DfID-Nigeria Partnership

Despite a decade of relatively strong, oil-driven economic growth — averaging 7 percent of gross domestic product — Nigeria continues to struggle with enormous development challenges. The nearly $400 billion in oil revenues the Nigerian government has earned since gaining independence from the United Kingdom in 1960 have done little to alleviate poverty and 64 percent of the country’s estimated 158 million population continues to live on less than $1 a day. Today, Africa’s most populous country is home to 10 percent of the world’s out-of-school children, 10 percent of global child and maternal deaths, and a quarter of all malaria cases worldwide. Nigeria’s precarious political and security climate has been among the key factors hampering the country’s overall development. Poor governance, especially the misuse of public funds and oil revenues, is one of the country’s most endemic and persistent problems. Most notably, security concerns in the north and violent disputes over oil revenues in the Niger Delta risk spilling over and further disrupting the country’s already fragile government institutions and systems. The United Kingdom is dedicated to helping build a stable and prosperous Nigeria. Aid from the U.K. Department for International Development has increased some 116 percent between 2010 and 2015 — the second-largest increase in U.K. aid after Somalia. Funding levels In 2012, Nigeria is the fifth-largest recipient of U.K. aid with the DfID budget to Nigeria increasing from 120 million pounds ($194.3 million) in 2009 to 180 million pounds in 2012. Overall, the country is set to receive a total of 1.1 billion pounds in assistance for the fiscal years 2010-11 to 2014-15. DfID provides aid to Nigeria through different channels, including the provision of grants to nongovernmental organizations and contracts to private sector partners. Importantly, the agency remains hesitant to funnel its aid directly through Nigeria’s country systems in order to minimize corruption and avoid the substitution of Nigerian public resources with U.K. funds. Funding priorities DfID’s aid activities in Nigeria are focused in six key areas: (1) wealth creation, (2) governance and security, (3) education, (4) reproductive health, malaria, HIV and AIDS, and other health-related initiatives, (5) water sanitation, and (6) poverty, hunger and vulnerability. Notably, DfID’s aid portfolio does not include funds to address climate change — an area of engagement that is currently being spearheaded by the United Nations and the World Bank. The two largest operational DfID projects in Nigeria are currently the Partnership for Transforming Health Systems 2 (149 million pounds), and the Girls Education Project Phase 3 (104 million pounds). Aligned with the Nigerian government’s development plans, Vision 20: 2020 and Countdown Strategy 2010 to 2015, DfID’s intervention targets the underlying causes of poverty and fragility — lack of investments in economic diversification, democratization, public sector reform, education and health. Furthermore, DfID’s engagement strategy is based on working with a range of national ministries and local government units. The agency also maintains state partnerships with the commercial centers of Lagos, Enugu, Kaduna, Kano and Jigawa. DfID reports that it intends to increase the number of state partnerships to include three additional northern states. Devex analysis The large increase of U.K. aid to Nigeria is partially driven by two broad but interrelated political goals: increasing economic ties and reducing the influence of militants. Nigeria, a top African investment destination, is critical to the U.K.’s economic interests in Africa. Cities like Lagos offer investment opportunities for U.K. businesses, while reliable oil exports from Africa’s largest oil exporter may contribute to stability in the volatile oil markets. According to the Trade and Investment’s Doing Business Guide, Nigeria is the United Kingdom’s 33rd largest export market with trade between the countries hitting $9 billion for the first time in 2011. Peace in the Niger Delta is sure to strengthen reliable oil output. In addition, minimizing religious unrest in the north is essential to eliminating extremists. If current plans are accurate, DfiD’s aid budget for Nigeria will grow significantly through 2015. Beyond that date, however, the amount of money Nigeria receives from the United Kingdom will depend on the Nigerian government’s ability to demonstrate reform and improvement. DfID’s refusal to provide direct budget support to Nigeria’s government institutions is indicative of the United Kingdom’s lack of confidence in Nigeria’s public systems — a situation unlikely to change in the foreseeable future. Consequently, the agency is expected to grow its assistance through expanding partnerships with global institutions, international and national nongovernmental organizations, and private service providers. Contact DfID Nigeria No. 10 Bobo Street Off Gana Street Maitama Tel.: (234-9) 460-2930 to 59