mdgs needs assessment/costing: why mdgs-based planning-2: technical issues

MDGs Needs Assessment/Costing: Why MDGs-based Planning-2: Technical Issues

A Presentation by Barth T. Feese, Head, Costing UnitOffice of the Senior Special Assistant to the President on MDGs, State House, Abuja.At MDGs Costing Seminar, Organised by the African Institute for Applied Economists, Enugu, on 17th March, 2010.

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Millennium Development Goals: Putting People First

Agenda

Introduction

Objectives of MDG needs assessments

Overview of different costing methodologies

The needs assessment approach: a practical illustration from the education sector

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Motivation

Needs Assessments aim to flip the question: FROM: How close can we get to Nigerias or Enugu States long-term goals under the current constraints?

TO: What will it take to achieve Nigerias or Enugu States long- term goals?

NOTE: Transformational Question

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Principles of Development Strategies that are Goal-basedCommon strategy todayGoal-based development strategy 1990 2005 2008 2015 MDG MDG Base Year Target Deadline

YEARYEAR? 1990 2005 2008 2015 MDG MDG Base Year Target Deadline

MDG targetLevel of MDG progress

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Agenda

Introduction

Objectives of MDG needs assessments


The needs assessment approach: a practical illustration from the education sector

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Objectives of an MDG Needs AssessmentAnswers the question: What will it take to achieve long-term goals, such as Nigerias 5th National Devt. Plan (mid-term implementation frame work for V20:2020, 7-point Agenda, Delta States 3-Point Agenda targets and the MDGs?Translate long term goals into operational targets Develop a strategy for increasing absorptive capacity Can be used as a framework for assessing needs of other relevant sectors for the countryStrengthens coherence between planning and budget processes and guides programming of expendituresProvides a monitoring and accountability frameworkSupports the national policy dialogue and negotiations with development partners

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Approach to Aligning National/States Devt Strategies with MDGsMDG needs assessment through 2015Long-term plan aligned with the MDGs targetsNational/States Development StrategyQuantify and aggregate sub-country level inputs needed to meet national goals

What & How MuchIdentify policies and institutions to meet nationally aggregated need

How ToInform NDP, 7-Point/3-Point Agenda (Delta) implementation, including MTEF Macro framework

What needs to be done right now?

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Core Questions Answered by a Needs AssessmentWho and where are the poor?Identify the target population for each sectorMap the locations of populations in need What needs to be done?Identify critical interventionsHow much?Estimate capital and recurrent costs Estimate infrastructure and human resource needsIdentify scale up path till target date, e.g. 2015

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MDG Needs Assessment Approach

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Identification of Interventions (high impact/short time: Q/W)Specification of MDG Outcome Targets-2007 baseline, 2015 target and Scale-Up Paths (front/back loaded, linear)Estimation of Resource NeedsTarget population (macro assumptions: Total- 140,003,542, rural- 91,002,302 , urban- 49,001,240, growth rate- 3.2%, household size-4.8Specification of Coverage Targets (population served): sector assumptionsSpecification of Input Ratios (quantity or quality/efficiency)Unit Costing: macro assumptions- Exchange rate: N117/$, Inflation: 8%Review of Costing Results (realistic or affordable)Review of Development Outcomes (The MBB tool)Four excel sheets for assessing the impact of bottleneck reduction on morbidity and mortality. By imputing new frontier coverage figures into an epidemiometric model.

Stages in MDGs Costing Exercise

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Guiding Principles of MDG Needs AssessmentsPlan to relax absorptive capacity constraints through investments in human resources, infrastructure and management systems

Focus on interventions that require full or partial public financing

Undertake total, not incremental costing

Ensure maximum transparency so that assumptions can be adapted to states needs. No one-size-fits all!

Periodically revise targets/interventions based on new information and implementation of programs

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Suggested Investment ClustersRural development

Urban development

Health systems

Education

Gender equality

Environment

Science, technology and innovation

Cross-national infrastructure

Public sector management

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Table 1: Mapping of Sectors to the MDGs

GoalsSectorsDominant SectorsGoal 1: Eradicate Extreme Hunger and PovertyAll SectorsAgriculture and Health, Energy, RoadsGoal 2: Achieve Universal Primary EducationEducation, Energy and RoadsEducationGoal 3: Promote Gender Equality and Empower WomenAll SectorsEducationGoal 4: Reduce Child MortalityEnergy, Health and RoadsHealthGoal 5: Improve Maternal HealthEnergy, Health and RoadsHealthGoal 6: Combat HIV & AIDS, Malaria and other diseasesEnergy, Health and RoadsHealthGoal 7: Ensure Environmental SustainabilityEnergy, Environment, Housing, Roads, and Water and SanitationEnergy, Environment, Housing, and Water and Sanitation

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UN Millennium Project Costing Models Agriculture and Rural Development Costing ToolEnergy Costing ToolEnvironment Needs Assessment ToolHousing: Slum Upgrading Needs Assessment ToolRoads/Infrastructure Needs Assessment Tool Water and Sanitation Needs Assessment Tool Other Costing ToolsEducation Policy and Strategy Simulation Model (EPSSim), developed by UNESCO for Education SectorMarginal Budgeting for Bottlenecks (MBB), developed jointly by UNICEF, the World Bank and WHO for Health Sector

MDGs Costing Models (Customised for Nigeria)

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Agenda

Introduction

Objectives of MDG based needs assessments


The MDG needs assessment approach: a practical illustration from the education sector

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Limitations of Multi-Sectoral Needs AssessmentsQuestion addressed: Which interventions are needed across sectors to achieve the Goals, and what are the associated requirements in terms of human resources, infrastructure, and financing?

Limitations:Time intensiveHigh data needs Cross-sectoral dynamics require iterative adjustment of coverage targetsMacroeconomic dynamics need to be modeled with the help of separate toolsComplementary policies and institutional reforms are not included

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Comparison with ICOR-based Approaches

Question addressed: What aggregate level of investment is needed to meet the income poverty goal?

Limitations compared to needs assessment:Human resource and infrastructure requirements cannot be estimatedNo guidance to programming public expendituresNo separation of public and private investments or composition of investmentsNo inclusion of MDG interventions that do not have a direct impact on growthBased on historical incrementaI cost /output ratios (ICORs) and poverty elasticities that apply only to marginal changes

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Comparison with Approaches Based on Input-outcome Elasticities

Question addressed: What aggregate level of investment is required to meet individual Goals?

Limitations compared to needs assessment:Can only model a small number of aggregate variables across few sectors Limited by number of variables and equations necessary to close the models mathematicallyNo guidance to programming public expendituresHuman resource and infrastructure requirements not estimatedCould lead to double-counting of interventions across sectorsBased on historical elasticities that apply only to marginal changes

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Comparison with Approaches Based on Aggregate Unit Costs

Question addressed: What is the gap between current expenditures and those required to achieve each Goal?

Limitations compared to needs assessment:Historical/current unit costs inadequately estimate future expenditures No guidance to programming expenditures Human resource and infrastructure requirements not estimatedNo differentiation between capital and operating costsAddress only a subset of interventions within a sector

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Agenda

Introduction

Objectives of MDG based needs assessments


The MDG needs assessment approach: a practical illustration from the education sector

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MDG Needs Assessment MethodologyUN Millennium Project

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Education Needs Assessment Approach (1)TOTAL COSTSStudents reached by interventionsCost components for key interventions Demographic data

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Education Needs Assessment Approach (2)Direct and indirect financial costs _Estimation of teachers needed

Estimation of classrooms neededCapacity Requirements__= Total Education Needs

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Key Assumptions for Education Needs AssessmentInterventions: Comprehensive set of interventions to achieve primary education, and literacy on the demand and supply side

Targets: Coverage targets should aim at meeting MDGs for entire population in need

Investment model: Service delivery models should reflect local needs and education structure; unit costs should reflect costs for reaching hard-to-reach populations.

Financing: User fees should be eliminated for primary education

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Interventions Needed to Meet Universal Primary Education (UPE) GoalDirect Primary Education interventions: infrastructure, human resources, learning materials, demand side interventions, etc

Secondary Education interventions because:Availability of secondary education increases parents incentive to send children to primary school

Secondary school graduates are needed to meet supply of primary school teachers

Adult literacy programsRadio programmes

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Primary School Interventions (1/2)* Not included in MP preliminary cost estimates

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Primary School Interventions (2/2)

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Primary Education MDG Targets in Education Tool

Primary completion rates to reach 100 percent by 2015

Gender parity achieved by 2005

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Post-Primary Interventions and Targets

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Estimating Resource Needs: Education Needs Assessment Tool

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Key Drivers of Cost and VariationThe key drivers of cost and variation across needs assessments are:

Differences in population in need

Differences in choice of interventions

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Thinking About Nigerias Needs What are the core set of interventions from the demand and supply side?

Are there additional interventions needed for specific regions/sub-populations (State-specific)?

How does the overall goal of UPE link to annual operational targets of enrolment and completion?

How will targets for secondary education be set, and linked to increasing primary coverage and increasing human resource needs in other sectors?

What are the important capital and recurrent expenditures that need to be scaled up to achieve the Vision 20:2020/7-point Agenda/State Agenda/MDG targets?

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Nigeria MDG Costing Summary of FindingsA three-year partnership (2006-08) with key MDAs, NPC, BOF and UNDP to establish cost and funding requirements for the achievement of the MDGs in 8 sectors. Results published in 2009Total cumulative investments of $248bn are needed between 2007 and 2015On an annual basis, the cost rises from $15bn in 2007 to $43bn in 2015An annual average of $28bn (N4 trillion)Average annual per capita cost of $164 This is higher than other Sub-Saharan African countries due to a lower baseline, more ambitious targets and infrastructural challengesDetails in Tables 1 & 2

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Table 1: Aggregate and Per Capita MDG Cost and Distribution by Economic Composition

YearAnnual TotalRecurrentCapitalPer Capita(US$ b)(US$ b)(US$ b)(US$)200715.368.756.61106.30200817.3610.416.95116.43200919.6512.217.44127.72201022.6614.608.05142.67201126.1717.169.01159.66201230.1119.9210.19178.04201334.0923.1010.99195.28201438.8226.5212.30215.49201543.3329.3114.03233.11Cumulative247.54161.9785.571,474.70Annual Average27.5018.009.51163.86

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Table 2: Sectoral Distribution of Aggregate Cost of Achieving the MDGs

SectorCumulative (2007-2015)(US$b) Annual Average(US$ b)Share(%)Agriculture55.126.1222.3Education48.045.3419.4Energy38.844.3215.7Environment1.770.200.7Health34.943.8814.1Housing6.420.712.6Roads39.744.4216.1Water and Sanitation22.682.529.2

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MDGs Costing

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Funding gaps: Given existing resources, an average funding gap of around $6bn per year is predicted to remain:Scaling-up options include domestic resource mobilization, Internally-generated revenue by States and Local Governments, and creating the enabling environment for sustained Foreign Direct InvestmentAlternative strategies for public-private partnerships to increase infrastructure investmentCoordinating development partner interventions to improve the effectiveness of aid

MDGs Costing Summary (Contd)

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MDGs Costing: Next StepsIntegrating the costing methodology into the planning processScaling-up to contribute to 7-Point Agenda and Vision 2020Integrating the costing into the budgetary processesThrough the MTSS and annual budgetsMaking ongoing use of the capacity and skills that weve generated in the key MDAsStepping-down costing to States and Local GovernmentsHelping State Governments to prepare realistic investment paths for 7-Point Agenda and Vision 2020Building capacity in State MDAs for costing of annual budgets and sector plansIntegrating costing into planning and budgetary processes at the sub-national level

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*Reaching MDG4 in NigeriaNew estimates

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*Reaching MDG5 in NigeriaNew

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mdgs needs assessment/costing: why mdgs-based planning-2: technical issues

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