government of the federal republic of nigeriaof growth and accelerated poverty reduction through...

New Partnership for

Africa’s Development (NEPAD) Food and Agriculture Organization

of the United Nations Comprehensive Africa Agriculture Development Programme (CAADP)

Investment Centre Division

GOVERNMENT OF THE FEDERAL REPUBLIC OF NIGERIA

SUPPORT TO NEPAD–CAADP IMPLEMENTATION

TCP/NIR/2906 (I) (NEPAD Ref 06/44 E)

Volume II of IV

BANKABLE INVESTMENT PROJECT PROFILE

Rural Access and Mobility Project (RAMP)

February 2006

NIGERIA: Support to NEPAD–CAADP Implementation

Volume I: National Medium–Term Investment Programme (NMTIP)

Bankable Investment Project Profiles (BIPPs)

Volume II: Rural Access and Mobility Project (RAMP)

Volume III: National Programme for Food Security (NPFS)

Volume IV: Cassava Production, Processing and Marketing Project

NEPAD–CAADP BANKABLE INVESTMENT PROJECT PROFILE

Country: Nigeria

Sector of Activities: Rural Infrastructure

Proposed Project Name: Rural Access and Mobility Project (RAMP)

Project Area: National

Duration of Project: 5 years

Estimated Cost: Foreign Exchange .......... US$175.0 million Local Cost ........................ US$50.0 million Total .............................. US$225.0 million

Suggested Financing:

Source US$ million % of total

Government (Federal, State and Local) 73.0 32

Financing institution(s) (Grants and Loans) 134.0 60

Beneficiaries (User Communities) 18.0 8

Total 225.0 100

NIGERIA:

NEPAD–CAADP Bankable Investment Project Profile

“Rural Access and Mobility Project (RAMP)”

Table of Contents

Currency Equivalents .......................................................................................................................... iii

Abbreviations........................................................................................................................................ iii

I. PROJECT BACKGROUND.......................................................................................................1 A. Project Origin ....................................................................................................................1 B. General Information..........................................................................................................1

II. PROJECT AREA.........................................................................................................................2

III. PROJECT RATIONALE............................................................................................................4

IV. PROJECT OBJECTIVES...........................................................................................................5

V. PROJECT DESCRIPTION ........................................................................................................6 Component 1: Capacity Building and Project Coordination...................................................6 Component 2: Rehabilitation and Maintenance of Road Transport Infrastructure.............7 Component 3: Rural Mobility Improvements...........................................................................8 Component 4: Promotion of Small and Medium Enterprise (SME) Development ...............8

VI. INDICATIVE COSTS .................................................................................................................9

VII. PROPOSED SOURCES OF FINANCING .............................................................................10

VIII. PROJECT BENEFITS ..............................................................................................................10

IX. IMPLEMENTATION ARRANGEMENTS ............................................................................11

X. TECHNICAL ASSISTANCE REQUIREMENTS .................................................................13

XI. ISSUES AND PROPOSED ACTIONS ....................................................................................13

XII. POSSIBLE RISKS.....................................................................................................................16

ANNEXES.............................................................................................................................................17 Annex 1: Map of Nigeria ...........................................................................................................19 Annex 2: Geo–Political Zones and States in Nigeria ..............................................................21 Annex 3: State Government Budgets and Road Rehabilitation Costs ..................................23

NEPAD – Comprehensive Africa Agriculture Development Programme Nigeria: Investment Project Profile “Rural Access and Mobility Project (RAMP)”

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Currency Equivalents (June 2005)

Local Currency = Naira (N) US$1.00 = N132.50 N1,000 = US$7.60

Abbreviations

ADB African Development Bank ADP Agriculture Development Project/Programme ADT Average Daily Traffic CAADP Comprehensive Africa Agriculture Development Programme CBO Community–based Organization CDA Community Development Associations CDF Community Development Fund DFRRI Directorate of Food, Roads and Rural Infrastructure DRD Department of Rural Development FAO Food and Agriculture Organization of the United Nations FCT Federal Capital Territory FEPA Federal Environment Planning Authority FERMA Federal Road Maintenance Agency FGN Federal Government of Nigeria FMARD Federal Ministry of Agriculture and Rural Development FMW Federal Ministry of Works GDP Gross Domestic Product IMT Intermediate Means of Transport LGA Local Government Area LGC Local Government Council M&E Monitoring and Evaluation NA Not available NEPAD New Partnership for Africa’s Development NMTIP National Medium–Term Investment Programme RAMP Rural Access and Mobility Project SME Small and Medium Enterprise SRA State Road Authorities TSRIC Transport Sector Reform Implementation Committee WB World Bank


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I. PROJECT BACKGROUND

A. Project Origin

I.1. The Rural Access and Mobility Project (RAMP) is a pipeline project, which is a follow up on the Roads and Rural Infrastructure Programme of the defunct Directorate of Food, Roads and Rural Infrastructure (DFRRI). The project would undertake the rehabilitation and construction of rural roads, development of inland waterways and support the development and use of an intermediate mode of transport appropriate for rural environment. The project was identified as one of three priority projects following the preparation of the draft National Medium–Term Investment Programme (NMTIP) for Nigeria in support of NEPAD’s Comprehensive Africa Agriculture Development Programme (CAADP). The project directly relates to Priority Area 2 of the NMTIP, which corresponds to CAADP Pillar 2 (Improvement of rural infrastructure and trade–related capacities for improved market access). The project would be under the Federal Ministry of Agriculture and Rural Development (FMARD) and implementation would be coordinated by the Department of Rural Development (DRD).

I.2. The project would involve major stakeholders from Government, Development Partners, Private Sector and the Civil Society in order to exploit to the maximum all the available human resource capacity for the implementation and supervision of the project. Reduction of pervasive poverty, ensuring national food security, attaining self sufficiency in basic food production, provision of better employment opportunities and achievement of a high growth rate for the economy, are major government objectives, which among others, would be achieved through greater emphasis on agriculture and rural development.

I.3. Presently there are some donors, notably the World Bank (WB) and the African Development Bank (ADB), that are involved in the rural transport infrastructure sector. A WB/ADB initiative to improve rural access and mobility was first targeted at 18 States (i.e. three states in each of the six geopolitical zones in the country). Subsequent review missions have progressively reduced the number of states to 12 and later to six. Given the expected multiplier effect from having easy rural access and mobility and the high priority ranking at the National NMTIP stakeholder workshop, it is envisaged that the RAMP under the government’s NEPAD Initiative would eventually cover all 36 states of the country and FCT to benefit more than 70 percent of the Nigerian population which is rural.

B. General Information

I.4. Nigeria covers an area of 924,000 km2. Extending from the Atlantic Ocean in the south to the fringes of the Sahara desert in the north, it has common borders with the Republics of Benin, Niger, Chad and Cameroon (see Annex 1). Close to 60 percent of the population, currently estimated at a total of 133 million (2005), live in rural areas. The average density of about 144 persons per km2 masks the considerable differences that exist between the densely populated south–east of the country where the majority of the urban population is concentrated, and the less densely populated north. The government operates as a federation with responsibilities shared among three tiers: the Federal Government (FGN) based in the Federal Capital Territory (FCT), 36 State Governments and 774 Local Government Councils (LGCs).

I.5. With a GDP of about US$40bn, Nigeria is Africa’s second largest economy. Yet about two thirds of the population live below the national poverty line. The average annual per capita income stands at a level of US$320 (2003). Although the economy relies heavily on the petroleum sector which generates three quarters of Government revenues and more than 90 percent of foreign exchange


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earnings, agriculture continues to play an important role. The agricultural sector currently contributes 26 percent to the GDP (2003). It employs about one third of the total labour force and provides a livelihood for the majority of the rural population.

I.6. The need to give priority attention to the agricultural sector resulted in recent years in a number of policy initiatives and strategies developed by government aimed at achieving higher rates of growth and accelerated poverty reduction through higher levels of investment and efficiency. Agricultural and rural development has been identified as the future driver for accelerated growth, employment generation and poverty reduction in Nigeria which is essentially an agrarian economy. The infrastructure that is critical to rural development includes farm access and feeder roads, navigable waterways, water supply in adequate quantity and good quality, market infrastructure, health and education facilities.

I.7. Transport infrastructure, vital for all facets of development, is grossly lacking in the rural areas. Many rural areas with high agricultural potential, abundant natural resources and other rural enterprise remain cut off due to inadequate or unreliable transport facilities and services. The RAMP, therefore, aims at facilitating the evacuation of agricultural produce and movement of rural dwellers to areas of produce demand. RAMP is to address as an overall goal and development objective, the improvement of rural livelihoods, by raising the quality of life of the rural people and alleviating rural poverty through improved rural transport.

I.8. The importance of the construction and rehabilitation of rural roads has long been acknowledged by the Federal Government of Nigeria which, since 1980, has financed this activity as part of national development through different initiatives such as the World Bank–assisted Agricultural Development Project, the National Accelerated Food Production Programme of the Ministry of Agriculture and Rural Development, the Directorate of Food, Roads and Rural Infrastructure (DFRRI) and the 1993 Petroleum Special Trust Fund, which utilised the taxes and user charges on petroleum products for improving key economic and social infrastructure.

I.9. These past efforts of government, due to lack of adequate funding on a continuous basis, especially in the areas of routine and periodic maintenance in areas affected by flood, and erosion, left the roads that had been developed in a poor state. As a result, the rural population in most cases was cut off from the mainstream of the national economy due to high transport costs. This deficiency of rural transport infrastructure and facilities have drastically reduced the level and diversity of livelihood of rural dwellers.

II. PROJECT AREA

II.1. The proposed project area is intended to eventually cover all 36 states of the country and FCT. States would be selected for participation in the project on the basis of their willingness to implement appropriate road sector management and financing reforms. States in Nigeria are grouped under six geo–political zones (see Annex 6). It is intended that for the initial take off, project intervention would commence in at least one state from each of the six geo–political zones of Nigeria. However, as the overall objective of RAMP is to benefit the rural population nationwide, provision would be made for follow up activities in the expectation that more states would want to replicate the project approach.

II.2. Nigeria has eight land resource and agro–ecological zones, ranging from semi–arid, with annual rainfall of about 600 mm, to the swamp zone, with annual rainfall of more than 4,500 mm. The


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coastal zone receives rainfall most of the year. In other zones rainfall is seasonal with distinct dry and wet seasons. The wide ranging topography and diversity of climate would be an important factor to be considered in the preparation of the RAMP. Based on topography, climate and soil conditions, the project definition may vary from one geo–political zone to another as regards road construction, rehabilitation and maintenance including waterways.

II.3. Nigeria is endowed with high potential for diversified agriculture and related activities. The climate is semi–arid and arid in the north. Production of agricultural crops varies according to agro–ecological zones. Agriculture is predominantly small–scale, with the small–scale farming sub–sector accounting for more than 90 percent of the total agricultural output. Large–scale farming, operating on farms averaging above 10 ha, account for 5 percent of marketed agricultural produce, which are mainly for industry and export.

II.4. A major constraint to sustained growth and poverty reduction is the poor state of social and physical infrastructure. Existing facilities are inadequate and poorly maintained. In the case of roads, according to the Transport Sector Reform Implementation Committee (TSRIC) 2002 Report, there are 193,200 km of Nigeria road network resulting in a road density of 2.09 km per 1,000 km2 and 1.61 km per 1,000 population. The road network consists of 32,100 km (Federal Roads), 30,500 km (State Roads) and 130,000 km (Rural Roads) with a total asset value conservatively estimated at US$20bn. Most rural feeder roads are in a poor state and in some geo–political zones most roads are virtually impassable during the rainy season.

II.5. The major problem of the road sub–sector in Nigeria is the near total lack of maintenance at all levels (Federal, State and Local Government), and the absence of a rational planning and road investment system based on economic criteria. This has led, and is still leading, to wastage of resources and to an erosion of the investments made in the road sub–sector and causes considerable costs to the economy in terms of additional vehicle operating and road rehabilitation costs. The resulting total costs to the economy have been estimated at N150bn per annum, corresponding to about 3.5 percent of GDP.

II.6. In view of this situation, government has taken major steps to address the problem, through the Federal Ministry of Works (FMW). The creation of the Federal Road Maintenance Agency (FERMA) is part of the government effort to build commitment into this sector of the economy with the aim to guarantee more funding for road maintenance.

II.7. The key issues identified in rural transport are poor coordination at central level, inadequate funding and capacity to plan, design and supervise execution of works at the State and Local Government levels and the inadequate inclusion of communities and Civil Society in decision–making. These are issues the Federal Government wants to address through the RAMP, in collaboration with all stakeholders.

II.8. Government’s past efforts to provide infrastructure for rural development through the Agriculture Development Projects (ADPs), the Directorate of Food, Roads and Rural Infrastructure (DFRRI), the National Agricultural Land Development Authority (NALDA) and the River Basin and Rural Development Authorities (RBRDAs), have not yielded satisfactory results due to poor and uncoordinated implementation.

II.9. Only 25 percent of the rural villages in Nigeria are currently accessible on tarred roads, which coincidentally link up major urban centres. Investments in rural access and mobility would expand opportunities for marketing and processing of products and contribute to monetization of the rural economy. If the existing poor rural roads are rehabilitated, properly drained and hard surfaced,


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the beneficiary communities would be strengthened economically and the reduction of poverty in rural areas would be enhanced.

II.10. Improvement of access and mobility in the rural areas nationwide is acknowledged as one of the surest ways of raising the standard of living of rural dwellers. State and Local Governments would be assisted to develop and improve accessibility and mobility in the rural areas, in order to promote non–farm employment and income generating activities. The capacity of the rural dwellers would also be built to enable them undertake the construction and maintenance of rural feeder roads. The provision of jetties and improvement of water ways of the South–South geopolitical zone would adequately be addressed within the RAMP to improve the livelihood of the rural population of this region.

III. PROJECT RATIONALE

III.1. Most rural people live in scattered villages and hutments with a population of 500 or less in each case. Given the small size of the villages and their widely dispersed locations, the population density is low, particularly in the northern geo–political zones of the country, thereby making provision of public rural infrastructure on an individual village basis highly uneconomic. Only an integrated approach to rural connectivity and provision of access roads and improved mobility would be economically viable. This approach would include the participation of the rural communities and the Local Governments through proper planning and execution and with backward and forward linkages.

III.2. Many rural communities with high agricultural potential, abundant natural resources and other rural enterprise remain cut off due to inadequate or unreliable transport facilities and services. Investments in rural access and mobility would be crucial for expanding opportunities for marketing and processing of products and for contributing to the monetisation of the rural economy. State and Local Governments need to be assisted to develop and improve accessibility and mobility in rural areas, in order to promote non–farm employment and income generating activities. The capacity of the rural dwellers would have to be built to enable them to undertake construction and maintenance of rural roads.

III.3. To overcome the difficulties of the past, and based on lessons of experience, the thrust of current policy on infrastructure is that that the public sector would continue to largely finance infrastructure development as part of its poverty reduction strategy. But the sheer magnitude and complexity of the rural infrastructure problem requires action of all stakeholders.

III.4. Many projects in the past were developed without active participation of the target beneficiaries, such as local communities, local councils, NGOs and the private sector. The result is beneficiaries’ alienation, priorities of planners and target beneficiaries at variance, leading to limited accruable benefits. Technologies which respond to the priority needs of beneficiary communities to complement existing local practices and yield visible short–term benefits were often not available. The total effect of these weaknesses was minimal commitment by stakeholders, project abandonment, insecurity of project assets, sabotage and lack of ownership by the target beneficiaries. The way out would be institutionalising full stakeholder participation in the project. The RAMP initiative that is being implemented would be coordinated at the federal level through a Project Management Unit of the DRD that would include experienced private consultants to ensure the commitment of all stakeholders in the overall implementation process of the project to avoid the mistakes of the past.


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III.5. Most agriculture and rural infrastructure projects, being essentially technical in nature, tended to be gender neutral in their design and implementation. In the past, no due cognizance was taken of the fact that men and women often have different responsibilities in production, transportation, storage, processing and marketing of agricultural commodities. Recognizing gender mainstreaming in project design and implementation should be emphasized in order to empower both male and female rural dwellers. The RAMP aims at targeting vulnerable members of the rural communities within planned interventions to ensure that they benefit optimally from these interventions, especially with regard to reducing the travel time and effort associated with household activities.

III.6. Although the RAMP may be undertaken as a stand–alone project, it is recommended that the project be linked to other ongoing projects which have similar objectives, with the aim to scale–up successful ongoing interventions.

IV. PROJECT OBJECTIVES

IV.1. The overall objective of the RAMP is to improve rural livelihoods by raising the quality of life of the rural people and alleviating rural poverty through improved rural transport. The RAMP is to assist states and Local Government Councils to sustainably improve access and mobility in their rural areas.

IV.2. Its specific objectives are:

• To strengthen the capacity for the coordination and management of policy implementation at the federal level, thereby facilitating resource mobilization and the wide–spread adoption of good practice in the rural infrastructure and transport sector.

• To ensure project sustainability by strengthening the capacity of rural stakeholders (government, communities and private sector) to identify, design and implement interventions that would contribute to improving livelihood in a manner that empowers rural dwellers, consequently bringing the rural dwellers to the mainstream of national development.

• To improve rehabilitation and maintenance of rural transport infrastructure to facilitate improved farm to market linkages and contribute to overall rural development efforts, thereby bringing an improvement to agricultural marketing and service delivery. This would subsequently result in the enhancement of food supply and reduction of hunger.

• To diversify the options available to rural dwellers to meet their movement needs through increased and enhanced provision of rural transport services, using conventional and intermediate means of transport to bring about increase in rural productive activities and create opportunities in the rural areas. This would consequently curtail the rural–urban drift or migration.

• To promote non–farm employment and income generating activities that are demand–driven and implemented by rural dwellers, especially those related to the provision of small–scale rural infrastructure which contribute to reducing the time and efforts associated with travelling. This would enhance the economic standing of the rural populace and also improve the information flow.


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V. PROJECT DESCRIPTION

V.1. The RAMP would be executed in phases addressing the chronic constraints posed on rural development in Nigeria by the inadequacies in the level of transport access and mobility available to rural dwellers. States would be selected on the basis of their willingness to implement appropriate road sector management and financing reforms. Selection criteria would be prepared accordingly. This would allow for the short–listing of states proposed for the initial phase of the project. Provision would be made for the design of follow–on projects to allow more states that are willing to replicate the project approach to participate. Each participating state would be expected to make an upfront commitment to the financing of their road network to the required extent, based on need and to adhere to the principles contained in the project document.

V.2. Across all components of the project, the gender and social impact of proposed interventions would be given specific attention to ensure that the project responds to the needs of the most vulnerable as it responds to the needs of the majority of the beneficiary communities. The project would have four components as follows:

Component 1: Capacity Building and Project Coordination

V.3. Arrangements for institutional strengthening and capacity building would be built upon the existing framework of institutions. Efforts would be made to preserve those parts of the institutional set up that are effective and adjust those parts that constrain effective performance of the road management system. Following an assessment of the roles and constraints of the existing implementing agencies, Technical Assistance (TA) would be provided to strengthen the existing system and the rural communities.

V.4. The following main activities are envisaged under this component:

• The FMARD would strengthen the coordination capacity of the Department of Rural Development (DRD) at the federal level through the establishment of a Project Management Unit (PMU) that would have the overall responsibility for monitoring and evaluating the implementation of the project, and to prepare the scaling–up of the institutional design for the whole country.

• The PMU would strengthen the capacity of the State and Local Governments, relevant agencies and entrepreneurs and rural stakeholders to identify, design, formulate and implement interventions that contribute to improvement in rural livelihood. This would involve the training of relevant government officials to collect the key planning data and to develop and implement a database for monitoring and evaluation of the project process at the Local Government and community level.

• The capacities of the local communities would also be strengthened in order to mobilize resources and encourage participation of the community, including the very poor and disadvantaged. Simple project management skills would be taught through community leaders for eventual project implementation and sustenance by the rural stakeholders. The Local Government, through community leaders, would identify and organize the formal and informal community groups, especially women groups, to be involved in planning and implementation.

• Technical assistance would be provided to facilitate wider transport sector reform at all tiers of government and the development of community–driven approaches to the


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identification of needed interventions at all levels of government for the improvement of rural mobility.

• The PMU would also assist in setting up an autonomous Road Maintenance Agency to ensure an effective maintenance programme for all rural road infrastructures at the State Government level and the establishment of sustainable and permanent road maintenance funding arrangements, preferably through state–based and user– controlled road funds.

• The PMU at the federal level would collaborate with the National Space Agency in the use of satellite imagery to monitor the rural road system nationwide.

Component 2: Rehabilitation and Maintenance of Road Transport Infrastructure

V.5. This component would finance the rehabilitation and maintenance of critical and high priority links of the state rural road system to ensure access from the agricultural production zones to markets, improved access to social and economic services, and linkage of the Local Government and community road networks to the higher level road network. Interventions would predominantly concern Local Government and state roads. Occasionally, spot intervention might be required and justified on the (rural) federal road network in a state. This component would also include measures for the promotion of labour intensive work methods, thereby creating jobs. Local contractors would be trained in this approach.

V.6. The following specific tasks must be undertaken by specialists or consultants before the rehabilitation and maintenance of road transport infrastructure can be effected:

• Road network identification – to determine the total length of roads for rehabilitation and maintenance;

• Road inventory and classification preparation – to determine the level of repair and the priority of intervention;

• Hydraulic structures inventories and condition survey – to determine the level of control of drainage activities along the roads;

• Traffic volume determination by link – to determine the adequacy of the design level of the roads;

• Existing soils and material data determination – to determine the sustainability of the road based on volume of traffic;

• Survey and appraisal of the plants and equipments in all Local Government works departments – to determine the ability of the Local Government to sustain maintenance work;

• Formulation of improvement options – to determine the level of intervention based on priorities;

• Assessment of trend in revenue and expenditure in rural and urban road maintenance and improvement over at least the last three years in the State and Local Governments – to determine commitment to rehabilitation and maintenance of road transport infrastructure;

• Programme development through prioritization – summary of overall results as a basis for implementation.


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Component 3: Rural Mobility Improvements

V.7. This component would finance the development of strategy and implementation of enhanced provision and use of public transport services including intermediate means of transport (IMT). It would also involve the private sector and community–based organizations, demonstration projects on the promotion of local manufacture and use of IMT such as animal traction, tricycles, two–wheel vehicles, bicycles and canoes. The activities in respect of these improvements would include the following:

• Financial incentives would be given by government to encourage improvement in this sector through interventions to create an enabling environment for the private sector provision of these services.

• Government would establish a legal and institutional framework that would empower communities to participate in planning and decision making on their rural transport improvements.

Component 4: Promotion of Small and Medium Enterprise (SME) Development

V.8. This component would provide advice through Technical Assistance, training and support to local stakeholders wanting to establish SMEs to provide various services within the rural transport sector, thus improving their livelihoods. There would be need for implementing reforms to encourage private enterprises and NGOs to maximize effectiveness in SME development in the rural community. The following main activities would be envisaged:

• Government would support physical investments in rural transport infrastructure by encouraging stakeholders through tax incentives and elaborating public enlightenment programme to build capacity of commerce of the private sector and NGOs to support project implementation.

• Government would introduce entrepreneurship development activities to assist private sector development.

V.9. Traditional organizational structures built around family lineages, neighbourhood, social club networks and community development associations still exist and could function effectively as channels for implementing a labour–based road maintenance strategy, rural mobility improvements and promotion of SME development.

V.10. The main problem the local community organisations face is severe financial constraints. The revival of the innovative Community Banking Initiative of government several years ago holds some prospects for improved access to capital both by community organisations and domestic contractors in road improvement works, rural mobility improvements and promotion of SME development.


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VI. INDICATIVE COSTS

VI.1. To determine the financial requirements for the RAMP during the five–year period 2005-2010, indicative cost estimates need to be prepared for the rehabilitation of the rural roads in the LGCs where intervention would commence as the first phase of the project. The investments required would include the following:

• grading and regrading of earth roads;

• regravelling of unpaved roads; and

• resurfacing of paved roads.

VI.2. In addition, there is a need to determine the costs of other works such as strengthening of existing road pavement, including minor to medium drainage improvement. Estimates of the costs of construction materials such as suitable fill materials, base and sub–base materials such as required by the type of road rehabilitation works have to be made. A total of 45,741 km of rural roads has been identified, based on the states that submitted road information to the DRD for participation (see Annex 3). The estimate of average rehabilitation costs per kilometre (km) of road, on the basis of past experience and the Federal Ministry of Works and Housing Guidelines, is US$35,000 per km (see Table 1). This is based on an average of 80 percent of earthroads and 20 percent of surface dressing or asphaltic concrete roads for an average daily traffic (ADT) between 300 and 1,500 and an average road width of 6.0 m. The cost of intervention in six states is estimated to amount to US$225.0m, based on an average of 800 km of road in each geopolitical zone in the first intervention phase. Table 2 shows the indicative cost summary by components.

Table 1: Typical Road Rehabilitation Costs per km – Earthroads and Surface Dressed Roads 6.0 m road width 7.5 m road width 300 ≤ ADT≤1,500 *

N US$ N US$ Earthroads with earth drains by contract N5.2m $37,000 N7.2m $51,000 Earthroads with earth drains by direct labour N3.5m $25,000 N4.7m $34,000 Earthroads with concrete drains by contract N8.0m $57,000 N11.0m $78,000 Earthroads with concrete drains by direct labour N5.2m $37,000 N7.2m $51,000 Surface dressed roads with earth drains by contract N10.0m $71,400 N13.0m $93,000 Surface dressed roads with earth drains by direct labour N6.5m $46,500 N8.5m $60,500 Surface dressed road with concrete drains by contract N15.0m $107,000 N20.0m $143,000 Surface dressed road with concrete by direct labour N10.0m $71,400 N13.0m $93,000 * ADT: Average Daily Traffic. Source: State Ministry of Works (Highway Dept.), June 2005.

Table 2: Indicative Cost Summary by Component

Components Indicative Cost (US$m)

% of Total

2005 2006 2007 2008 2009 2010

1. Capacity building and institutional reform 18.0 8 1.45 3.31 3.31 3.31 3.31 3.31 2. Rehabilitation and maintenance of road transport infrastructure 167.75 75 – 33.75 33.75 33.75 33.75 33.75 3. Rural mobility improvements 18.0 8 – 3.6 3.6 3.6 3.6 3.6 4. Promotion of Small and Medium Enterprise (SME) development 4.5 2 – 0.9 0.9 0.9 0.9 0.9 5. Project administration, project preparation and baseline studies 15.75 7 1.45 2.86 2.86 2.86 2.86 2.86 Total project costs 225.0 100 2.9 44.42 44.42 44.42 44.42 44.42 Foreign 175.0 77.8 1.0 34.8 34.8 34.8 34.8 34.8 Local 50.0 22.2 1.9 9.62 9.62 9.62 9.26 9.26


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VII. PROPOSED SOURCES OF FINANCING

VII.1. The Federal Government of Nigeria is expected to provide (US$50m) for the RAMP project nationwide over the next five years through budget allocation. Recent developments have indicated that the contribution of the participating states in the first phase may be US$18.0m.

VII.2. The government, through the budget for the year 2004/2005, has earmarked a total of N250m (US$1.9m). The WB and ADB have made commitments of US$100m and US$33m, respectively, to the RAMP Project. Further external assistance of US$23.21m is sought from donors and financing institutions that identify the RAMP project as critical area of investment in rural livelihood by raising the quality of life of the rural people and alleviating rural poverty through improved rural transport. Table 3 below summarizes the possible source of financing.

Table 3: Sources of Financing US$ million % of Total Government (Federal) 50.00 22.22 State Governments 18.00 8.00 Financing Institution(s) 133.79 59.46 Other Sources (to be identified) or Financing Gap 23.21 10.32 Total 225.00 100.00

VIII. PROJECT BENEFITS

VIII.1. The project would lead to several important direct benefits that would have an impact at the grassroots, state and national level.

• The project would increase accountability and transparency in the use of public resources through more efficient road sector management and financing at the state, local and community level. As a result, available resources would go further in use than presently and thus impact more beneficially on a greater number of the population.

• The project would create employment and income generating opportunities. Emphasis on skills and technology transfer to the rural population would increase average incomes within the project areas and contribute to sustainability and replication of project successes.

• The project would elicit at the national level, an improved ability to coordinate and manage rural transport issues based on lessons emerging from the project. It would facilitate the addressing of the issues in every state nationwide through its effects.

• The project would facilitate the evacuation of agricultural produce and the access to rural services thereby reducing transport and marketing transaction costs.

• The project would also lead to increased production of food and export crops and hence contribute to the national objective of improving food security and reducing poverty.

• The project would open the rural areas to agro–industrial development as improved mobility would encourage investors in the private sector to fully exploit the country’s agricultural potential.


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IX. IMPLEMENTATION ARRANGEMENTS

IX.1. The RAMP would be a demand–driven project, implemented under the existing institutional arrangements. The project, being nationwide in scope, would seek to scale–up or complement ongoing projects in order to benefit from common synergies and reach out to as many communities as possible.

IX.2. Project Administration and Organisational Structure. At national level, the DRD would provide the project coordination and oversight through the PMU that would represent the interest of all stakeholders in the project. As part of project preparation, the DRD and the unit would be strengthened with members from the relevant Federal and State Government Ministries and Agencies, private stakeholders as well as with consultants. The main responsibilities of the PMU would include:

• Coordinating and monitoring the implementation of the project with all stakeholders (Federal and State Governments, the private sector, local communities and civic organizations).

• Ensuring increase in national awareness of rural transport and mobility issues and the policy response of government.

• Ensuring capacity building through the delivery of knowledge sharing and training activities of the project.

• Establishing and maintaining the monitoring and evaluation activities of the project and reporting project progress and impact to the DRD for presentation to government and donors.

• Ensuring that the project funds are well utilized for project implementation through a properly set up accounting system at all levels of project implementation.

IX.3. The DRD would serve as the Project Management Secretariat and it would operate under the guidance and supervision of the Permanent Secretary (FMARD) or an appointed representative. The day–to–day coordination and implementation of the project would be handled by the PMU.

IX.4. At State level, the project would be implemented by the State agency responsible for rural development under the oversight of a State PMU which would comprise of representatives of relevant state level agencies such as those responsible for road and agriculture, finance and economic planning and their Local Government counterpart and representatives of civic organizations and NGOs. The role of the State PMU would principally be the following:

• To ensure that RAMP is well implemented according to DRD directives and guidance.

• To assist in resource mobilization for executing rural road and transport interventions, consistent with the DRD guidelines.

• To hold regular meetings (quarterly) and provide a report on deliberations directly to DRD. A representative of DRD would attend such meetings.

IX.5. States would be encouraged to set up State Road Authorities (SRA) and where they are put in place, these agencies would be the principal implementer of the project, responsible for the overall management and coordination of project activities within the State (technical guidance, financial management and reporting, procurement and financial management) and work supervision on state and Local Government roads. They would provide technical support to Local Governments in their


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road network development and planning functions. The SRAs would provide regular progress reports to the DRD at the federal level and undertake dissemination and capacity building activities at the state, local and community levels.

IX.6. For works on community roads, supervision would principally be by the respective Local Government Works Department. At Local Government level, the responsibility for the project activities would be the relevant planning agency, the objective being to ensure that proposed interventions are positioned with the framework of overall planning for the development of the recipient Local Government Area (LGA) and the community. This agency would work with other agencies of the Local Government as necessary to ensure effective coordination and implementation of project activities at the Local Government and community level. It would provide the interface for communities and civic organizations participating in the project.

IX.7. Procurement Arrangements. The DRD and the state level implementation agency, expected to be the SRA, would be responsible for all procurement under the project. During project preparation, relevant staff of these agencies would be trained on these procedures and a relevant procurement management system set up as documented in a procurement manual.

IX.8. Financial Management. The RAMP financial management system would be designed to support efficient and effective delivery of outputs as well as generation of timely reports for monitoring of funds utilization.

IX.9. The financial management capacity of the implementation units at the federal level (DRD) and at the state level (SRA) would appraise all accountability statements at the Local Government and community levels of project implementation. Financial reports at every level of project operation would be submitted to DRD for scrutiny and subsequent presentation to donors.

IX.10. Monitoring and Evaluation. The DRD would have overall responsibility for project monitoring and evaluation through the PMU. It would be supported in this regard by each of the state level agency responsible for the project which would be required to establish monitoring and evaluation frameworks at the state, local and community levels consistent with the overall design provided by the DRD. Using these frameworks, the DRD would provide to donors monthly and quarterly reports as the case may be on project activities (technical and financial) and its emerging impacts. Minutes of meetings of the State PMU and Federal PMU would be attached to such periodic reports. It is planned that a mid–term review of the project be undertaken about two years into the commencement of the project jointly with the government and participating development partners. To prepare for the review, DRD would engage consultants to undertake a detailed progress report covering project activities since its inception, including implementation issues, results on the ground, overall progress with the implementation of the project guidelines and changes in performance indicators.

IX.11. Role of the Private Sector. The private sector would be involved in the actual construction and rehabilitation of the transport infrastructure and manufacturing of the IMT on competitive basis, while government provides the enabling environment.


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X. TECHNICAL ASSISTANCE REQUIREMENTS

X.1. The RAMP is a technical oriented project that would require well–trained and qualified engineers in the fields relevant to RAMP objectives. Nigeria has a well trained pool of engineering experts to undertake the road construction and planning scheme within the RAMP. However, Technical Assistance would be required in the area of capacity strengthening of government, Private Sector and local communities as well as to undertake environmental impact assessment studies to monitor changes in environment resulting from various project interventions.

X.2. The Federal Environment Planning Authority (FEPA) or relevant experts in the Federal Ministry of Environment would be contracted to carry out the environmental assessments.

XI. ISSUES AND PROPOSED ACTIONS

XI.1. The clusters of issues presented below would require clarification, attention and further elaboration prior to project implementation.

XI.2. Financial. The principal issues which would be addressed during project preparation relate to ensuring a stable financial base for road maintenance and determining the level of cost sharing, where appropriate, to be provided by Local Governments and recipient communities for provision of rural transport and other infrastructure.

XI.3. The financial management arrangement for RAMP would address these issues ensuring that project financial management is: (i) undertaken by qualified accounting and auditing personnel trained in project financial management, disbursement and procurement procedures; and (ii) guided by an approved Financial Management Manual to be prepared as part of project preparation. Furthermore, the financial management system would be computerized; the Federal PMU and its state counterparts would have qualified internal auditors and their accounts are externally audited by accountants acceptable to government; it is expected that the financial management capacity of the implementation units would be in place before appraisal and their assessment would be part of project appraisal activities.

XI.4. Technical. Consistent with one of the principles underlying the project strategies which see the transport sector as a system with each of its different elements contributing complementarily to the achievement of the goals set for the sector, a rural transport development plan would be prepared for each participating State and LGA. This plan would provide a road map for the development of the rural transport sub–sector in the project areas as a whole and identify a prioritized list of interventions to be implemented under the project. The development of the plan would be based on:

• A basic access approach to the improvement of rural transport infrastructure, focused on the improvement of critical spots/sections and improvement of rehabilitation of road sections and or drainage structures.

• The participatory development of a technical manual to guide the selection, design, construction and maintenance of rural transport infrastructure and the application of this manual in the identification of interventions under the project. The guide would in particular take into account the physical environment of the six geopolitical zones, with attention to design for areas prone to erosion and deforestation.


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• Development of a participatory approach to the identification of community level transport and allied small–scale infrastructure that would contribute to the reduction of the travel time and effort associated with household activities.

• Development and implementation of a strategy for optimizing the use of labour–based methods of construction and maintenance activities under the project.

• Participatory identification of intermediate means of transport, the promotion of the use of which would contribute to increased rural mobility.

• Identification of methods and approaches for mainstreaming the consideration of gender and social issues in the identification and implementation of project interventions.

XI.5. Institutional. The key issue in relation to institutional arrangements to be undertaken during project preparation is assisting participating States to detail effective institutional frameworks for road sector management and financing. In addition, the States would be assisted during project preparation to strengthen their capacity for an effective implementation.

XI.6. While the DRD would have overall responsibility for project management and FMARD would be the lead government institution for coordination, consideration should be given to involve private consultants with knowledge of road development and management, to strengthen DRD in project management of RAMP.

XI.7. Environmental. Concern about environmental issues arises from the land and related resources intensiveness of road rehabilitation and maintenance activities, with their associated impacts on:

• the geomorphology, drainage and soils in areas along the roads;

• the vegetation in areas along the roads;

• the settlement structure and movement patterns in areas along and served by the roads, especially in rural areas close to urban areas;

• the structure as well as the levels of economic activity in areas along and served by the roads;

• the overall state of well–being of people served by the roads.

XI.8. Physical as well as ecological attributes are at risk if no mitigating measures are taken. Floral and faunal stocks and biodiversity could be adversely affected through manual as well as mechanized land clearing for expansion and re–routing of roads.

XI.9. In reality, the various environmental characteristics are inter–related within a complex network of interactions which effect human values. Thus, changes in physical attributes and ecological attributes brought about by road rehabilitation and maintenance activities have effects on:

• Employment generation, for example through the use of labour supplied by residents in areas along the local roads (the “length man” strategy).

• Income generation, directly through additional manpower required for improved road rehabilitation and maintenance and indirectly through multiplier effects in areas along the roads.


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• Economic structural changes induced by changes in accessibility and in land use in areas along the roads.

XI.10. The potential changes highlighted above need to be constantly monitored against appropriate baseline data on the relevant environmental elements. Recommended criteria and thresholds of concern to be used in monitoring and assessing the impacts of road maintenance activities must be derived at the preparation stage of the project. Other specific issues that need to be carefully considered would be identified at detailed project preparation stage to limit the scope and extent of negative environmental impacts of road rehabilitation and maintenance.

XI.11. Social. The social issues arising out of the project objectives and the project planned social development outcome would be determined at project preparation stage. The following social issues must be further explored:

• Existing organization set–ups built around family lineages, neighbourhoods and social club networks and community development associations must be identified and formalized into recognized groups as channels for implementing project activities.

• A gender and social assessment of proposed interventions would ascertain that optimal use has been made of opportunities of RAMP to address gender and social issues under the project. This would lead to the elaboration of methods for incorporating such assessments into project design and execution and the monitoring and evaluation of project impacts.

• The RAMP involves several organizations from government, the private sector, NGOs and the local communities. The need for collaboration and coordination among various stakeholders is therefore crucial for the success of the project and to make it possible to exploit existing synergies, and to efficiently use human resource capacity effectively for implementation and supervision of projects.

• Workshops would be held to involve all stakeholders in the course of developing project plans for information gathering and dissemination for better understanding of project concepts by all participations.


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XII. POSSIBLE RISKS

XII.1. The key to the sustainability of this project is the adoption and effective implementation of road sector reforms along with good work practice. The RAMP has been conceived taking into account lessons learned from previous experiences; however, like all new projects it is likely to encounter possible risks that could undermine the project success and long–term sustainability. The risks and mitigating measures are summarised in the table below.

Risk Risk Mitigation Measure 1. Inadequate capacity of DRD to effectively

manage the project due to lack of support at high level within FMARD.

The highest authorities within FMARD would be fully involved in project preparation and the required reforms would have to be agreed upon prior to project start. Project preparation wrap–up meetings would be held at all levels. The planned mid– term review would identify any issues and propose remedies if so required.

2. State and Local Governments do not keep their part of the upfront agreements on reform and FMARD is unable to assist in ensuring compliance.

Project preparation would require significant implementation of upfront reforms. State and Local Governments would be involved in a dialogue with Federal Government to achieve adoption of the reforms under a national policy.

3. Delays in implementation due to the unresolved issues or lack of financing of the rehabilitation and maintenance of road transport infrastructure.

During preparation, right sizing of the road network would be carried out (including waterways in riverine areas where applicable) and maintenance need assessed. Project funds would only be used to improve roads for which maintenance funding is available. A study to assess ways of optimizing the use of the maintenance fund would be carried out during project preparation stage.

4. Communities do not adopt IMTs being promoted and private sector unresponsive to measures to encourage their provision of rural transport services.

An information, education and communication strategy would be part of project preparation to sensitize stakeholders on project objectives and instruments to raise awareness. Participatory methods would be used to define proposed interventions to ensure their acceptability. A pilot demonstration approach would be adopted with only successful interventions up–scaled.

5. The project is seen as part of dividends of democracy, so there could be resistance of participants to a cost sharing approach.

Nigerians are naturally ‘private sector’ in orientation. With proper project design, pilot testing and awareness creation it is expected that they would respond well to the project proposals.


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ANNEXES

Annex 1: Map of Nigeria

Annex 2: Geo–Political Zones and States in Nigeria

Annex 3: State Government Budgets and Road Rehabilitation Costs


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Annex 1: Map of Nigeria


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Annex 2: Geo–Political Zones and States in Nigeria

South–West South–East South–South North–West North–East North–Central Ogun Ebonyi Cross River Kano Taraba Nasarawa Ondo Anambra Bayelsa Katsina Adamawa Benue Osun Imo Edo Zamfara Bauchi Niger Oyo Abia Delta Sokoto Gombe Kogi Ekiti Enugu Akwa Ibom Kebbi Yobe Kwara Lagos Rivers Jigawa Borno Plateau Kaduna FCT


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Annex 3: State Government Budgets and Road Rehabilitation Costs

State

No o

f LGC

s

Popu

latio

n (m

illion

)

Pove

rty L

evel

(%)

Area

(km

2 )

Tota

l Rur

al Ro

ads (

km)

Fede

ral R

oads

(km

)

Stat

e Roa

ds (k

m)

Rout

ine M

ainte

nanc

e (km

)

Perio

dic M

ainte

nanc

e (km

)

Govt

. Bud

get f

or R

ural

Road

s (5 y

ears

, Nbn

)

Actu

al Ex

p. o

n Ru

ral R

oads

(5

year

s, Nb

n)

Actu

al Ex

pend

iture

as

% o

f Bud

get

No. o

f Tec

hnica

l Sta

ff

Main Crops Produced

Adamawa 25 2.5 58.8 42,159 2,171 3,729 1,622 135 60 2.4 1.9 79 73 Sorghum, Maize, Rice, Cassava Anambra 21 2.7 65 n.a. 329.83 1,171.8 302.2 n.a. n.a. 1.2 0.678 56.5 11 Cassava, Yam, Maize, Cocoyam Bayelsa 8 3.0 70 21,100 744.5 446.2 2,495.6 246 70 10.8 10.8 100 97 Yam, Cassava, Cocoa, Pepper Benue 23 3.5 60 30,955 329.8 n.a. n.a. 389 3,161 10.4 0.0313 0.3 17 Yam, Soybeans, Cassava, Oil–Palm Cross River 18 2.7 40 22,156 2,580.8 2,145.9 4,655 881.92 1,279 5 2.6 52 122 Cassava, Yam, Oil–Palm, Rubber Ebonyi 13 n.a. 70 n.a. 1,334 1,205.5 2,756 n.a. n.a. 6.6 4.8 73 58 Cocoyam, Cassava, Yam, Rice Edo 18 2.1 50 19,281 4,726.3 3,210 4,260 n.a. n.a. 3 1.0 33.3 33 Maize, Cassava, Yam, Rice Imo 27 2.4 70 n.a. 1,191.4 728 1,131 330 240 5.8 5.8 100 16 Yam, Rice, Cassava, Maize Kaduna 18 5.7 70 46,020 481.4 1,158 883 n.a. n.a. n.a. n.a. n.a. 25 Maize, Millet, Rice, Sugar–Cane Kano 45 12.0 70 20,760 2,374.2 2,390 2,495.6 802.8 841 2.5 1.7 68 485 Rice, Pepper, Sorghum, Groundnut Katsina 34 4.5 70 23,983 890.5 3,729 2,884 499 127 0.0136 0.01 73 36 Maize, Sorghum, Cotton, Millet Kogi 25 2.1 68 n.a. 4,804.9 2,053 2,898 37 366 7.6 3.9 51.3 11 Rice, Palm–Oil, Cassava, Yam Niger 23 2.4 60 n.a. 6,718.1 3,840 3,440 n.a. n.a. 8.5 8.2 98 52 Rice, Sorghum, Cassava, Yam Ogun 20 2.3 70 n.a. 1,680.8 1,960 4,513 n.a. n.a. 0.939 0.61 64.5 19 Maize, Cocoyam, Cassava, Melon Ondo 14 3.7 71.6 n.a. 5,003.6 2,443 3,780 369 543 5.8 5.8 100 286 Cocoa, Cashew, Rubber Osun 27 2.2 60 8,883 4,192.3 1,435 n.a. n.a. n.a. 68.1 68.1 100 29 Maize, Yam, Cassava, Cocoyam Oyo 33 3.4 59 27,000 5,836 1,135 2,644 45.2 277 n.a. 7.1 n.a. 158 Cassava, Yam, Maize, Sorghum Taraba 15 1.5 85 59,400 352 1,660 102 184 104 0.155 0.1 64 38 Rice, Groundnut, Sugar–Cane, Maize Total 58.7 45,741.4 138.81 127.12

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