In reference to the write-up on a proposed US$3 billion World Bank funding of the power sector in Nigeria, the World Bank pipeline of future projects for Nigeria amounts to US$3.385 billion, including a Power Sector Recovery Performance Based Operation of US$1billion. This may well be the project that is being discussed in the context of the World Bank assistance to Nigeria over the next 3-4 years. As a retired World Bank staff, I wish to share my experience related to the challenges of Nigeria/World Bank operations and clear up possible misconceptions about World Bank funding of projects, particularly the scope for misallocation and corruption.
The procedures for the preparation of World Bank funded projects require that the project objectives, plans of and associated estimates of costs are spelled out in project documents.
Transparent procurement procedures are required to ensure that contracts for the works, goods and services represent the best value for money and that the bidders have the capability to deliver on the contract. Where the government’s own procurement procedures are deemed satisfactory to the World Bank, it is used for the process but ultimately, the processing and results must be satisfactory to the World Bank before the contract for works, services and equipment is awarded to and signed with the selected winning bidder. If the procurement process is not satisfactory to the World Bank no contract and disbursements of funds.
Once a contract is awarded and implementation gets underway, funds are disbursed once the government and the World Bank are satisfied that a contractor has met the required benchmarks disbursement.
Regular supervision missions of World Bank staff visit the country to assess progress in implementation and regular accounting of the projects’ financial accounts is required. The disbursement of funds from the World Bank to implement the project is subject to very high fiduciary standards. Funds can be paid directly by the World Bank to a contractor or from a local project account under the purview of the World Bank. The government is not at liberty to use the funds for any other purpose and in any manner. Misallocation and corruption are not impossible but are extremely difficult to perpetrate. Vigilance is important.
The real problem for Nigeria is very weak and slow implementation of World Bank funded projects. It negotiates funds from the World Bank for a project but by the end of the life of a project, much of the funds remain undisbursed because Nigeria has not been able to take the quality actions needed to trigger the disbursement of all or most of the funds. At the World Bank, Nigeria has been notorious for its huge undisbursed balances. I give you three examples.
In May 2014, the World Bank Board approved the Nigeria Power Sector Guarantees Project (NPSGP) to the sum of US$670 million, to enable the collection of natural gas and delivery to the power stations and alleviate a major constraint to power generation. As of October 1 2019, more than 5 years after approval, not a single dollar has been disbursed. In addition, in February 2018, the World approved US$486 million for the Electricity Transmission Project. As of Oct 1 2019, only US$2.35 million has been disbursed.
Furthermore, in June 2018, the World Bank approved US$350 million for the Nigerian Electrification Project (NEP), with total cost of US$765 million. As of October 1 2019, only US$4.91 million has been disbursed. At the end of the lives of the projects there will most likely be substantial undisbursed balances, funds that would have been used to give light to Nigerians who have been living in darkness.
The slow performance of project implementation is rooted in the corruption in the public sector among other related factors, but in the case of the World Bank the result is that Nigeria does not perform well to use up all the funds approved for it, and further it gets less funding allocation due to poor performance.
Large sums are allocated by the World Bank and AfDB to Nigeria not because its good performance but Nigeria its large population. With about one-third of the population of Sub-Saharan Africa, these multilateral institutions have to work with Nigeria, to justify their claim of focus on Africa.
However, the robust procedures, rules and regulations, backed by a huge bureaucracy to safeguard World Bank funds is squarely counter to the “informal” public financial management in Nigeria, thus meeting the strict rules and regulations is difficult for Nigerian governments. Consequently, even the funds approved do not get used promptly and ultimately given to other countries.
The World Bank is the core player in economic development and Nigeria has a right to its resources. However, the volume of support depends on performance in the use of internal resources and external assistance. It is essential for Nigerians, particularly those in the news media to be well-informed about how these development institutions operate so that we carry on constructive dialogue with internal policy makers. Information about World Bank projects, including those of the projects discussed above, are accessible from the World Bank/Nigeria website.
The World Bank has an office in Abuja and it should have a library of World Bank documents that is open to the public. In addition, members of the press, can request and schedule meetings with project managers, some who are based in Abuja, to discuss new and ongoing projects. World Bank staff are supposed to be accessible and open to the press and you can invite a project manager to come to your venue to speak to any number of people, or you can request a group meeting in their offices.
Chukwuma Obidegwu PhD
October 23, 2019