PROJECT INFORMATION DOCUMENT (PID)
APPRAISAL STAGE
Report No.: AB3515
Project Name
/ Rural Access and Mobility Project (RAMP I)Region / AFRICA
Sector / Roads and highways (100%)
Project ID / P072644
Borrower(s) / THE GOVERNMENT OF NIGERIA
Implementing Agency
Federal Ministry of Finance
Finance Building
Central Business Area
Nigeria
Federal Ministry of Agriculture and Water Development
Michael Okpara Way
Wuse Zone 5
Nigeria
Tel: (234) 09 523 8463/66
Environment Category / [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / January 10, 2008
Date of Appraisal Authorization / January 25, 2008
Date of Board Approval / April 29, 2008
1. Country and Sector Background
Economic performance and the transport sector: There is an intrinsic interdependence between economic development and the transport sector characteristics of an economy. The advent of massive oil wealth in the 1970s resulted in major investment in Nigeria’s transport infrastructure with special emphasis on port capacity, roads, bridges and airports. The Nigerian economic growth between 1982 and 1992, when the effects of the investment was still evident, averaged 4.2% annually. As a result of reduced federal revenue in the 1980s, there was almost no significant addition to the transport sector public assets while lack of maintenance led to a particularly sharp deterioration in many of the country’s roads. This was accompanied by a drop in economic growth to an annual average of 2.3% between 1992 and 2002. Given the large size of the country and the heavy reliance on road infrastructure for passenger transport and movement of goods, the present state of the roads has proved to be a particular constraint to economic growth.
With more than half of the population living in the rural areas and 47 percent rural accessibility to all season roads, Nigeria has more that 30 million rural inhabitants for whom the nearest road is further than 2 kilometers. Lack of good roads means that many rural communities have little or no access to basic public services such as education and health. Rural productivity and economic opportunities, especially in agriculture, are hindered by inefficient rural transport infrastructure and high transportation costs. In addition more than 50 percent of the rural roads are in a poor state of maintenance implying that inhabitants perceived to have access to rural transport do not benefit fully from the available facilities. Improved rural access roads will enhance rural development, promote better farming practices and improve production margins. With improved rural access, firms would also benefit from reliable supply of raw materials and farmers would be more inclined to utilize the vast stretches of fertile and underdeveloped land in rural Nigeria[1].
Federal Government Strategy: In 2006, the Federal Government adopted the National Policy on Rural Travel and Transport, which recognizes that transport is central to the development of a society and that improving rural mobility and easing the transport burden must constitute a significant part of the county’s poverty eradication program. The overall objective of the policy is to develop an adequate, safe, environmentally sound and economically efficient rural travel and transport system. Government, under the Federal Ministry of Agriculture and Water Development, has commenced the implementation of the policy through the Rural Travel and Transport Program (RTTP). The program is further supported by the various rural access and mobility projects to be implemented at the state level. This RAMP is part of the RTTP. Under this arrangement the role of the Federal Government is to coordinate, support the States and ensure the implementation of the policy while the responsibility for implementation of the projects rests with the States. Local Government Areas (LGAs) do not have the capacity to implement such projects but they are key stakeholders that have to be consulted on the choice and implementation of interventions.
The role of the States: Nigeria’s federal constitution assigns independent responsibilities for roads to all three levels of government – the 776 LGAs, the 36 States and the Federal Government. Each State is responsible for planning, budgeting financing and executing construction and maintenance of the roads under its jurisdiction and no federal ministry has formal oversight function on the States on road matters. However due to a general lack of capacity at the States level, many of the rural roads were built under federal programs through agencies such as the now disbanded Directorate of Food Roads and Rural Development (DFRRI). With the winding up of those programs or diminution of financial allocations, responsibility has effectively devolved to States and Local Governments. However, due to lack of clarity on the road asset ownership at the State and LGA levels, some of these roads have deteriorated to inaccessible tracks.
Kaduna State and rural transport: Kaduna State occupies almost the entire mid-central portion of the northern part of Nigeria. Its total land mass is estimated at 46,000 sq km which is about 5% of the total land area of Nigeria. At an average altitude of 500 to 1000 meters above sea level, an annual average rainfall of 1,272 mm and fertile soils, Kaduna is one of the most agriculturally endowed States in Nigeria. With about 6 million inhabitants (60% of them living in the rural parts) Kaduna is the third most populous State. It is estimated that about 80% of the population is engaged in small and medium scale farming. Apart from being a major source of livelihood, this sector remains the largest employer of labor and a key contributor to wealth, income creation and poverty alleviation. Federal, State and Local Government roads serve the state but rural roads are few, sparsely located and poorly maintained. The essence and significance of road classification has dwindled in importance and the extent of the State responsibilities with regard to state road asset management is unclear. The Kaduna State Economic Empowerment and Development Strategy (KADSEEDS) identifies public sector reforms and provision of road infrastructure, as part of the medium term development agenda[2].
The RAMP will benefit Kaduna State by ensuring that the rural roads serving the communities in the selected areas are improved and kept in a high level of maintenance during a period of five years. The project will also benefit the entire State by ensuring that critical river crossings are provided. For the purpose of ensuring sustainability, the project will support State Government’s capacity to manage the road transport sector in a sustainable manner by strengthening public institutions that are directly responsible for the management of the sector and assisting in the formulation of a strategy that would outlive RAMP.
2. Objectives
The Project Development Objective is to provide improved rural transport infrastructure in support of rural economic development activities and for better access to socioeconomic amenities by rural communities in Kaduna State and assist Kaduna State to manage the State road assets in a sustainable manner. RAMP has two components: upgrading, rehabilitation and maintenance of rural transport infrastructure; and institutional strengthening, reforms and capacity building. The rural transport infrastructure component will support the upgrading, rehabilitation and maintenance, through long term performance based contracts, of about 600 km of rural roads in eight prioritized intervention areas and about 130 river crossings spread across the entire state.
3. Rationale for Bank Involvement
There are three main reasons in support of Bank involvement in RAMP: the Bank’s internal policy towards infrastructure development in Sub-Saharan Africa; Bank’s partnership strategy for Nigeria; and the pivotal role that transport infrastructure plays towards poverty reduction. One of the objectives of the Bank, in line with the Africa Action Plan, is to assist Sub-Saharan Africa countries close the infrastructure gap by increased resource allocation towards specific sectoral outputs. In transport, the deliverables include rehabilitation of road networks, implementation of reform programs and establishment of sustainable financing and management mechanisms. The RAMP will provide additional resources to the State and has all the three deliverables.
The Bank and DfID, in their joint 2005 Country Partnership Strategy (CPS) for the period 2005 to 2009, which in turn is based on the National Economic Empowerment and Development Strategy (NEEDS), purposed to step up financial and technical support towards Government’s reform efforts and also to help finance investments necessary to remove obstacles to growth and development. The CPS proposed specific activities which include financing investments in transport infrastructure to support the Federal Government as well as selected well-performing states. Kaduna State was classified as a lead state together with Lagos, Kano Enugu and Cross River States. The ongoing review of the CPS recommends continued engagement by the partners in the promotion of non-oil growth within well performing lead states. RAMP will therefore be part of a more concerted effort by the partners to help Nigeria unlock the growth potential in States like Kaduna. In addition, it is well aligned to both the NEEDS and the State SEEDS.
The Nigeria Competitiveness and Growth Report[3] identifies poor infrastructure as a binding constraint to economic development. Poor roads are estimated to exact a cost on the economy at about 3 percent of GDP, increasing delivery times and thereby causing as much as 15 to 20 percent of agricultural produce not to reach markets. The report recognizes that Nigeria’s major problem especially in the transport sector is not so much the lack of financial resources but rather the manner in which these resources are utilized. It makes strong recommendation towards reforming the road sector and thus ensuring efficient utilization of local resources and unlocking economic growth especially in the rural areas that have a high potential for development.
4. Description
RAMP has two components, Component A: Upgrading, Rehabilitation and Maintenance of Transport Infrastructure and Component B: Institutional Strengthening, Reforms and Capacity Building. The activities within each one of these two components are detailed below:
Component A: Upgrading, Rehabilitation and Maintenance of Transport Infrastructure
The rural transport infrastructure component of the project will support the upgrading, rehabilitation and maintenance of about 600 km[4] (subject to ongoing design work) of rural roads selected from the eight top prioritized intervention areas and about 130 river crossings spread across the entire state. There will be two sub-components within Component A: (i) Improvement and maintenance of roads within eight intervention areas of the state through long term output and performance based contracting (OPRC), and (ii) Construction and rehabilitation of selected river crossings across the entire state. There will be four OPRC packages, two in Giwa, part of Birnin Gwari, part of Igabi and part of Zaria, while part of Kagarko, part of Jema’a, part of Jaba, part of Zango Kataf and part of Kachia will form the second package. River crossings will be grouped into six packages, covering the whole of Kaduna but excluding river crossings on roads under OPRC..
A study was carried out to assess the rural road transport needs of the entire state and to prioritize the intervention areas. The delineated intervention areas were prioritized by attaching relative importance to: population; land area; population density; number of primary/post primary schools; schools enrolment; school to land area; number of boreholes to land area; number of health facilities; health facilities to land area; poverty index; number of markets; agricultural outputs (in tons); FADAMA/Irrigation farms; and cottage industries. The criteria for screening, prioritization and selection of links/networks were cost-effectiveness, population of communities along the link, traffic volume along the link and community preference.
Regarding river crossings, a comprehensive list of 330 river crossings compiled by the State Ministry of Works and Transport based on requests by the Local Governments in the State were classified into categories depending on the complexity of the engineering interventions, and size of facility needed, with higher priority attached to the less complex structures. Other categorization criteria were the importance of the crossing to the immediate beneficiaries (which was determined by traffic volume, accessibility importance, economic and social importance), the importance of the crossing as part of a road network, the potential for the crossings to contribute towards socio economic activities such as agriculture, industry and commerce, tourism and social institutions including schools and hospitals. The final criterion was the location of the river crossing and hence it’s potential to contribute to rural accessibility, with more priority accorded to crossings located away from urban centers. The relative importance of each criterion was established and weighted, with the higher weight being attributed to criteria relating to rural poverty and least weight on financial implications.
Component B: Institutional Strengthening, Reforms and Capacity Building
The five main activities under capacity building component are: project management; institutional strengthening and capacity building; institutional reforms; cross cutting issues including road safety and HIV/AIDS; and Preparation of state funded follow-on project These activities are intended to buttress the sustainability aspects of the project.
5. Financing
Source: / ($m.)BORROWER/RECIPIENT / 11.99
International Development Association (IDA) / 60.00
Total / 71.99
6. Implementation
The project stems from the Federal Government’s Policy on Rural Travel and Transport which, due to Nigeria’s federation character, was sponsored by the then Federal Ministry of Agriculture and Rural Development. The Ministry has a program, the Rural Travel and Transport Program (RTTP) which is designed as the vehicle for the implementation of the policy. RAMP is one of the many similar projects aimed at assisting the states meet the strategic vision of Government. Since the States are the beneficiaries, the actual project implementation is to be carried out at the state level while the role of the Federal Government is to facilitate project formulation and coordinate the implementation in the States.
The then Federal Ministry of Agriculture and Rural Development established the Federal Project Management Unit (FPMU) in Abuja, to manage the implementation of RTTP, initiate the preparation of RAMP and coordinate all activities related to this and other similar projects. FPMU reports to the Permanent Secretary of the Ministry through the office of the Director: Department of Agriculture. It is headed by a Deputy Director (in Nigeria’s Civil service), a professional engineer with extensive knowledge on rural transport infrastructure and proven skills to manage such a project. The unit has public service officials as well as qualified personnel recruited through an open and competitive process in the fields of financial management, audit, procurement, contract management and engineering. The procurement and financial management capacity of the unit was assessed and found satisfactory. The Federal Ministry of Agriculture and Water Development also established a National Technical Steering Committee (NTSC) to provide the necessary high level oversight for the FPMU. The NTSC includes all stakeholder Federal Ministries as well as officials from the State Governments participating in the rural travel and transport program.