What the election delay really means for Nigerian aid

A week before Nigeria was supposed to hold presidential and legislative elections, the country’s electoral commission announced that it will be postponing them by six weeks to March 28 — and Abuja’s top development partners were quick to voice their concerns. U.K. Foreign Secretary Philip Hammond argued the delay is uncalled for. Nigeria’s security situation, while still an uphill battle, he said “should not be used as a reason to deny the Nigerian people from exercising their democratic right.” U.S. Secretary of State John Kerry meanwhile said the United States is “deeply disappointed” with the decision, and referred to alleged political interference with the country’s Independent National Electoral Commission as “unacceptable.” Commission chair Attahiru Jega had reportedly been determined to stay on schedule, but was forced to postpone after the country’s security advisers warned the military may not be able to provide sufficient security while battling extremism in the northeast. “The international community will be watching closely as the Nigerian government prepares for elections on the newly scheduled dates. The United States underscores the importance of ensuring that there are no further delays,” Kerry said. These strongly worded statements may put on some pressure, but cannot be expected to translate beyond rhetoric. In the case of Nigeria’s donors, these mean the delay in elections may not necessarily translate to aid suspensions. Any potential aid cut to Nigeria from its traditional donors is more likely to come as a result of its perceived ability to fund its own development. But will those aid cuts, if they come, have a big impact on the country’s development? It’s difficult to say. Nigeria received $2.5 billion in official development assistance in 2013, according to the latest data by Organization for Economic Cooperation and Development. Assuming aid flows have remained at the same levels, they pale in comparison to what Nigeria is expecting in 2015 revenues from oil alone: 1.918 trillion naira ($9.3 billion). In its 2015 proposed budget, the government is also allocating 521.27 billion naira (11.7 percent) for education and 278.8 billion naira (6.3 percent) for health, out of a total planned spending of 4.46 trillion naira. These numbers are still far from meeting internationally recommended targets for domestic spending though. Nigeria was among the African countries that pledged to spend at least 20 percent and 15 percent on education and health, respectively, in previous years. Moreover, it’s unclear how far government spending can go toward addressing outstanding issues such as maternal and under-5 mortality, and HIV and AIDS. It is therefore in these sectors — although not limited to them alone — that aid will continue to play an important role. But just which sectors are Nigeria’s top donors prioritizing? Devex takes a closer look. World Bank In 2014, Nigeria officially became eligible for financing from the World Bank’s International Bank for Reconstruction and Development, which provides loans at lower-than-market rates to developing member countries. This means that while it can still access loans from the bank’s anti-poverty arm — there remain a number of active International Development Association projects in the country — lending to the country will be expected to be increasingly handled by IBRD. The bank-approved country partnership strategy for Nigeria pegs development assistance to the country at an average $2 billion a year until 2017, and assistance will focus on three themes: diversified growth and job creation, with a focus on boosting electricity availability and agricultural productivity, expanding financing opportunities for SMEs and helping the country’s own development finance institutions to mobilize private finance; more inclusive social service delivery; and strengthened governance and public sector management. Outcome indicators for health and education, which fall under the second theme, include increasing immunization coverage of children aged 12 months to 23 months to 45.4 percent, at least 80 percent coverage of oral polio vaccine in every state, and an increase of 10,000 additional teachers in rural areas by 2017. The bank recognizes its financial assistance is “small” compared with Nigeria’s own resources, so it aims to concentrate its efforts in areas where it has “real comparative advantage” and where there’s “high likelihood of durable impact on poverty reduction” without necessitating additional donor financing. This means the bank also plans to leverage its knowledge work across the three sectors. It however acknowledges potential changes at country level due to the upcoming elections, and notes that its program has been set “flexibly” to allow for midterm adjustment in case it needed to deal with a new government. United States For fiscal 2014, the United States approved $701 million in development assistance to Nigeria. The bulk of that budget is for health, with HIV and AIDS continuing to account for much of that spending. U.S. aid to Nigeria is set to suffer cuts of almost $100 million in 2016, however, as Devex reported last week. It’s unclear yet which programs will suffer, but any reductions in health are likely to have an impact on the country’s HIV and AIDS fight. According to the latest available monitoring data by the U.N. Development Program, prevalence rates of HIV and AIDS remain disproportionate across states. United Kingdom Nigeria is among the United Kingdom’s biggest recipients of aid. The bilateral donor channels an average 250 million British pounds ($382.29 million) to the country annually, and that is expected to remain at the same level in 2015. Health continues to be a major part of U.K. aid spending in the country. In the current period, indicative spending for health is at 73.2 million British pounds, followed by 59.9 million British pounds for governance and security, and 44.7 million British pounds on wealth creation. More than 60 percent of the donor’s funding in the country is focused on the north, where development challenges are relatively huge, in part due to instability caused by Boko Haram attacks. In its operational plan, the U.K. Department for International Development noted that it has scaled up its activities in the north “despite the growing insecurity.” DfID doesn’t have plans to shift its aid delivery through government systems due to corruption concerns. The donor however notes that the conduct and outcome of the upcoming presidential elections “will affect our priorities and approach from 2015 onward.” African Development Fund Under its 2013-2017 country partnership strategy, the African Development Bank noted that financing for the period will come from the African Development Fund’s approved budgets for 2012 and 2013. ADF is the bank’s financing arm that provides low-interest loans and grants to low-income regional members, and under ADF-12, 194 million units of account or 47 billion naira has been allocated for Nigeria. It’s unclear how much, if any, has been approved for Abuja under ADF-13, which only notes that the country is classified as in transition. This means Nigeria is eligible to receive funding from both ADF and the AfDB’s window for nonconcessional loans. According to the bank’s country strategy paper, the transition period can be anywhere between two and five years and will depend on a country’s pervasiveness of poverty, rate of economic growth, and financial need and use of bank resources. The bank however recognizes that its ADF-12 allocation for Nigeria is a “relatively small size” given the country’s huge financing needs. Therefore, it plans to “use its resources strategically for optimal impact.” This means the bank will leverage its analytical and advisory work in the areas of resource mobilization, job creation, public-private partnerships and regional integration. Infrastructure development will also be among its priorities, with a focus on road transport, energy, agriculture, water and sanitation. European Union The European Union is set to provide 512 million euros ($580.75 million) to Nigeria from 2014 to 2020, with a focus on rule of law, governance and democracy; health, nutrition and resilience; and sustainable energy and access to electricity. The figure is 24 percent lower than what the multilateral donor allocated for the country in its previous multiannual programming, but this is not surprising given the country’s middle-income status. Additional humanitarian or emergency support, however, can be made available should the need arise. The bulk of EU aid will go to health, nutrition and resilience (240 million euros), with a focus on helping the government deliver on primary health care and boosting child immunization campaigns. Nutrition security and breast-feeding will also be part of its main focus, particularly in the northern part of the country. The EU has long recognized that Nigeria’s own resources “outweighs” aid provided by donors, but believes its aid can help enable authorities to “make better use of their own resources.” Check out more funding trends online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.