase public investment. (enhanced budget Prior result: Establishment of Planning Commission; credibility) release of draft Kaduna Infrastructure Master Plan for public consultations; compliance with budget circular on capital project appraisal and prioritization in 2017 approved budget; reduction of arrears of payment to contractors from 3 percent to 1 percent of appropriations Fiscal Accountability DLI 9: Increasing Number of ministries, departments, and agencies procurement effectiveness (MDAs) adopting e-procurement and disclosing contract awards whose procurement is audited. Prior result: Approval of Procurement Guidelines (according to the Procurement Law); adoption of e- procurement strategy; disclosure of contracts above NGN 50 million since January 2017 DLI 10: Improved Government responsiveness to citizens’ feedback on government fiscal performance is measured through the responsiveness to citizens’ percentage of capital projects improved in response feedback on fiscal to citizens’ feedback captured by the monitoring and performance evaluation (M&E) system (Eyes and Ears) for public investments under implementation by the Planning and Budget Commission. Prior result: Approval of Audit Law by Executive Council, Approval of Freedom of Information Law by Executive Council; disclosure of state and LG budgets for 2017; disclosure of state budget execution audit report for 2015 and 2016; launch of citizen’s module in Eyes and Ears for capital projects Page 18 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs Outcome Targets, Result Areas, and DLIs 30. There was a 22-month delay in effectiveness due to the Program not being approved at Federal level by the House of Assembly. The Program was approved by the Board in June 2017, however the Program only achieved effectiveness in April 2019. The Kaduna state government however continued to work toward the PforR objectives given its close alignment to the KSDP, but this delay slowed down the pace of reforms in specific DLIs. Due to the lengthy nature of the PPP procurement and tender process and given the reluctance of investors to generally engage in PPPs during the onset of the COVID-19 pandemic, it was unlikely that one PPP would meet commercial close at the end of the Program, so the DLI was restructured to remove that final result. 31. The LINKS program which would have provided technical assistance for FRILIA (DLI 5) – an area where the PforR technical assessment had identified that Kaduna needed capacity building — was cancelled by the British government. The long timelines required to pilot FRILIA meant that Kaduna state would not achieve the last steps in each of these DLIs in the timeframe that remained as a result of the lengthy delay in effectiveness. 32. During the Mid-Term Review Mission (September 28 to October 6, 2020), the 2022 targets for DLIs 4 and 5 (Table 2) were dropped (see Table 3). The funds from DLI 4 and 5, totaling US $18.5 million, were divided equally across the DLIs 1, 6 & 7 where the state was on course to exceed targets. Increasing the funds allocated to these DLIs by SDR 13.3 million (US $18.25 million), divided equally across the three DLIs. A nine-month extension of the project from March 31, 2021, to December 31, 2021, was also granted at the MTR considering the effects of COVID19 on implementation timelines. The restructuring paper is attached in Annex 5. Table 3: Details of DLI 4 and DLI 5 restructuring Prior Indicative Timeline for DLI achievement results Dropped targets at [Since Restructuring at Mid 2019 2020 2021 2022 November Term Review Oct 2020 8, 2016] DLI4: Approval Project FCCL from One PPP One PPP transaction Developm of legal Facilitation existing transacti with low E&S risks* ent of the and Fund Rules, projects on with reaches commercial legal and institutio Governance, measured low E&S closure institution nal and and risks* *According to the al framewo Operational disclosed; reaches PforR policy framewor rk for Manual PPP commer k for PPP PPP prepared; disclosure cial Development Framework closure of PPP adopted; *Accordi pipeline, pre- web portal ng to the feasibility established, PforR Page 19 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) study for 3 and project policy priority information transactions; available; PPP FCCL Detailed Management feasibility Framework studies for adopted one transaction with low E&S risks* completed; Project Facilitation Fund established and seed funding of NGN 60 million provided *According to the PforR policy Allocated - 8.75 8.75 8.75 8.75 8.75 amount ($m) DLI5: FRILIA FRILIA Enactment of Social Social audit confirms Developm principles developed in FRILIA audit satisfactory ent and approved line with confirms implementation of implemen by Kaduna approved satisfact FRILIA tation of a State principles and ory Framewor Governor through a impleme k for consultative ntation Responsib process of FRILIA le and Inclusive Land- Intensive Agricultur al Investmen ts (FRILIA) Allocated 5 10 10 10 10 amount ($m) Page 20 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Other Changes 33. Further clarifications were made to DLI 2 to ensure that (a) Certificates of Occupancy (CofOs) are not counted at the point of the Governor’s signature but are counted only when they have been duly registered as legal documents by the registrar and (b) all new CofOs issued under all SPRPs under the state were counted as part of this DLI. This strengthened the DLI. 34. DLI 7 was changed to best reflect activities within the remit of the state, thereby removing reference to registrations with the Joint Tax Board which were outside the scope. The proposed amended DLI clarified this and became “Number of registered taxpayers registered with KADIRS and filing tax returns using their KADIRS Identification Number.” 35. DLI 9 was also changed to eliminate any double counting with the State Fiscal Transparency, Accountability and Sustainability (SFTAS) PforR which also included DLIs rewarding procurement reforms. This change allowed for the removal of any duplication and clarified that Kaduna had to implement e-procurement in at least 15 main procuring MDAs (excluding Education, Health and Public Works already covered under SFTAS). 36. DLI 10’s scope was expanded to include infrastructure-related projects, while also widening the scope of collection points for citizen feedback. The title of this DLI was proposed to be amended to “Improved Government responsiveness to citizens’ feedback on Capital Projects and infrastructure related services under implementation and completed.” This allowed critical additional capital projects from also being incentivized to implement citizen feedback mechanisms. Rationale for Changes and Their Implication for the Original Theory of Change 37. Although the PforR was restructured once, it did not experience significant design changes and maintained its PDO, results areas, DLIs (with the modifications listed above), and theory of change throughout implementation. II. OUTCOME A. RELEVANCE Relevance of PDO 38. The Program aimed to improve the business-enabling environment and strengthen fiscal management and accountability. Relevance of PDO is assessed as “High”. At closing, as during preparation, the operation’s development objectives remained fully aligned with the Bank’s Country Partnership Strategy guided by the Country Partnership Framework (CPF). Specifically, the PDO contributed directly to CPS 7th pillar to promote job and economic transformation and diversification which has a complementary objective of “further business environment reforms and promoting competitive clusters”. Beyond the alignment with the Bank’s objectives, the PDO and the program were fully aligned to the objective of the Kaduna State Development Plan (KSDP, 2016–2020) of better prosperity for its citizens and overall better governance. In addition to directly contributing to CPS pillar on job promotion and economic transformation and diversification, the operation (aiming to “strengthen fiscal management and accountability in Kaduna State”) has contributed to the CPS pillar on strengthening Page 21 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) foundations of the public sector (core objective - Increase domestic revenue mobilization, improve the quality of public expenditures and strengthen debt management) Relevance of the DLIs Definition of DLIs 39. Relevance of DLIs is rated High, reflecting their clear link with the PDO. The DLIs were well defined and measurable and were designed to reflect critical elements of performance included in the Results Framework as PDO indicators or as Intermediate Results Indicators (IRIs) which are required to achieve the overall PDOs. As described in the Program Appraisal Document (PAD), DLIs’ achievement/performance prompt disbursement in accordance with the program design. The PAD outlined the strategic relevance of each DLI in relation to the achievement of the PDO, helping delineate the link between the DLIs and the Results Framework. The program had 10 DLIs, clearly presented and measurable along with the PAD’s disbursement arrangements and verification protocol and the Financing Agreement withdrawal conditions. Integration between the DLIs and the Results Framework. 40. The DLIs incentivized critical actions without which the PDO could not have been achieved. The three key PDO indicators were measured by numerical values, milestones, and percentages. The criteria for measurement of DLIs have been clearly outlined in the Results Framework using the IRIs. DLIs 1, 2, 3, 4, and 5 related to PDO indicator 1, to improve the business-enabling environment. DLI 1 specifically targets PDO indicator 1; Simplified business processes; reduction in the time required to start a business, deal with construction permit, and register property measures the aggregate time for a business to reach operations stage. The selection of PDO1 were inspired by the Subnational ease of doing business exercise that was conducted by the World Bank “Doing Business in Nigeria” that covered 36 states and FCT Abuja and measures progress since 2014 in four regulatory areas: starting a business, dealing with construction permits, registering property and enforcing contracts. By providing comparator benchmarks, it incentivized states to improve through the image/competitive pressure providing by benchmarking. The PDO indicator measured user feedback from investors on the time taken to carry out these processes within the State and ensured line MDAs responsible for attainment of this target were developed and equipped to sustain the success recorded. 41. DLIs 2, 3, 4, and 5 had outcomes that further indicated an improved business environment in the state and DLIs 6, 7, 8, 9, and 10 relate to Results Area 2: Strengthening fiscal management and accountability which covers PDO Indicators 2 and 3. 42. DLI 8 focused on increased budget credibility through an increased capital expenditure execution rate that demonstrates the capacity of Kaduna State to increase public investment and better management of public funds. DLIs 6 and 7 further supported the PDO and demonstrated the extent of the government’s commitment to sustainable and increased revenue generation and strong financial management (FM), including budgeting, internal controls, audits, and financial reporting. The DLIs’ focus on improving tax collection through expanding the tax net ensured availability of funds for future capital projects. 43. DLIs 9 and 10 related to PDO Indicator 3: Increased fiscal accountability. DLI 10 specifically addressed improved government responsiveness to citizen’s feedback on fiscal performance; Page 22 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) responsiveness was indicated by the percentage of capital projects improved in response to citizens’ feedback received via all platforms. Incentives for Improving Institutional Performance 44. PforR financing was US$350 million with each of the 10 DLIs allocated US$35 million. The distribution of amounts between DLIs and the rationale underpinning their allocation were agreed with the client during the preparation of the Program. Despite the time lag of program effectiveness of almost two years, the state was committed to achieving the PDO and embarked on the necessary reforms before the effectiveness date and was able to access advance payment due to the level of commitment showed toward the program. 45. The time lag adversely affected the completion of two original DLIs (DLIs 4 and 5) which would have required more time. The 22-month delay in effectiveness resulted in the restructuring that removed the final step for two DLIs: on DLI 4, achieving commercial closure of a PPP transaction was dropped, and for DLI 5, the social audit to verify the implementation of FRILIA was dropped. Both changes, while they were logical and appropriate given the significant delay, partially reduced the strength of the two respective DLIs. It did not allow the Program to ensure and measure implementation of two key reforms: the new PPP framework and the new FRILIA framework on land. 46. The incentives provided by the DLIs strengthened the momentum to achieve results. For example, the increase in the number of registered taxpayers helped boost IGR generation. The DLI incentives contributed to the state’s drive to complete the projects and set up a functional citizens engagement platform. The program provided the right triggers for institutional performance with specific outputs annually e.g., amendments to key laws, establishment of key agencies by law (KADIPA, KADGIS and Kaduna Planning commission), Development of the legal and institutional framework for PPP and FRILIA that contributed to the eventual PDO outcomes. Rating of Overall Relevance Rating: High 47. The PDO remained relevant throughout the implementation of the Program and was aligned with the Federal Government’s public administration reform priorities and complemented the Kaduna state government’s Long-Term Plan and Strategic Vision outlined in the KSDP (2016–2020) which are in line with the World Bank’s development objectives in Nigeria’s public administration. There were minor shortcomings in the relevance of the DLIs. B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective or Outcome The summary of the Results Framework can be found in annex 1 based on information reported in the December 2021 IVA report. 48. This section of the Implementation Completion and Results Report (ICR) will focus on how specific activities and interventions under the PforR as outlined in the theory of change (Figure 3) contributed to the achievement of the PDO while recognizing the contribution of other partners and Page 23 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) projects where applicable. The assessment of the PDO is organized around the two result areas: (a) improve the business-enabling environment and (b) strengthen fiscal management and accountability which has two PDO indicators. All the three PDO indicators were achieved, with all indicators exceeding their target value, as presented in table 4. Table 4. Status of Achievement of PDO Indicators at Exit PDO Target Achieved Status & PDO Indicator Name indicator Baseline Value Value Remarks Simplified business processes (measured by the reduction in the time required to start a 1 248 days 132 days 72 days Exceeded business, deal with construction permit, and register property DLI 1) Increased budget credibility (measured by two indicators: 154.10%., 2 IGR outturn [IGR actual versus 42%, 50% 66%, 70% Exceeded 87% budgeted] and capital execution rate DLI 6 and 8) Increased fiscal accountability (measured by improved 20% of 22% of government responsiveness to capital and capital citizen’s feedback on fiscal infrastructu projects performance: responsiveness is re related improved 3 indicated by the percentage of - projects Exceeded in capital projects improved in improved response response to citizens’ feedback in response to citizens’ received via all platforms (both to citizens’ feedback conventional and social media feedback DL1 10) Results Area 1: Improving the Business-Enabling Environment 49. Regarding the improvement of the business environment, all the results areas were achieved with four of six Intermediate Results Indicators (IRIs) exceeding their targets. For PDO Indicator 1 to simplify business processes measured by the reduction in the time required to start a business, deal with construction permit, and register property, Kaduna automated the business premises registration process and the property registration process which reduced time significantly from 248 days to 72 days exceeding the target of 132 days set (table 5). 50. The cost of registering property (through Certificates of Occupancy) was significantly reduced. Stamp duty was reduced from 3.0 percent to 1.5 percent, and registration fee which was 3.0 percent of Page 24 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) property value was also reduced to a flat fee of NGN 80,000 (US$363).5 This measure also eliminated four procedures that were previously conducted to assess the property value and determine the fees. Kaduna authorities also introduced the option of paying the fees using a credit card at KADGIS and simplified the flow of internal clearances, making the issuance of the Governor’s consent much more efficient. Data from the IVA report shows getting the consent now takes less than 20 days—less than half the time it took in 2014 (77 days). 51. Kaduna also made progress on the quality of land administration infrastructure. KADGIS scanned all land titles as well as maps and is making noteworthy progress in digitizing them so they can be part of a searchable database. Further, several application forms, fees, and guidelines that previously had to be obtained in person are now available for download from the KADGIS website. This reform also helped with the SPRP in the state where the cost of CofO was set at NGN 5,000, NGN 2,500 for women, and NGN 8,000 for multiple owners. Multiple ownership registration was a new introduction by KADGIS which helped the state meet and exceed the target of 40,000. A total of 69,064 new CofOs were registered under the program. 52. The state leveraged its annual KADINVEST summit to generate interest and sign Memorandums of Understanding (MOUs) for investment in the state. The Kaduna Investment Promotion Agency (KADIPA) identifies 6 levels for prospective investors: Level 1 = initial enquiry, Level 2 = detailed enquiry (including site visit), Level 3 = negotiations / signature of Memorandum of Understanding (MoU), Level 4 = due diligence and facilitation of implementation, Level 5 = operations initiated and Level 6 = aftercare. MoU represents Level 3 in KADIPA investment tracking. This indicator tracked new MoU, according to KADIPA MIS, excluding mining investments. Under the program, 33 MoUs were signed between the state and investors, exceeding the target of 32. In addition, Kaduna entered into agreements with other donor partners based on the strength of achievements from the PforR that attracted interest in supporting further reforms. Lastly, 23 investors reached operations stage or aftercare in Kaduna State, with KADIPA facilitating those investments. The textbox below outlines some of the crucial actions undertaken by KADIPA to ensure successful investments in the state. KADIPA as the anchor for reform in Kaduna State One of the initial steps the government took was to centralize reforms by creating KADIPA which not only serves as a One-Stop Investment Centre for businesses but also promotes, facilitates, and coordinates investments through PPP’s, privatization and commercialization in the State by coordinating all the activities of MDAs in the business environment. KADIPA provides support for investors and citizens at large in Kaduna State as follows: • Waiving of premiums • Extension of land tenure depending on investment size/capacity. • Discounting ground rent rate and special discount on planning permissions • Provision of primary infrastructure by the State Government • A Liaison officer for priority investments that follows up with KADGIS, KADIPA, and other MDAs in the state to facilitate any required permits. • A formalized aftercare and grievance redress mechanism. • Stakeholder engagements take place quarterly with an open communication channel for investors to email or dial in any time. 5 Typical value based on the size of property in the Doing Business case study scenario was NGN 333,627. Page 25 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) • “Rapid Response” squad that responds to emergencies for investors on-site. The KADIPA law was passed December 2015 and started operations in the first quarter of 2016. Process mapping of agencies concerned with ease of doing business in the state and onboarding them to agree on an Ease of Doing Business (EODB) charter was completed in conjunction with GEMS3, EU and other DFIs in 2016. Some of the reforms undertaken by the IPA since inception: • Kaduna Investment Forum (KADINVEST) – an annual investment forum with potential investors providing linkages between large scale companies and SMEs in the state • Publishing a compendium of investment opportunities in the state – Work with the Oxford Business Group providing a deep dive into investment activities in the state and an overview of the priority sectors • Public Private Partnership policy approved (manual in place) – a guide to structure better PPP especially in the drive to develop infrastructure. July 2020 • Engagement on social media platforms (Twitter – 2016 Facebook - 2016 YouTube- 2020 Instagram – 2020) helping with disseminating the plans of the government and to provide linkages for SMEs to larger companies • Creation of the dashboard that shows the progress of each MDA towards the goals set out in the EODB charter allows for better monitoring of projects (October 2020) • Aftercare desk to cater to investors already invested with view to helping increase investment – set up 2019 The State also simultaneously embarked on broad consultations with development partners, civil society organizations and the citizens to gain support and vital feedback on reform initiatives. They also give priority to small and medium-scale business owners. Some incentives such as tax holidays were introduced to enable them to have a strong footing. Subsequently they organized KADINVEST an investment forum to engage with potential investors in the state. EoDB charter (attached) signed during the annual Kaduna Economic and Investment Summit 2.0 in 2016 by seven of the lead reform agencies (Kaduna Internal Revenue Service, Ministry of Commerce, Industry & Tourism, Kaduna Investment Promotion Agency, The Urban Planning Development Agency, Environmental Development Agency, Kaduna Geographic Information System and the Ministry of Justice) set out measurable objectives, transparent action points, accountability for MDAs as well as ensuring continued interagency collaboration. It committed to regular reviews and improvements of all service delivery and to continually seek views of investors through different channels to review the service charter. 53. DLI 4 IRI 1.5: Development of the legal and institutional framework for PPP was achieved. This DLI was restructured, and the requirement for one PPP with low E&S risk meets commercial close was dropped as a target. Detailed feasibility studies for one transaction with low E&S risks were, however, completed and Project Facilitation Fund established and seed funding of NGN 60 million provided. The ICR was not able to verify the implementation of the new PPP framework on the ground, as this is still ongoing and has not yet materialized. 54. The FRILIA was developed in line with approved principles and through a consultative process. The FRILIA law was enacted in Kaduna State on September 30, 2021. This area has become of interest to many other states, with Ogun State and others looking to Kaduna State for lessons and peer learning. Page 26 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) 55. In addition to the PDO indicators and the DLIs, two further IRIs were under Results Area 1 for which the targets were exceeded (Table 7). Table 5. Results Area 1: Improve the Business-Enabling Environment Status PDO- DLI Achieved Indicator Name Baseline Target Value and Level or # Value Remarks IRI 1 Simplified business processes: 248 days 132 days 72 days Exceeded PDO 1 reduction in the time required to start a business, deal with construction permit, and register property 2 Implementation of systematic 0 40,000 69,064 Exceeded IRI 1. 2 property registration program (SPRP): number of new CofOs, issued. 3 Strengthening of investment 0 32 33 Exceeded IRI 1.3 promotion: number of MoUs signed between investors and KADIPA 4 Development of the legal and Incomplete Increase the Yes Achieved IRI 1.5 institutional framework for PPP legal and capacity of institutional Kaduna State framework to undertake PPP transactions 5 Development and No FRILIA Enactment of Yes Achieved IRI 1.6 implementation of FRILIA FRILIA Results Area 2: Strengthen Fiscal Management and Accountability 56. For strengthening fiscal management and accountability, the two PDO indicators both exceeded target value: PDO indicator 2: Increased budget credibility (measured by DLI 6 IGR outturn [IGR actual versus budgeted] and DLI 8 capital execution rate) Table 6. The PforR supported the implementation of the Tax Codification and Consolidation Law that consolidated all taxes payable in the state into one law. Presumptive tax was introduced, which brought in revenue from a previously untapped informal sector and had a large impact on IGRs. This law also eliminated cash payments at all government agencies, thereby increasing revenues through better tracking and efficiency. 57. Other reforms included online registration for PAYE and online filing of taxes. These reforms meant that despite the statewide six-month lockdown at the onset of the COVID-19 pandemic, Kaduna State was able to sustain the increase in IGR outturn while increasing capital expenditure execution rate. In addition, Kaduna improved institutional capacity to register taxpayers by introducing public service on wheels, an outreach program that not only sensitized citizens on reforms completed but also was used as a vehicle for tax registration drive that helped the state exceed the target for DLI 7 by more than 150 percent. Page 27 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) 58. For DLI 9, the state instituted e-procurement in 16 of its Ministries, Departments and Agencies, with information on all procurements publicly available and with a competitive process instituted for all procurements. E-procurement is one tool to help mitigate fraud and promotes integrity and transparency in the government’s procurement system which can be one of the biggest avenues for fraud in public service. 59. PDO indicator 3 measured increased fiscal accountability through improved government responsiveness to citizen’s feedback on fiscal performance. Responsiveness was indicated by the percentage of capital projects improved in response to citizens’ feedback received via all platforms (both conventional and social media) in DLI 10. The target set was exceeded. 22% of capital projects improved in response to citizens feedback through the ears and ears project implemented by the state. Additionally, Inputs were received via social media handles and WhatsApp (see annex 5 for further details). The state also maintained a real-time dashboard at the budget and planning commission which monitored the status of capital projects across the state that would hold contractors accountable to the timelines for completing works (Figure 5). Figure 5: Snapshot of the Eyes and Ears platform Table 6. Results Area 2: Strengthen Fiscal Management and Accountability Status PDO- DLI Indicator Name Baseline Target Value Achieved Value and Level or # Remarks IRI 6 Increasing IGR outturn 42% 66% 154.10%6 Exceeded PDO 2 6 2020 IGR Outturn (%) = Actual (96,996,558,000) ÷ Budget (62,947,242,000) = 154.10% Page 28 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Status PDO- DLI Indicator Name Baseline Target Value Achieved Value and Level or # Remarks IRI 7 Improvement of tax 6,000 200,000 495,381 Exceeded IRI 2.1 collection: number of registered taxpayers with a TIN filing tax returns 8 Increasing capital 50% 70% 87% Exceeded PDO 2 expenditure execution rate 9 Increasing — Implementation • 16 MDAs registered Exceeded IRI 2.4 procurement of e- on the e- effectiveness procurement, procurement disclosure of portals. 958 contract awards, contracts’ disclosure procurement across MDAs. audit in 15 main • 17 procurement procuring MDAs audit reports produced across 15 MDAs. 10 Improved government — 20% of capital 22% of capital projects Exceeded PDO 3 responsiveness to and improved in response citizens’ feedback on infrastructure- to citizens’ feedback fiscal performance related projects improved in response to citizens’ feedback 60. In addition to the two PDO indicators and IRIs linked to the DLIs, additional outcomes were also achieved under Results Area 2 (Table 7). These are IRIs 2.2, 2.3, 2.5, 2.6, and 3.1. One exceeded target, three were fully achieved, and one was partially achieved as this is measured three years after project completion. Rating of Overall Efficacy 61. The overall efficacy is rated Substantial as the operation mostly exceeded or fully achieved its objectives. All ten DLIs achieved their target with eight DLIs exceeding the target. While nine of the thirteen IRIs also exceeded targets, five fully achieved targets and one partially achieved. Page 29 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Table 7. Overview of achievements for PDO indicators and IRIs PDO indicator 1 PDO indicator2 PDO indicator 3 PDO: Simplified High PDO: Increased Substantial PDO: Increased High Business Budget Credibility Fiscal Processes Accountability PDO Indicator 1 Exceeded PDO Indicator 2 Exceeded PDO Indicator 3 Exceeded DLI 1 DLI 6 and 8 DLI 10 IRI 1.1 Reforms Exceeded IRI 2.1 Exceeded IRI 3.1: Fully Achieved undertaken by Improvement of Increased fiscal Kaduna State tax collection: transparency of Government (core registered State and Local indicator) taxpayers (TIN) Governments filing tax returns (LG): disclosure DLI 7 of state and LG appropriations and budget execution audit reports IRI 1.2: Exceeded IRI 2.2 Fully Implementation Compliance of Achieved of systematic large (over 250 property employees) registration private and public program: new corporate entities Certificates of with Personal Occupancy Income Tax (CofOs) issued Administration DLI 2 (PAYE) system IRI 1.3 Exceeded IRI 2.3 Enhanced Fully Strengthening strategic planning Achieved investment and budgeting of promotion: public Memoranda of investment: Understanding MDAs whose signed between budgeted capital investors and expenditure are KADIPA aligned with DLI 3 Sector Implementation Plans (SIP) Page 30 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) PDO indicator 1 PDO indicator2 PDO indicator 3 IRI 1.4 Investors Exceeded IRI 2.4: Increased Exceeded that reach procurement operations stage effectiveness: or aftercare in main procuring Kaduna State with MDAs KADIPA implementing e- facilitation procurement, disclosing information on contract awards and conducting procurement audits DLI 9 IRI 1.5 Fully IRI 2.5 Timely Exceeded Development of Achieved payment of the legal and contractors by institutional public entities: framework for arrears of PPP payment to DLI 4 contractors as percentage of appropriation IRI 1.6 Fully IRI 2.6 Improving Partially Development and Achieved performance achieved implementation information on of a Framework service delivery: for Responsible sector programs and Inclusive evaluated after Land-Intensive three years of Agricultural implementation Investments (FRILIA) DLI 5 C. JUSTIFICATION OF OVERALL OUTCOME RATING 62. The overall outcome rating for the Program is Satisfactory with minor shortcomings associated to the restructuring in the PforR’s achievement of its objectives and in its relevance. This rating is based on an assessment of the overall relevance of the Program (PDO and the DLIs) and the efficacy rating of the objectives/outcomes. Although the PforR was restructured once, it did not experience any significant design changes and maintained its PDO, results areas, and theory of change throughout implementation; as such, a split rating was not warranted. The final rating noted in table 8 is based on the methodology provided in the World Bank Guidance Note on ICRs for PforR Operations issued on March 2, 2020. Page 31 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Table 8. Calculation of the Overall Program Outcome Rating Outcome Component Rating Overall Relevance High Relevance of PDO High Relevance of DLIs High Overall Efficacy Substantial Overall Outcome Rating Satisfactory 63. Despite a 22-month delay to project effectiveness and the lockdown in Kaduna State due to the advent of COVID-19, the government was still able to exceed well over two-thirds of its targets/outcomes. The Program succeeded in increasing fiscal accountability through incentives provided by DLIs, while PAPs provided the foundations necessary for the achievement of DLIs. In addition to the results that were achieved as measured by the outcome rating, it is worth mentioning that the program also had impact that went beyond those measured by the DLIs. (Table 9) Table 9: Summary of Key Outcomes and impact for Kaduna State, DLIs and beyond Key Impact highlights Outcomes Land reform – • Simpler, cheaper and more transparent process for land registration. Systematic • At last count in December 2021, just over 70,000 households obtained their land titling Certificate of Occupancy (CofO) from a baseline of zero in 2016. This is the and largest database of registered owners in the country of any state facilitates automation addressing land disputes. • Potential future income for the state through tenement rates. Before 2015, less than a billion Naira is being generated cumulatively. 2016 – 2017 more than 1 billion Naira was realized, 2018 – 2019 more than 2 billion Naira was generated. Going forward the State can generate more than 3 Naira billion yearly.10 • The whole state is now mapped using GIS, which will improve future administration of CofOs in the state. • The enacted FRILIA law can reduce land disputes and displacements without proper compensation or settlement • Stakeholder engagements have been continuous Investment • There have been 5 editions of the Kaduna Investment Summit (KADINVEST) promotion which allowed the state to showcase the improvements they’ve made, and and several states have come to Kaduna for peer learning. Most importantly, Transparency Kaduna has attracted more investment than before, despite insecurity. in processes • KADIPA has generated over 2bn USD in investments for the state since it was established in 201611 • By 2018 Kaduna was Ranked number 1 in the subnational ease of doing business. • Increased employment (in Q1 2022 KADIPA projects have generated over 10,000 direct and indirect jobs)12 Page 32 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Faster • Quicker and less costly set up for businesses. OLAM’s set up of the Kaduna permitting factory took 9 months from start to end as KADIPA were able to assist to process quicker turnaround times. The time taken to get business permits was reduced from 105 days as recorded in the WB Subnational doing business report 2018 to 32 days in December 202213 • More businesses are applying for their premises permits (2-3 times the volumes) which are now processed online and a copy sent to the business’ email all within a few minutes. At project appraisal in 2016 took 2 days and had to be done in person. More • With an emphasis on training and knowledge-based leadership, the civil knowledge led servants take regular tests to ensure that the service being provided to the civil service public is of the highest standards. • Youngest head of agency in the country (KADIPA) due to selection process based on merit and an understanding of the requirements of the agency Tax collection • KADIRS automation allows PAYE Registration, TIN Registration and filing of Tax Returns to be done online. Other payments can also be made online including Vehicle registration – renewals • Kaduna’s taxpayer base as of March 2022 is 603,612. Prior to the PforR this number was less than 2,056. • Revenue collection has grown from NGN 23,024,000,939.83 in 2016 to NGN 52,859,708,980.65 in 2021 • Automation meant IGR stability for the government and the ability to fulfil obligations even during the COVID19 pandemic lockdowns.14 Source: data obtained by Kaduna MDAs that participated in the PforR D. OTHER OUTCOMES AND IMPACTS (IF ANY) Capacity Strengthening 64. Capacity strengthening was an integral part of the program. Before Program implementation, capacity gaps had been identified across program lead agencies responsible for DLIs. To address this challenge, the Program identified a series of capacity-building training courses. For instance, Kaduna State Public Procurement Authority (KADPPA) was required to conduct procurement audit for agencies at the end of every financial year. However, at the first instance, the agency lacked the capacity to handle the exercise amicably. Consequently, the Program organized a capacity-building training for the agency, and before the program closed, the agency was able to conduct the procurement audit and trained other MDAs on the same. Community Sensitization on Government Activities 65. The Program adapted to potential challenges that would be faced with the communication around some policies and programs. These policies and programs were directly tied to Program implementation and will affect the overall outcome of the Program. To address this challenge, the Page 33 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Program embarked on large media sensitization on government programs and policies. The development and implementation of the FRILIA is one program which has benefitted from this strategy; the reduction in the number of days to start a business can be attributed to the suggestions made by callers in such live radio-call programs. Gender 66. The program aimed to have an impact on the social welfare of the most vulnerable citizens of the state. Kaduna recognized women were disproportionally represented in this group, and through the PforR, three areas were identified where women could benefit and thus promote gender equity: (a) implementation of the SPRP, (b) strengthening of investment promotion, and (c) development and implementation of the FRILIA. 67. Through the Systematic Land Titling Registration Program, Kaduna was able to deliver support to women by allowing for subsidized registration fee for women. Land titling registration fee was set at NGN 5,000 for single registrations by men and at NGN 2,500 for women. Multiple owners could also register for NGN 8,000. According to the state’s statistics, as of May 2022, a total of 26,467 women have registered a CofO either as an individual or jointly since the start of the program, representing 38 percent of all CofOs registered. 68. Regarding investment promotion, KADIPA developed and implemented a strategy to maximize the benefits-sharing potential of private investments. This strategy involved, in particular (a) encouraging out-growers’/off-takers’ arrangements, (b) developing a database of small and medium enterprise suppliers, and (c) developing a job marketplace. In that context, KADIPA put in place measures to start tracking direct and indirect jobs created by private investments, tracking, specifically, jobs for women. 69. The FRILIA principles which were adopted by the state stipulate that “particular attention should be paid to the engagement and needs of vulnerable groups among those displaced, especially those below the poverty line, elderly, women and children, people with disabilities, economically or socially disadvantaged, or other displaced persons who may not be adequately protected under law.” In future dealings on land matters, those socially and economically disadvantaged receive adequate protection through FRILIA. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 70. The objectives of the program were realistic and clear as they aligned with and supported specific areas of the KSDP. Although some targets had to be revised due to the Federal-level delays affecting effectiveness, the Program featured well-designed PDO elements, intermediate indicators, and DLIs. The Program Action Plan was well sequenced with the DLIs and included realistic time frames for each action. 71. The Results Framework was well designed overall. It included indicators that were operationally significant and easier to monitor. All DLIs were included in the Results Framework (either as PDO Indicators or as IRIs). The established baselines were clear and realistic. Overall, the targets established were generally in line with the Program objective and the borrower’s reform agenda and capacity to implement. Page 34 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) 72. DLIs included a clear protocol and methodology for monitoring and verification through independent third-party verification. It was appropriate to assign responsibility of the verification protocol to the Planning and Budget Commission. An important dimension to note is that this was the first subnational PforR, which meant there was limited institutional capacity for M&E. The delays in reporting did not affect the achievement of the PDO. 73. Some DLIs would have benefitted from clearer definition and measurability from the start. During the MTR in September 2020, further clarifications were made to DLI 2 to ensure that (a) CofOs are not counted at the point of the Governor’s signature but are only counted once they have been duly registered as legal documents by the registrar and (b) all new CofOs issued under all SPRPs under the state counted toward this DLI. These did not negatively affect, or reduce the strength of, the DLIs themselves. 74. The MDAs targeted for this program reflected the focus on improving service delivery and the overall business environment to facilitate increased investment in the state. The departments such as KADIPA, KADGIS, KASUPDA and KADIRS covered by the Program constituted the bulk of state-citizen interaction and were chosen to make service delivery improvements more visible and impactful. 75. The overall risk of the Program was adequately assessed as High. The level of risk was rated High for five out of the nine categories: Political and Governance, Macroeconomic, Institutional Capacity for Implementation and Sustainability, Stakeholders, and Conflict. For four out of the nine categories, the level of risk is rated Substantial: Sector Strategies and Policies, Technical Design of Program, Fiduciary, and Environmental and Social. Appropriate mitigation actions were identified to minimize these risks, including (a) fast-tracking of reforms in 2017–2018 by the state government to ensure reforms were not affected by the political cycle, (b) strengthening of capacity in institutions to ensure sustainability, (c) the openness of the KDSG to learn from the experience of other Nigerian states or countries and the available advisory and capacity support to that end, and (d) civil service reform efforts of the KDSG to mitigate against stakeholder risks and resistance from within the government to the reform agenda. B. KEY FACTORS DURING IMPLEMENTATION (a) Factors Subject to the Control of the Government and/or Implementing Agencies 76. The effectiveness date of the Kaduna PforR—the first subnational loan to be approved by the Nigerian government (Ministry of Finance)—was delayed as it was not originally included in the national borrowing plan. Subsequent political disagreements meant that it took 22 months for the project to become effective after Board approval by the World Bank. These delays were political in nature and were not foreseeable during preparation. 77. However, an important factor that made the Program implementation successful was the proper coordination of all relevant stakeholders under one roof at Kaduna State level. Clear roles and responsibilities of different stakeholders were known, which helped avoid administrative barriers that slow implementation. The Program Steering Committee chaired by the Kaduna State Governor appeared strong and gave the necessary support to the Program Implementation Unit (PIU). Implementation was efficient as the state leadership showed commitment and priority to the achievement of the program objectives. The PIU was highly skilled and had the requisite capacity and coordination needed to manage a PforR with no experience. It supported the day-to-day implementation of the Program activities, facilitating coordination across different government departments. Both political commitments—going back to the highest echelons of power—and features of good governance have helped the Program reach its successful conclusion, achieving and mostly exceeding all targets. Page 35 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) 78. Overall, there was broad organizational capacity within the MDAs except for two areas: PPPs and FRILIA which were previously identified for additional support from the Department for International Development (DFID) United Kingdom through the LINKS program. There was clear accountability, and due to the civil service reform efforts, there was an influx of strong talent into public service which was among the key factors that positively influenced the success of the PforR. The state was adept at mobilizing skilled human resources for project implementation, and through the Program’s multistakeholder approach, the team was able to fully implement all program deliverables. 79. Before program effectiveness, Kaduna put in place relevant legislation to make the project a success and promote sustainability. Examples include the Kaduna State Investment Promotion Agency Law, 2015; Kaduna State Public Procurement Law, 2016; Kaduna State Tax (Codification and Consolidation) Law, 2016; and Kaduna State Agricultural Development Agency Law, 2016. During implementation, the judiciary continued the review of over 80 laws relating to the PDO and beyond. Details on the laws and amendments which worked to improve the business environment are listed in Annex 5. 80. The PIU and MDAs were well-equipped with functioning information technology solutions such as a strong internet connection and reliable computers. This allowed work to continue during the COVID- 19 pandemic. With the pandemic requiring most staff to work remotely, the Program was able to continue. The different MDAs were able to connect remotely, and the PIU efficiently moved to a virtual setting. Communications between the Bank and implementing MDAs was seamless, and a virtual setting became the norm for most. This was a key success of this Program, as little time was lost and progress towards achieving the DLIs continued. (b) Factors Subject to the Control of the World Bank This section will be limited to discussing the adequacy of implementation support and adequacy of reporting. A detailed discussion of the World Bank’s performance can be found in section IV. 81. The World Bank team maintained an active and close engagement with Kaduna state government, ensuring supervision missions took place on time and provided the PIU and the state with adequate support and guidance. During the World Bank’s missions, it was identified that some of the DLI targets will likely not be achieved due to time constraints attributed to the 22-month effectiveness delay. The World Bank team was able to propose restructuring of such DLIs and then increase targets for overachieving ones. This was flagged in advance and allowed the Program to continue strongly towards completion. 82. The World Bank team’s quality of support and reporting met the required standards. The borrower expressed its satisfaction with the World Bank’s critical advice and timely assistance. One clear example of its proactive approach was in identifying the gaps in the FRILIA and PPP indicators, understanding a restructure was needed given that the delays in effectiveness affected the DLI deliverables, applying for other sources of funding for technical assistance for those DLIs, and conducting weekly check-ins and training sessions with the Kaduna team. This move saw the Kaduna PforR achieve 100 percent disbursement by its closing date. 83. From preparation to program closing, the program was led by four different task team leaders. These adjustments, however, did not interrupt implementation momentum as the handovers ensured continuous and seamless support to the counterparts. Each TTL left a detailed handover note to their successor, and the rest of the core team participated in their onboarding. Page 36 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) (c) Factors outside the Control of the Government and/or Implementing Agencies 84. The worsening security situation and COVID-19 presented significant challenges for the implementation of the program. Restrictions on travel due to the COVID-19 pandemic meant face-to- face missions could not take place and adjustments had to be made on the Government and the World Bank sides to accommodate virtual missions. The three-month statewide lockdown slowed down the pace of reform for certain DLIs due to in-person interactions needed to achieve them such as the SPRP. Generally, the pandemic also triggered a priority shift for all governments toward the provision of health care services, and many state programs were on hold for months. Second, the worsening security situation in Kaduna and its surroundings also made travel to/from Kaduna challenging for both the Bank team and PIU team. The combination of both the security situation and pandemic meant that a virtual setting became the default setting for the last year of the Program. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION M&E Design 85. The PDO, key outcomes to be achieved, and associated indicators included in the Results Framework were found to be consistent, well designed, and effective for tracking progress. The PforR operation was designed to support specific interventions, with five main implementing agencies (KADIPA, KADGIS, KADIRS, Planning and Budget Commission, and KADPPA), instrumental in fostering improvements in terms of effectiveness and efficiency in the Kaduna’s overall reform program. The Results Framework was prepared according to the World Bank’s guidelines. DLIs were robustly designed and carefully selected to provide incentives on critical roadblocks to improving the Program’s effectiveness, efficiency, and sustainability. Additionally, institutional strengthening activities set for the implementing agencies were specified in the PAP and via the IRIs, and appropriate targets and results were reflected in the Results Framework. 86. The PforR program manager, under the Planning and Budget Commission, was responsible for the M&E of the PforR and gathered the M&E information from the different lead agencies of the PforR. The Federal Ministry of Finance, through the PforR Steering Committee, was involved in the M&E of the Program. The PIU had an M&E officer, who established and maintained the M&E system. The PIU had experience with M&E from a previous World Bank project (Public Sector Governance Reform and Development Project) and had the necessary capacity to develop reliable M&E data. However, the officer assigned to the task of collating information from the agencies was too junior to persuade heads of agencies to submit regular progress reports which was raised and rectified during the midterm review meeting. 87. An independent verification agent (IVA) was appointed to verify the data presented by the PIU from the lead agencies annually. All data were generated by the Kaduna state government apart from DLI 1 where data were verified using methodology by the subnational Doing Business team (SNDB). The use of a World Bank data collection team for verification purposes can be seen as problematic. On the one side, the SNDB team possess the capacity and know-how to ensure quality but can also expose the data collection exercise to appearances of a conflict of interest. Additionally, this left the verification process vulnerable to internal data methodology changes at SNDB that could have jeopardized the data Page 37 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) collection for DLI 1 The use of SNDB was done in practice but not a strict requirement by the verification protocol which allowed for a government led data collection exercise to be done when SNDB new engagements were discontinued following the discontinuation of the global doing business report in 2021. M&E Implementation 88. M&E implementation was reasonable. The verification protocol in the Program was overall effective. DLI verification protocols were detailed. The data were collected and analyzed systematically, albeit in some cases with delays by the PIU, and indicators that were in the Results Framework were measured and reported in Implementation Status and Results Reports (ISRs). Annual reports by the IVA were timely available and consistently used as the main basis for authorizing the World Bank’s disbursements upon the successful achievement of DLI-associated targets. Verification reports were also found to be consistent with implementation agencies' information and the World Bank’s internal reporting system. 89. The early shortcomings in M&E implementation in collating timely reports under the PforR did not compromise the achievement of its desired outcomes. However, it is worth noting that in the last year of the PforR implementation, the Doing Business report was discontinued, which also led to the SNDB team no longer being available to collect the data on DLI 1. Additional training had to be provided to KADIPA and the Bureau of Statistics on the methodology of the Doing Business indicators to enable effective data reporting for DLI 1 as data were previously gathered by the SNDB team on behalf of KADIPA. M&E Utilization 90. All PDO-level indicators, including DLIs, were consistently and regularly tracked based on good quality data. The data provided by implementation agencies were verified by IVA annual reports and World Bank field/virtual missions. Data on the performance of the Program and results, or lack thereof, were used to inform program management and decision-making. Importantly, the data were used to engage the Government on reforms that were not moving and as a result posed a risk to the achievement of the development outcome. Justification of Overall Rating of M&E Quality 91. The overall M&E quality is rated Substantial. The existing government system for M&E of the Program was sufficient to assess the outcomes with 13 intermediate indicators to capture most program outputs. M&E was data-driven and informed the decision-making process. It was consistently executed by the PIU and the IVA. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental and Social 92. The environmental and social risk was adequately rated Substantial. Kaduna has a long history of ethno-religious violence which has seriously affected intercommunal relations. Since mid-2016, southern Kaduna has become a major flashpoint, and violent intercommunal conflicts have intensified, with killings and reprisal killings. Many of the violent conflicts are said to be linked to disagreements between pastoralists and farmers over the use of essential resources such as farmland, grazing areas, and Page 38 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) water. Historical ethno-religious divides, rural banditry, and social media contribute to further escalation of events. The Program had adequate mitigation measures to avoid exacerbation of such contextual conflict risks. 93. The KSDP was aimed at increasing social spending through increased tax revenues and economic growth, as well as direct and indirect job creation through increased levels of private investment. Most of the Program’s DLIs were linked to government systems that improve the business- enabling environment as well as fiscal sustainability, transparency, and accountability The Environmental and Social Systems Assessment (ESSA) concluded that most of these systems will have minimal negative E&S effects. There were also no adverse effects from construction. A Strategic Environmental and Social Assessment (SESA) was prepared to support the Kaduna State Infrastructure Master Plan (KADIMP) (2018–2050). 94. Land-related risks were among the key social risks identified by the ESSA but were well mitigated by the anchoring of FRILIA as a DLI. The SPRP went through an assessment by a land administration specialist, who concluded that that the program was well governed and resourced. The PforR promoted Kaduna State private investment efforts and introduced a stronger stakeholder engagement and land acquisition process through the development and ongoing implementation of the FRILIA as well as the development of a PPP legal and institutional framework that appropriately manages E&S risks. By anchoring the adoption of the FRILIA principles into the DLIs themselves, the Program was able to mitigate the land-related risks of this operation. FRILIA principles are targeted at ensuring land access procedures are carried out in a safe, responsive, and environmentally and socially responsible manner, with buy-in for all necessary stakeholders, essentially promoting community participation. Fiduciary 95. Fiduciary risk was adequately rated as Substantial. The main issues identified during implementation included delay in the preparation of risk-based internal audit reports by the MDAs in the state and oversight function by the State House of Assembly. These issues were eventually rectified. There were no outstanding issues relating to the risk-based internal audit report and the oversight function of the Kaduna State House of Assembly has improved. FM performances in the early part and midpoint of the Program were Moderately Satisfactory and became Satisfactory at the last virtual implementation support mission carried out in September 2022, up till closure. 96. There were several areas of strong performance by the Kaduna state government in key aspects of FM. Budget estimates and Program Expenditure Framework formed the basis for the implementation of program activities. Budget performance was adequate. Financial reporting under the Program was Satisfactory. The State Accountant General, on an annual basis, prepared financial statements with content and quality acceptable to the World Bank. The internal control mechanism from the Program’s inception to its closure was strong. Accounting staff in the Office of the State Accountant General provided financial function from inception to the end of the Program. The accounting staff were well qualified and experienced. 97. At the inception and earlier part of the Program, the internal audit function was weak with delays in the preparation of the risk-based internal audit report. Midpoint into the Program, risk-based internal audit reports were prepared and delivered to the World Bank but with quality issues and some delays. To ensure a more acceptable quality risk-based internal audit reports, staff of the Inspectorate Department in the Office of the State Accountant General were trained. 98. External audit and oversight functions were carried out in accordance with section 125(5) of Financial Instruction and the Financing Agreement. The state’s audit was conducted following the Page 39 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) government-established procedures. During the entire life of the Program, regular external audit reports and management letters were submitted to the World Bank on time, with content and quality acceptable to the World Bank, and the performance of the Office of the Auditor General was proven satisfactory. It is noted that the final audit report together with the management letter (for the year ended 2021) is expected to be delivered by September 30, 2022. 99. The oversight function of the Program was done by the Kaduna State House of Assembly. In the earlier part of the Program, oversight function by the state’s assembly was weak and slow; however, the function became more effective from 2020 to the Program closure. 100. The flow of funds from inception to closure was adequate. Disbursement of funds in the life of the Program was Satisfactory. During the Program, funds were disbursed directly by the World Bank to the TSA opened for the purpose under the Accountant General’s Office based on DLIs achieved. From inception to closure (December 31, 2021), the disbursement of funds stands at 101.40 percent. C. BANK PERFORMANCE Quality at Entry 101. The program was conceived through consultation and alignment with Kaduna State’s objectives. The World Bank team employed due diligence in basing the program on a solid diagnostic foundation of Kaduna’s development priorities as outlined in the KSDP, and this remained highly relevant in assuring the commitment of all key stakeholders throughout the program implementation period. Systematic operations risk ratings were all adequate at the planning stage. Overall support of the World Bank during the Program Implementation has been satisfactory in assuring quality both at entry and during Program Implementation. The challenges posed during program design such as technical assistance for PPPs and FRILIA became apparent during implementation when the external technical assistance that would address these challenges housed within DFID’s remit did not materialize due to restructuring by the British Government that cut funding significantly to the LINKS program. In addition, some of the DLIs needed more specificity which needed to be further clarified. The technical assessment was detailed and comprehensive. The Program’s success has clear developmental implications both in the short and medium terms for Kaduna as the DLIs were well defined and the key agencies that were identified for implementation were well engaged in the progress from the initiation. Key baselines were obtained, and gaps were well-identified at appraisal. Risks associated with each Program area were also well detailed in the assessment. Quality of Supervision 102. The World Bank’s performance in ensuring quality of supervision is rated Satisfactory. The World Bank team maintained a satisfactory level of commitment to the program despite several changes of task team leaders from program appraisal to conclusion. The task team conducted four supervision missions, that is, an average of two missions per year, showing attention in addressing technical, safeguards, and fiduciary issues in collaboration with the PIU. The task team prepared aide-memoires after each implementation support mission, making MDAs timely aware of implementation issues, and suggesting possible remedies, in conformity with Bank policies. The ISRs were candid and realistic in their ratings of performance, both in terms of achievement of development objectives and project implementation. The World Bank team was able to adjust to the virtual missions and remain effective, and decisions were expedited. This commitment was underpinned by the physical presence of the World Page 40 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Bank’s Country Director in Nigeria, allowing for continuous interactions with the Kaduna State government counterparts, including the Governor. Regular update meetings with lead agencies and the PIU played an invaluable role in tracking program activities implemented by all key stakeholders. This made it possible to pivot when needed to achieve the program’s objectives. Justification of Overall Rating of Bank Performance 103. Overall Bank performance is rated Satisfactory. This is justified by the satisfactory quality of World Bank performance during project preparation and implementation with minor shortcomings and the satisfactory outcome of the program. The supervision reports were detailed and comprehensive, and they identified issues that required timely attention of key stakeholders in the Kaduna government team. Changes in the role of the task team leader took place without disrupting the World Bank team’s ability to provide timely implementation support. D. RISK TO DEVELOPMENT OUTCOME 104. Several achievements of the Program are likely to be sustained, while substantial risks remain. The most effective way to safeguard the progress made under the PforR is to ensure that good practices achieved are continuously followed. Even if more progress is not made, it would be difficult to undo the progress already established. For instance, the Kaduna government ensured that change was institutionalized by amending, enacting, and enforcing the relevant laws such as the laws that set up KADGIS and KADIRS while closing other avenues that presented duplications and rent-seeking opportunities. Further achievements on DLIs such as the number of registered taxpayers and CofO registration cannot be reduced even if interest in further registrations is reduced due to a change in government. This is, however, unlikely because the DLIs focus on improving tax collection through expanding the tax net ensured availability of funds for capital projects, and the program has demonstrated a positive revenue impact on the state. Further, the government’s e-procurement measures put in place in 16 MDAs under this program have had wider applicability to other projects, such as the Adolescent Girls Initiative for Learning and Empowerment (AGILE), since closing and continue to demonstrate its usefulness and effectiveness to the state’s fiscal stability. Another critical mitigation strategy to support sustainability was the PforR focus on accountability and citizens’ engagement which would generate social demand and pressure on state authorities and prevent reform reversal. It is hoped that citizens will continue to demand accountability even in the case of change of government. 105. The largest threat to the sustainability of this program is increasing conflict and violence. There has been an increase in the incidence of highway and railway attacks and increase in abductions which severely affect the flow of people and goods between the state and the rest of Nigeria. The state security council reports that in the first quarter of 2022, 1,389 people had been kidnapped by bandits and no fewer than 360 people killed. On March 28, 2022, there was an unprecedented attack on the Abuja-Kaduna rail line where bandits ambushed the train heading for Kaduna from the nation’s capital city after bombing its rail track. This attack happened only a couple of days after reports of unidentified gunmen invading the Kaduna airport, killing an official on the runway. Although good governance is in place, this severely impedes the overall progress made to the business environment in the state and the ability to continue to attract investment when citizens and state officials continue to be affected by violence. It will, no doubt, have a negative impact on investment in the State. Page 41 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) V. LESSONS AND RECOMMENDATIONS 106. The strong performance by Kaduna State has had the desired demonstrative effects for the rest of the country. This was the first PforR at sub-national level in Nigeria and despite high risk, absence of previous experience with PforR and constrains such as COVID-19 pandemic, the operation successfully achieved the development objective. Kaduna has subsequently been inundated with requests from other states to get an understanding of the setup and operations of KADIPA, KADGIS, KADPPA, and others. Annex 5 outlines the states that have undertaken peer visits and learning workshops with the state. 107. The introduction of new instruments requires a period of learning and adaptation. The Kaduna PforR is the largest operation the state had embarked upon, and the team tasked with the implementation of the program lacked implementation experience of projects of such caliber. Even though the PIU and lead agencies had to adapt and learn on the job, this did not affect the team’s performance. The program proved to be a rich learning-by-doing for all stakeholders involved. However, in future PforR instruments, the World Bank in collaboration with other technical partners should employ a rigorous technical session on program implementation to build the capacity of the PIU and other stakeholders on program deliverables and strategy for implementation. Future PforR design could consider peer learning and experience sharing as a means to strengthen the capacity of implementing partners. For instance, other countries or subnational entities that have successfully implemented a PforR could provide the necessary guidance to upcoming projects on the implementation strategies adopted by the program during implementation, lessons learned, and recommendations. The resolution to provide just-in-time technical assistance and regular supervision meetings that were required for business environment reforms, PPP, and FRILIA in the latter part of the program enabled for the successful execution on those DLIs. 108. On-the-ground support and the ability to make frequent trips to the state provided a solid understanding of the challenges and allowed the team to go relatively fast and build a rapport with the state counterpart, which meant decisions were often expedited. From the outset, there was ownership and buy-in from the state due to the ambitious plans already laid out by the state which the program keyed into. The KSDP (2016–2020), Sector Implementation Plans (2017–2019), Kaduna State Infrastructure Master Plan (2018–2050), and the Kaduna State Industrial Plan have all helped in setting the vision for the state as they show clearly where the state is, where it is planning to go, and how it can get there from all sectors. The aim of all these plans is to deliver on jobs, social justice, and prosperity. They stress the importance of fast-tracking private investments, which will lead to growth and job creation and strengthen fiscal sustainability of the state. 109. An important learning point is to better assess the political interplay between federal and state entities in subnational lending. The 22-month delay experienced was due to a fractured relationship between the state governor and a Kaduna state senatorial representative at the federal level. The political risk to program outcome for future subnational loans should be scrutinized to ensure that inter-client relationships do not have the power to derail projects in the future. By the same token, a strong client commitment (in the case of the Kaduna government) meant that the challenges were overcome, which was a crucial element that guaranteed success in the face of tremendous difficulty. Client ownership is critical for several reasons, and the World Bank has learned to enhance that ownership and to ensure it is there. But it is never easy, and ownership tends to shift around during implementation. In the case of Kaduna and Nigeria, the challenge is that there are two owners. That is not simply a doubling of the dialogue; it means a multiplication of relationships to be built, maintained, and repaired. Not all World Bank staff are comfortable, or skilled, in managing that kind of handholding. Looking at the future, it might Page 42 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) be helpful to provide teams with good practice notes in dealing with shared project ownership, similar to assistance in managing partner relationships. 110. With the existence of a clear and concise KSDP, the design of the program was easier as it complemented what the state government had already outlined to achieve in the short term. The objectives and outcomes outlined in the KSDP were of sufficient quality and proposed results reasonable for the PforR to draw on. The Kaduna State Economic Transformation Program-for-Results was able to align with the vision of the KSDP developed in 2016 at the time the PforR was being designed. The KSDP was then identified as the right strategy to achieve Kaduna’s medium-term goals for economic development, governance, social inclusion, security, and justice. This alignment and commitment remained throughout the execution of the program and contributed to the vast success of the PforR. 111. The strength, integrity and commitment of the PIU in driving implementation is an important highlight of the program. The PIU was staffed and financed by the state government and the project manager of the PIU (who was a civil servant) was highly competent and driven, ensuring that the steps set out in the PAD were followed religiously. The Program Action Plan was robust and useful for addressing gaps in the government system and capacity issues. The project manager had the ability to motivate the civil servants and create buy-in to the PforR as well as the wider KSDP. The Kaduna governor carefully selected reform minded individuals within the civil service to head key agencies and deliver on their mandate. 112. Donor coordination on private sector development issues was improved under the PforR, and there was a better and clearer understanding of what other development partners were working on and how to complement rather than duplicate those efforts. The program did not have an IPF-based TA component. Rather technical assistance was provided by development partners and some Bank-executed trust funds through the Public Private Infrastructure Advisory Facility (PPIAF) and Competitive Industries and Innovation Program (CIIP), funded by the European Union, Austria, Norway, and Switzerland (Table 10). During program preparation, close coordination with DFID was a critical success factor that ensured the project was delivered by the hard deadline of July 2017. The secondment of a DFID staff to the World Bank Abuja office, within the Trade and Competitiveness Global Practice meant the World Bank was able to leverage on the analytical work done on the Geo-Enabling Initiative for Monitoring and Supervision program in Kaduna, Kano, and Jigawa. In addition, DFID had made substantial investment in strengthening the capacity of KADIPA, which resulted in them providing a leadership role in the delivery of several business environment-related reforms. The PforR also leveraged technical assistance provided by other development partners such as the United States Agency for International Development (USAID) and the Open Government Partnership during the program implementation. Table 10. Donor Coordination for Private Sector Development in Nigeria Institution/ Nam Role Country ENABLE II DFID The project provided support to Results Area 1: Improving the Business- enabling Environment. ENABLE II focuses on improved policy and regulatory environment for business by enhanced public-private dialog and includes a focus on Kaduna State. Page 43 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Institution/ Nam Role Country PERL DFID PERL and the Accountable, Responsive, and Capable Government pillar, supported Results Area 2: Strengthening Fiscal Management and Accountability. The Accountable, Responsive and Capable Government pillar focuses on strengthening processes, practices, and capabilities within the Government to ensure more accountable and effective use of public resources—and includes a focus on Kaduna State. Various USAID USAID programs supported Results Area 1, with a focus on (a) programs strengthening the agriculture sector through increased agricultural productivity of selected value chains, expanded market participation, increased access to finance, and an improved business-enabling environment and (b) increasing access to and availability of power in Kaduna State. Open Multilateral Support to Open Government and citizens’ engagement Government initiative Partnership 113. Although donor coordination is recommended for successful implementation, this also poses a risk to the operation. The LINKS program, which was identified as technical partners in the implementation of the FRILIA, as well as PPP and assistance for some of the investment promotion aspects, was reduced by the British Government due to budgetary limitations and restructuring experienced due to COVID 19. This meant that implementation of this DLI struggled consequently and was a design weakness, where dependency on development partners’ programs negatively affected the implementation of the PforR. 114. Stakeholder engagement on a continuous basis was critical in Kaduna’s PforR success. Internally, bottom-up consultation made the implementers in MDAs feel that they were fully consulted, and their views were considered. For instance, responsibilities normally given to permanent secretaries and senior managers that came along with lots of travel were given to directors and other officers within the MDAs. Process flow diagrams were developed and shared in MDAs. This allowed each MDA to see how their work fed into the wider state agenda. The merits and benefits of the Tax Codification and Consolidation Law were debated extensively at the State House of Assembly with public hearings held to sensitize various LG actors, and the law was duly passed in 2016. 115. The competence of the IVA and that of the PIU was critical to the success of the PforR instrument. Success of the PforR instrument depended on the integrity of verification data provided, and the involvement of an independent verification firm helped ensure this integrity. The decision to conduct verification of Program activities based on the verification protocol by an independent verification firm was key to the success of the program. This approach enabled the firm to validate whichever data were presented to the team using investigative mechanisms. The PIU completed the hiring of the IVA following the Bank’s laid out procurement procedures. This ensured timeliness and that the process was not compromised and was thorough. The IVA was hired through direct selection and the contracting renewed on an annual basis based on competence and performance. The PIU also established a strong M&E for tracking DLI progress using information and communication technology (ICT). The verification exercise constituted physical visits to lead agencies and reviews of reports, documents, online Page 44 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) databases, and computations based on the requirements detailed in the verification protocol. Each DLI was benchmarked and rated against the agreed end target in the PAD and the PIM. 116. DLI targets should reflect activities within the direct control of the borrower and not any other entity. The Kaduna PforR faced challenges with the progress of certain DLIs disrupted due to challenges between Federal Government entities. For instance, for Kaduna to improve the number of taxpayers, the Joint Tax Board had to be involved to provide a corresponding JTB TIN. The assessment of the DLI continued despite the state not being able to influence the decision of the Joint Tax Board. This concern was addressed with the restructuring of the DLI to reflect only activities within the purview of Kaduna. In future PforR instruments, achievement of DLIs should be directly relative to internal processes of the borrower to avoid reoccurrence of similar disruptions.. 117. DLI targets should reflect activities within the direct control of the borrower and not any other entity. The Kaduna PforR faced challenges with the progress of certain DLIs disrupted due to challenges between Federal Government entities. For instance, for Kaduna to improve the number of taxpayers, the Joint Tax Board had to be involved to provide a corresponding JTB TIN. The assessment of the DLI continued despite the state not being able to influence the decision of the Joint Tax Board. This concern was addressed with the restructuring of the DLI to reflect only activities within the purview of Kaduna. In future PforR instruments, achievement of DLIs should be directly relative to internal processes of the borrower to avoid reoccurrence of similar disruptions. 118. Communication and sensitization were key elements of effective implementation of the PforR. The PforR benefitted from having a high visibility in Kaduna State and enjoyed broad support from all stakeholders. This was partly owing to a communications strategy, extensive awareness campaigns, and advocacy visits by the government officials to the community on the program’s objectives and deliverables. Collaboration with the Federal Government and the National Assembly made the program implementation excel. 119. The use of ICT for result-based monitoring of PforR instruments should be encouraged. To ensure proper supervision and timely achievement of targets, the Kaduna PIU developed an interactive monitoring dashboard that summarizes DLI data on a regular basis. The dashboard allowed the PIU to keep track of all DLIs with the help of the lead agencies. The PIU was able to resolve difficulties with DLIs that were unlikely to meet targets as a result of this. For future PforR design, the M&E tools should include results monitoring dashboards for flexibility and real-time data reporting where possible. Page 45 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) ANNEX 1. RESULTS FRAMEWORK, DISBURSEMENT-LINKED INDICATORS, AND PROGRAM ACTION PLAN Annex 1A. RESULTS FRAMEWORK (i) PDO Indicators Objective/Outcome: Improving the business enabling environment Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 1. Simplified business Days 248.00 123.00 123.00 72.00 processes: reduction in the time required to start a 31-Dec-2014 31-Mar-2021 31-Dec-2021 31-Dec-2021 business, deal with construction permit and register property (DLI1) Comments (achievements against targets): Starting a business: 10 days from 31 days. Registering a property: 30 days from 112 days. Dealing with Construction Permits: 32 days from 105 days Objective/Outcome: Strengthening fiscal management and accountability Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 2. Increased budget Text 42; 50 66; 70 66; 70 154.10; 87 Page 46 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) credibility: IGR outturn and 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 capital expenditure execution rate, in percentage (DLI 6 & 8) Comments (achievements against targets): The Kaduna State Accountant General reported an IGR out turn rate of 154.10 percent from January -December 2021, and a capital expenditure execution rate of 87 percent for year 2020. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 3. Increased fiscal Percentage 0.00 20.00 20.00 22.00 accountability, measured by improved government 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 responsiveness to citizens’ feedback on fiscal performance: indicated by the percentage of capital projects improved (DLI 10) Comments (achievements against targets): Cumulative results (July 2017 – August 2021): 22% of capital projects improved in response to citizens’ feedback • 142 logs of feedback received from citizens. • 137 logs of feedback were verified. • 31 projects improved based on verified citizens’ feedback Page 47 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) (ii) Intermediate Results Indicators Results Area: Improving the business enabling environment Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Implemented reforms Number 0.00 20.00 20.00 23.00 supporting private sector development 31-Dec-2015 31-Mar-2021 31-Dec-2021 28-Sep-2021 Comments (achievements against targets): The M&E report provided during the MTR identified 23 reforms that had taken place Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Implementation of Number 0.00 40,000.00 40,000.00 69,064.00 systematic property registration program: new 01-Jan-2017 31-Mar-2021 31-Dec-2021 31-Dec-2021 Certificates of Occupancy (CofOs) issued (DLI 2) Comments (achievements against targets): Data from KADGIS reports 48,975 cumulative CofOs from 2017 to August 2021. The IVA verified that 69,064.00. Cumulative result (January 2017 – August 2021): A total of 69,064 new CofOs were registered. Page 48 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Strengthening investment Number 10.00 32.00 32.00 33.00 promotion: Memoranda of Understanding signed 01-Jan-2017 31-Mar-2021 31-Dec-2021 31-Dec-2021 between investors and KADIPA (DLI 3) Comments (achievements against targets): KADIPA reports 32 total (8 per year). 33 MoUs were signed between KDSG and investors. The IVA verified 32. The MOUs were majorly Agro-allied sector, then manufacturing, retail & tourism, oil and gas and privatisation. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Investors that reach Amount(USD) 2.00 20.00 20.00 23.00 operations stage or aftercare in Kaduna State with KADIPA 01-Jan-2017 31-Mar-2021 31-Dec-2021 28-Sep-2021 facilitation Comments (achievements against targets): Based on Data provided by KADIPA, 23 MOUs are operational. Page 49 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Development of the legal Text Incomplete legal and Approval of PPP legal Approval of PPP legal Legal and institutional and institutional framework institutional and institutional and institutional framework for PPP for PPP (DLI 4) framework framework;Project framework;Project completed and Project Facilitation Fund Facilitation Fund Facilitation Fund operational;PPP operational;PPP established and seed pipeline prepared;PPP pipeline prepared;PPP funding of N60 million FCCL Management FCCL Management provided Framework adopted Framework adopted and FCCL from existing and FCCL from existing projects measured projects measured and disclosed; PPP and disclosed; PPP Disclosure Framework Disclosure Framework adopted, web portal adopted, web portal established, and established, and project information project information available. available. 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 Comments (achievements against targets): Approved Legal and institutional framework for PPP, Approved 2020 PPP Manual, 2020 PPP Policy, PPP Pipeline report, PPP FCCL Management Framework; PPP Disclosure Framework adopted; web portal established, and project information available; Project Facilitation Fund established and seed funding of Page 50 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) N60 million provided; FCCL from existing projects measured and disclosed; and Detailed feasibility studies for one transaction with low E&S risks* completed Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Development and Text No FRILIA FRILIA adopted FRILIA adopted FRILIA has been implementation of a through a legal through a legal adopted. Law passed Framework for Responsible instrument and under instrument and endorsed October and Inclusive Land-Intensive satisfactory 15, 2021. Agricultural Investments (DLI implementation 5) 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 Comments (achievements against targets): Kaduna State has passed and endorsed a new Responsible and Inclusive Land-Based Investment Law on October 15, 2021, which adopts the Framework for Responsible and Inclusive Land-Intensive Agricultural Investments (FRILIA) principles Consultant firm is supporting operationalizing it within the state. Results Area: Strengthening fiscal management and accountability Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Improvement of tax Number 6,000.00 200,000.00 200,000.00 495,381.00 collection: registered taxpayers (TIN) filing tax 31-Dec-2015 31-Mar-2021 31-Dec-2021 31-Dec-2021 Page 51 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) returns (DLI 7) Comments (achievements against targets): A total of 495,381 registered taxpayers with KADIRS identification number have been recorded on KADIRS online portal dashboard (Revmate) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Compliance of large (over Text 70% for private; 80% 80% for Private and 80% for Private and 100% for private; 250 employees) private and for public entities 90% for public 90% for public 100% for pubic public corporate entities with entities Personal Income Tax Administration (PAYE) 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 system Comments (achievements against targets): 100% of registered organizations either Private (with over 250 employees) or Public corporate entities are compliant with PAYE. Source KADIRS Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Enhanced strategic planning Percentage 25.00 100.00 100.00 84.00 and budgeting of public investment: MDAs whose 31-Dec-2016 31-Mar-2021 31-Dec-2021 03-Mar-2021 budgeted capital expenditure are aligned with Sector Page 52 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Implementation Plans (SIP) Comments (achievements against targets): . Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increased procurement Number 0.00 15.00 15.00 15.00 effectiveness: main procuring MDAs 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 implementing e- procurement, disclosing information on contract awards and conducting procurement audits (DLI 9) Comments (achievements against targets): E-procurement has been implemented in the 16 main procuring MDAs (excluding, Education, Health and Public Works). • 958 Contract Disclosures across MDAs. • 15 procurement audit reports developed for main procuring MDAs (2017 - 2020) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 53 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Timely payment of Percentage 1.70 0.50 0.50 0.03 contractors by public entities: arrears of payment 31-Dec-2016 31-Mar-2021 31-Dec-2021 28-Sep-2021 to contractors as percentage of appropriation Comments (achievements against targets): Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Improving performance Percentage 5.00 50.00 50.00 0.00 information on service delivery: sector programs 31-Dec-2016 31-Mar-2021 31-Dec-2021 28-Sep-2021 evaluated after three years of implementation Comments (achievements against targets): Sector scan has not been finalized to evaluate this indictor. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increased fiscal transparency Text LG budgets disclosed Timely disclosure of Timely disclosure of Audit report for 2019 of State and Local for first time in 2016; state and LG budgets state and LG budgets and 2020 budgets Governments (LG): disclosure audit report of LG and audit reports of and audit reports of disclosed in July 2020 of state and LG budget execution not state and LG budget state and LG budget and September 2021. Page 54 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) appropriations and budget disclosed. execution. execution. Audit report done for execution audit reports 2021 31-Dec-2016 31-Mar-2021 31-Dec-2021 31-Dec-2021 Comments (achievements against targets): Audit report for 2021 completed and expected to be disclosed Q3 2022. ANNEX 1B. DISBURSEMENT LINKED INDICATORS DLI IN01078011 TABLE DLI 1: 1. Simplified business processes: reduction in the time required to start a business, deal with construction permit and register property (Days) Baseline Prior Results 2017 2018 2019 2020 Total Original values 248.00 0.00 217.00 186.00 155.00 123.00 123.00 Actual values 10.00 217.00 186.00 155.00 123.00 72.00 Allocated amount ($) 10.00 6.20 6.20 6.20 6.40 6.25 31.25 Disbursed amount ($) 10.00 6.20 6.20 6.20 6.40 6.25 31.25 Comments (achievements against targets): Page 55 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Source: Independent Verification Report from IVA(PwC). DLI IN01078012 TABLE DLI 2: 2. Implementation of systematic property registration program: number of new CofOs issued (Number) Baseline Prior Results 2017 2018 2019 2020 Total Original values 0.00 3,000.00 10,000.00 10,000.00 10,000.00 10,000.00 0.00 Actual values 12.50 10,000.00 10,000.00 10,000.00 10,000.00 0.00 Allocated amount ($) 12.50 4.50 6.00 6.00 6.00 0.00 22.50 Disbursed amount ($) 12.50 4.50 6.00 6.00 6.00 0.00 22.50 Comments (achievements against targets): KADGIS cumulative from 2017 to August 2021 DLI IN01078013 TABLE DLI 3: 3. Strengthening investment promotion: number of new Memoranda of Understanding signed between investors and KADIPA (Number) Baseline Prior Results 2017 2018 2019 2020 Total Original values 10.00 0.00 8.00 8.00 8.00 8.00 0.00 Actual values 5.00 8.00 8.00 8.00 8.00 0.00 Allocated amount ($) 5.00 7.50 7.50 7.50 7.50 0.00 30.00 Disbursed amount ($) 5.00 7.50 7.50 7.50 7.50 0.00 30.00 Page 56 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Comments (achievements against targets): Source: Independent Verification Report from IVA(PwC) + KADIPA reports DLI IN01078014 TABLE DLI 4: 4. Development of the legal and institutional framework for PPP (Text) Baseline Prior Results 2017 2018 2019 2020 Total Project FCCL from One PPP Facilitation existing transaction Fund Rules, projects with low Governance measured E&S risks and and reaches Operational disclosed; commercial Manual PPP closure. prepared; disclosure Approval of Developme framework Incomplete nt of PPP adopted; legal and legal and pipeline, web portal Original values institutional institutional pre- established framework framework feasibility and project for PPP study for 3 information priority available; transaction detailed s; PPP FCCL feasibility Manageme studies for nt one Framework transaction adopted. with low E&S risks Page 57 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) completed; Project Facilitation Fund established and seed funding of NGN 60 million provided Project FCCL from Facilitation existing Fund Rules, projects Governance measured and and Operational disclosed; Manual PPP prepared; disclosure Approval of Developme framework legal and nt of PPP adopted; Actual values institutional pipeline, web portal framework pre- established for PPP feasibility and project study for 3 information priority available; transaction detailed s; PPP FCCL feasibility Manageme studies for nt one Framework transaction adopted. with low Page 58 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) E&S risks completed; Project Facilitation Fund established and seed funding of NGN 60 million provided Allocated amount ($) 0.00 8.75 8.75 8.75 8.75 0.00 35.00 Disbursed amount ($) 0.00 8.75 8.75 8.75 0.00 0.00 26.25 Comments (achievements against targets): Source: Independent Verification Report from IVA(PwC). DLI IN01078015 TABLE DLI 5: 5. Development and implementation of a Framework for Responsible and Inclusive Land-Intensive Agricultural Investments (FRILIA) (Text) Baseline Prior Results 2017 2018 2019 2020 Total FRILIA Enactment Social audit FRILIA principles developed of FRILIA. confirms approved by in line with satisfactory Original values No FRILIA approved implementa Kaduna State Governor. principles tion of and FRILIA. through a Page 59 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) consultative process. FRILIA Enactment developed of FRILIA. in line with FRILIA principles approved approved by Actual values principles Kaduna State and Governor. through a consultative process. Allocated amount ($) 5.00 0.00 10.00 10.00 10.00 0.00 30.00 Disbursed amount ($) 5.00 0.00 10.00 10.00 0.00 0.00 20.00 Comments (achievements against targets): Source: Independent Verification Report from IVA(PwC). PMU reporting. DLI IN01078016 TABLE DLI 6: 6. Increasing IGR outturn (Percentage) Baseline Prior Results 2017 2018 2019 2020 Total Original values 42.00 0.00 50.00 55.00 60.00 66.00 0.00 Actual values 5.00 50.00 55.00 60.00 66.00 0.00 Allocated amount ($) 5.00 10.00 6.25 6.25 7.50 0.00 30.00 Page 60 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Disbursed amount ($) 5.00 10.00 6.25 6.25 13.50 0.00 36.00 Comments (achievements against targets): Source: KADIRS January through September 2021 DLI IN01078017 TABLE DLI 7: 7. Improvement of tax collection: increase in number of registered taxpayers (TIN) filing returns (Number) Baseline Prior Results 2017 2018 2019 2020 Total Original values 6,000.00 30,000.00 50,000.00 100,000.00 150,000.00 200,000.00 0.00 Actual values 10.00 50,000.00 100,000.00 150,000.00 200,000.00 0.00 Allocated amount ($) 10.00 2.80 7.40 7.40 7.40 0.00 25.00 Disbursed amount ($) 10.00 2.80 7.40 7.40 13.70 0.00 31.30 Comments (achievements against targets): Source: KADIRS DLI IN01078018 TABLE DLI 8: 8. Increasing capital expenditure execution rate (Percentage) Baseline Prior Results 2017 2018 2019 2020 Total Original values 50.00 0.00 55.00 60.00 65.00 70.00 0.00 Actual values 15.00 55.00 60.00 65.00 70.00 0.00 Page 61 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Allocated amount ($) 15.00 5.00 5.00 5.00 5.00 0.00 20.00 Disbursed amount ($) 15.00 5.00 5.00 5.00 5.00 0.00 20.00 Comments (achievements against targets): Source: 2020 IGR per Accountant General, Kaduna State DLI IN01078019 TABLE DLI 9: 9. Increasing procurement effectiveness (Text) Baseline Prior Results 2017 2018 2019 2020 Total Implementa Implementa Implementa Implementa tion of e- tion of e- tion of e- tion of e- procureme procureme procureme procureme nt, nt, nt, nt, Low level of disclosure disclosure disclosure disclosure transparency of contract of contract of contract of contract and awards in awards, awards, awards, Original values competitiven three main procureme procureme procureme ess in procuring nt audit in nt audit in nt audit in procurement MDAs; five main 10 main 15 main process procureme procuring procuring procuring nt audit in MDAs. MDAs. MDAs. one main procuring MDA. Actual values Implementa Implementa Implementa Implementa tion of e- tion of e- tion of e- tion of e- Page 62 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) procureme procureme procureme procureme nt, nt, nt, nt, disclosure disclosure disclosure disclosure of contract of contract of contract of contract awards in awards, awards, awards, three main procureme procureme procureme procuring nt audit in nt audit in nt audit in MDAs; five main 10 main 15 main procureme procuring procuring procuring nt audit in MDAs. MDAs. MDAs. one main procuring MDA. Allocated amount ($) 10.00 6.25 6.25 6.25 6.25 0.00 25.00 Disbursed amount ($) 10.00 6.25 6.25 6.25 6.25 0.00 25.00 Comments (achievements against targets): Source: Kaduna State Public Procurement Authority (KADPPA) DLI IN01078020 TABLE DLI 10: 10. Improved government responsiveness to citizens’ feedback on fiscal performance: percentage of capital projects improved in response to citizens' feedback (Percentage) Baseline Prior Results 2017 2018 2019 2020 Total Original values 0.00 0.00 5.00 10.00 15.00 20.00 0.00 Actual values 15.00 5.00 10.00 15.00 20.00 0.00 Page 63 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Allocated amount ($) 15.00 5.00 5.00 5.00 5.00 0.00 20.00 Disbursed amount ($) 15.00 5.00 5.00 5.00 5.00 0.00 20.00 Comments (achievements against targets): Source: Independent Verification Report from IVA(PwC). ANNEX 1C. PROGRAM ACTION PLAN PAP_TBL Achieved Action Timing Completion Measurement (Yes/No) Review KADIPA’s budget (and outer years) Recurrent Continuous Yes Supplementary budget for 2019 budget (with to ensure it is commensurate to KADIPA’s estimates for 2020 and 2021) reflects the adjusted mandate budget for KADIPA Comments: Budgetary reviews for all PforR MDAs including KADIPA have been completed. Development and implementation by Recurrent Continuous Yes KADIPA approval of benefits sharing strategy and KADIPA of a strategy based on a socio- annual monitoring of implementation of strategy economic assessment to maximize (with adjustments if necessary) benefits sharing of investments Development of investors’ satisfaction Recurrent Continuous Yes Investors’ satisfaction survey launched and survey (including satisfaction with KADIPA investors’ grievance redress mechanism facilitation services) and of investors’ operational; annual reports grievance redressal mechanism by KADIPA Page 64 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Comments: An investors’ satisfaction survey for 2021 was completed including a sample of investors from January 2021 to August 2021 and a report was produced. The KADIPA grievance redress mechanism is operational KADIPA to lead the development of the Recurrent Continuous Yes NWIAA presented at the Northern Governors proposed North West Investment Area Forum Agreement Comments: KADIPA developed the NWIAA concept note through 3 consultative meetings. It is expected to be signed by the Governors sometime in January 2022. Development of a PPP legal and Recurrent Continuous Yes (I) PforR Implementation Manual institutional framework that appropriately (II) PPP Manual manages E&S risks: (i) PforR PIM to incorporate E&S aspects & outline risk assessment criteria for low E&S risk; (ii) PPP manual incorporates best practice E&S risk management Comments: The PforR Implementation Manual incorporating E&S aspects is completed. PPP manual completed which includes E&S risk management. KADIPA is currently developing a complimentary climate resilience toolkit. Commission of a study of social impact of Recurrent Continuous Yes Completion of study tax reforms, through distributive analysis (KADIRS) Undertake a Strategic Environmental and Recurrent Continuous Yes (i) Terms of Reference Social Assessment to support the Kaduna (ii) Approved Strategic Environmental and Social State Infrastructure Master Plan: (i) Assessment Outline and Terms of Reference; (ii) Strategic Environmental and Social Assessment Page 65 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Comments: The SESA has been completed and approved. Publish Budget Execution Report, Annual Recurrent Continuous Yes BERs available on the state’s website (within six Financial Statement and audit opinion on weeks of quarter end) and AFSs (within seven the Kaduna State Government and Local months of end of FY) Governments financial statements Comments: Available on www.kdsg.gov.ng Development and implementation of the Recurrent Continuous Yes (I) Stakeholder Engagement Plan submitted Framework for Responsible and Inclusive (II) KADGIS (and relevant agencies) has developed Land Intensive Agricultural Investments - in-house capacity to support the FRILIA FRILIA (KADGIS) implementation (staff trained and assigned responsibility for support to FRILIA implementation) (cont. in Comments) Comments: SEP Plan completed and available. In-house capacity building on FRILIA implementation was conducted on 25-26 Nov, 2020. ESRM toolkit and associated templates have been prepared by the client. FRILIA GRM/Toolkits signed by Deputy Governor. Review KADGIS’ budget to ensure it is Recurrent Continuous Yes Supplementary budget for 2019 (if required); (with commensurate to KADGIS mandate estimates for 2020 and 2021) reflecting the adjusted budget for KADGIS Comments: Budgetary reviews for all PforR MDAs including KADGIS have been completed. Page 66 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Agreed amendments to Kaduna State Land Recurrent Continuous Yes Revised regulations Use Regulations (KADGIS) Comments: Amendments have been passed. Undertake, review, and enhance the Recurrent Continuous Yes Updated Stakeholder Engagement Plan Systematic Property Registration Program Stakeholder Engagement Strategy (KADGIS) Comments: SPRP has been finalized and approved my multiple agencies. Trainings have also been conducted. Implementation of a grievance redressal Recurrent Continuous Yes Grievance redress mechanism operational mechanism for the Systematic Property Registration Program (KADGIS) Comments: Completed 2021. Full report available and saved in WBDocs. Prepare and regularly review Systematic Recurrent Continuous Yes Approved Standard Operating Procedure manual; Property Registration Program training manual and promotional material; updated documentation (KADGIS) SPRP documentation (including regulatory framework) Comments: SPRP has been completed, and regular reviews are ongoing. Page 67 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Review KEPA budget to ensure that it Recurrent Continuous Yes Supplementary budget for 2019 supported by a allows KEPA to satisfactorily fulfill its capacity assessment program; (with estimates for mandate, with a focus on private 2020 and 2021) reflects the adjusted budget for investments in Kaduna State; and detailed KEPA capacity-building program outlined and budgeted Comments: A capacity bldg program on E&S risk management was conducted in July 2020 with 57 participants drawn from KEPA, KASUPDA, KADGIS,etc. KEPA drafted modules of SESA and monitoring program. Strengthening of grievance redressal Recurrent Continuous Yes Grievance redress mechanism operational system for taxpayers (KADIRS) Comments: The Kaduna State Internal Revenue Service has a stakeholder engagement and grievance redress mechanisms in place, strengthened in 2020. The Service also has a client relations section that manages both the stakeholder engagement activities and GRM Production and dissemination of statistical Recurrent Continuous Yes Number of surveys completed and publicly information, with a focus on socio- disclosed economic information (Kaduna State Bureau of Statistics) Comments: The Kaduna Bureau of Statistics is publishing such information on: https://kdbs.ng/ Prepare Procurement Plans for five MDAs Recurrent Continuous Yes Ministry of Agriculture, Works, Education, Health, with highest volume procurements as part and Water Resources—procurement plans of these of the budget preparation and approval MDAs available process Page 68 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Comments: 14 MDAs including those listed have procurement plans available on www.kadppa.eprocurement.ng Adoption of fund release policy to MDAs Recurrent Continuous No MDAs BERs showing cumulative budget releases for improved predictability of resource against appropriations flows to MDAs Capacity building on e-procurement Recurrent Continuous Yes Signed attendance sheets, photographs and procedures and contract management KADPPA reports conducted annually for pilot MDAs (KPPA) Comments: Key Staff of the MDA attended a training on eprocurement in Germany. Subsequent trainings on SaaS eProcurement and procurement audit also conducted. Implementation of grievance redressal Recurrent Continuous Yes Grievance redress mechanism annual reports mechanism (KPPA) Comments: As of Oct 2021, GRM is in place. Introduction of risk-based internal audit Recurrent Continuous Yes Internal audit reports function outside the expenditure processing cycle (Accountant General) Comments: A risk based internal audit has been implemented and a report has been prepared by Internal Audit Department, Office of the Accountant General October 15, 2021 and cleared by the Bank. Operationalization of the state Recurrent Continuous Yes Appointment of anti-corruption desk officer Page 69 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) anticorruption framework (for PForR lead agencies) Comments: Unit established, training for Staff conducted and awareness on whistleblower policy completed. Page 70 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Nneamaka Pamela Okechukwu, Rajul Awasthi Task Team Leader(s) Sunday Esene Osoba, Bayo Awosemusi Procurement Specialist(s) Akinrinmola Oyenuga Akinyele Financial Management Specialist Arigu Yusufu Kudu Financial Management Specialist Jerry Ibrahim Bakut Team Member Winifred Onyela Odonye Team Member Olusegun Sayo Jayesimi Team Member Andrew Taylor Gartside Team Member Oluwatoyin Racheal Jinadu Team Member Michael Gboyega Ilesanmi Social Specialist Omezikam Eze Onuoha Environmental Specialist Feyifolu Adeyosola Boroffice Team Member Saeeda Sabah Rashid Team Member Olukayode O. Taiwo Social Specialist Joseph Ese Akpokodje Environmental Specialist Guillemette Sidonie Jaffrin Team Member Jonathan Mills Lindsay Team Member Tanangachi Ngwira Team Member Page 71 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Supervision/ICR Karim Ouled Belayachi, Rajul Awasthi Task Team Leader(s) Sunday Esene Osoba, Bayo Awosemusi, Mary Procurement Specialist(s) Anika Asanato-Adiwu Akinrinmola Oyenuga Akinyele Financial Management Specialist Arigu Yusufu Kudu Financial Management Specialist Nneka Ekwuozor Team Member Jerry Ibrahim Bakut Team Member Winifred Onyela Odonye Team Member Olusegun Sayo Jayesimi Team Member Bankole Sulihaj Allibay Team Member Andrew Taylor Gartside Team Member Oluwatoyin Racheal Jinadu Team Member Michael Gboyega Ilesanmi Social Specialist Nneamaka Pamela Okechukwu Team Member Omezikam Eze Onuoha Environmental Specialist Bertine Kamphuis Team Member Feyifolu Adeyosola Boroffice Team Member Saeeda Sabah Rashid Team Member Olukayode O. Taiwo Social Specialist Joseph Ese Akpokodje Environmental Specialist Guillemette Sidonie Jaffrin Team Member Jonathan Mills Lindsay Team Member Tanangachi Ngwira Team Member Page 72 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY17 71.335 446,152.49 FY18 .850 240,868.65 FY19 0 - 0.01 FY20 1.200 2,939.13 Total 73.39 689,960.26 Supervision/ICR FY18 28.041 237,119.36 FY19 30.300 189,496.07 FY20 18.460 76,207.32 Total 76.80 502,822.75 Page 73 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) ANNEX 3. PROGRAM EXPENDITURE SUMMARY Table 1: Government Program Expenditure (actuals at closing) 2017 2018 2019 2020 2021 Total DESCRIPTION OF NGN NGN NGN NGN NGN NGN GOVERNMENT PROGRAM EXPENDITURE Overhead Cost 22,800,679,779 23,654,787,811 11,537,341,492 22,425,591,340 80,418,400,422 Grants and Contributions - - - - - Program Implementation Cost 14,504,665,477 18,292,821,908 21,522,508,066 19,745,021,088 74,065,016,538 Property, Plant & Equipment 34,702,542,628 51,474,812,042 17,100,783,180 16,192,312,326 119,470,450,176 Total 72,007,887,884 93,422,421,760 50,160,632,738 58,362,924,754 273,953,867,137 Table 2: PforR Disbursements (actuals at closing) World Bank PforR 2017 2018 2019 2020 2021 TOTAL Disbursements USD USD USD USD USD USD KDSG - P4R - 001A - - 33,699,538 - - 3,699,538 KDSG - P4R - 002 - - 54,898,191 - - 54,898,191 KDSG - P4R - 003 - - 27,774,489 - - 27,774,489 KDSG - P4R - 004 - - 60,550,465 - - 60,550,465 KDSG - P4R - 005 - - - 49,911,506 - 49,911,506 KDSG - P4R - 006 - - - 34,086,031 - 34,086,031 KDSG - P4R - 007 - - - - 34,608,685 34,608,685 KDSG - P4R - 008 - - - - 20,341,508 20,341,509 KDSG - P4R - 009 - - - - 22,896,603 22,896,603 KDSG - P4R - 010 - - - - 16,121,858 16,121,858 Total - - 93,968,655 176,922,683 83,997,537 354,888,8757 7 Amount is higher than USD 350M due to currency exchange gains on XDR. Page 74 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) Page 75 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) ANNEX 4. BORROWER’S COMMENTS Page 76 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) ANNEX 5. SUPPORTING DOCUMENTS 1. Kaduna KDSET Restructuring Paper.docx 2. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No 01.pdf 3. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No. 02.pdf 4. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No. 03.pdf 5. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No. 04.pdf 6. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No. 05.pdf 7. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No. 06.pdf 8. Disclosable Version of the ISR - Nigeria - Kaduna State Economic Transformation Program- for-Results - P161998 - Sequence No. 07.pdf 9. PwC - Independent Verification Assessment Report For Kaduna State Economic Transformation Program-for-Results (PforR) December 2021 (End- Year T.pdf 10. OFFICE OF THE ACCOUNTANT GENERAL.pdf 11. MOF-RISK-BASED INTERNAL AUDIT REPORT-2020.pdf 12. Kaduna Land Use Regulations draft 2021a.pdf 13. Social Impact of Tax Reforms-Final Report updated.pdf 14. 1ST QUARTERLY INVESTMENT REPORT.pdf 15. TAXPAYER DATABASE.ods 16. AfterCare Reports.docx 17. PPP Projects.xlsx 18. CITIZENS ACCOUNTABILITY REPORT 2022.pdf 19. Sector Implementation Plan Education (2022 - 2024).pdf 20. Sector Implemenatation Plan Agriculture.pdf 21. Sector Implemenatation Plan ENVIRONMENT.pdf 22. Sector Implemenatation Plan MOJ 2022 - 2024 SIP.pdf 23. Sector Implemenatation Plan HEALTH 2022 to 2024.pdf 24. Sector Implemenatation Plan PLANNING, BUDGET AND REVENUE MOBILIZATION.pdf 25. Sector Implemenatation Plan (Infrastructure).pdf 26. Accountant General Report 2021.pdf 27. KADPPA PRESENTATION ICR MEETING May 2022.pdf 28. kaduna recording - mapping reforms Nov 2020.mp4 29. INVESTMENT SATISFACTION SURVEY ISS_KDBS 2nd December 2021.docx 30. Gombe IRS visit to KADIRS.jpg 31. Katsina IRS visit to KADIRS.jpg Page 77 of 78 The World Bank Nigeria - Kaduna State Economic Transformation Program-for-Results (P161998) 32. Memo to HE on peer learning DFID PERL june 2018.pdf 33. FIRS visit to KADIRS.jpg 34. Kano IRS visit to KADIRS.jpg 35. DLI1,2 and 3 RF Peer learning and benficiary feedback.docx 36. EYES AND EARS VOLUNTEER.docx 37. Laws reviewed by Kaduna State that contributed to the achievement of their PforR results.docx 38. CITIZENS COMPLAINTS AND FEEDBACK.docx Page 78 of 78