Immediately after the 2003 elections, President Obasanjo in his second term of office announced ambitious reforms aimed at laying the foundations for economic growth, employment generation, poverty reduction and more transparency and accountability in government. In July 2003, he appointed a strong economic team at the federal level which quickly developed a comprehensive programme: the National Economic Empowerment and Development Strategy (NEEDS) which was launched in May 2004. The NEEDS main elements include empowering people and improving social service delivery, growing private sector and focusing on no-oil growth, and changing the way government works and improving governance. The third pillar of NEEDS, improving governance is viewed as an imperative -the most important underlying factor for a successful attainment of goals of NEEDS and meeting the Millennium Development Goals of halving poverty by year 2015, and the State and Local Governments being closer to the populace, are viewed as being critical to successful implementation of national development strategies. Consequently, the new federal administration through the National Planning Commission (NPC) and Federal Ministry of Finance intensified dialogue with States of the federation on economic development and governance reform issues, encouraging each State to develop its own State Economic Empowerment and Development Strategy (SEEDS).

The international community including development partners recognizes that the country is at a turning point, one that requires significant, consistent response from the international community. The belief is that the country’s reform and development efforts need strong to international support to be sustainable.

The whole idea of NEEDS/SEEDS was developed through a strong hom-grown process, underscoring the government’s firm commitment to an ambitious development agenda, aimed at changing behaviours and placing Nigeria on a path of sustainable long term growth and poverty reduction. This commitment was reflected in the number of State Governments which embraced SEEDS and the accompanying reform process aimed at improving governance at State level.

The States (and the local governments which fall under their purview), is the tier of government principally responsible for the delivery of basic social services to the population. Therefore the attainment of the country’s poverty reduction and development objectives and more generally the MDGs, which the international community and development partners are committed to achieve, largely depends on state governments’ capacity to discharge their basic service delivery mandate in an efficient and accountable manner.

It is against this background that development partners in Nigeria including the World Bank, DFID, EU, UNDP, USAID and CIDA agreed to intensify support to States starting with provision of technical assistance to the states to develop and implement their SEEDS. There was also an agreement between the development partners, National Planning Commission and the Federal Ministry of Finance that additional resources should be directed to hose States which embark on the most effective development programmes and support changes in governance, transparency and accountability. Additional resources to well-performing States was viewed in terms of increase in allocation to pursue their development programmes and more donor aid and support. It was agreed that the other States that perform less would continue to receive technical assistance particularly in capacity building that will directly contribute to improved performance.

With the aim to assess and identify reforming State Governments in a transparent and fair manner, development partners, working with the National Planning Commission, set out to develop a set of performance benchmarks that can be used as an appropriate tool to assess performance of States in developmental governance, reforms and project implementation under the SEEDS programme. The benchmarks so derived were well aligned to international best practices in governance, fiscal management and transparency. The benchmark assessment tool was adapted from standard performance assessment tools in use internationally like the Public Expenditure and Financial Accountability (PEFA) standards popular in Europe and amongst the Breton Wood organisations.

1. POLICY: Does the State’s policies address the real needs of the people? Have all key stakeholders had a chance to have their say in the policies: Are the policies widely known to the people of the State?

2. BUDGET and FISCAL MANAGEMENT: Does the State manage its budget and public funds in a transparent way so that resources are directed at achieving the priorities of the State? Is there responsible and prudent fiscal management that effectively contains the negative impacts of revenue fluctuation?

3. SERVICE DELIVERY: What efforts is the State making to improve service delivery to the citizens, both in terms of reach and standards? What is the quality of service rendered?

4. COMMUNICATION and TRANSPARENCY: Does the State plan and implement policies in a transparent and accountable manner? Is procurement open? Are there measures against corruption? Do citizens have opportunity to question their leaders? How easily can citizens obtain information about the State’s finances?

Each of the four benchmarks was assessed by a range of detailed indicators. The assessment team assigned scores according to the performance of each State. The assessment was meant to be evidence-based implying that the State being assessed must present acceptable documentary (hard) evidence to convince the assessment team.

The set of benchmarks are widely accepted amongst donors and the NPC as an appropriate tool to measure performance of States. It is believed that the benchmarks will clearly identify States that demonstrate a clear commitment to improved governance, service delivery, transparency and accountability and the States will then be eligible both for special grants from the federal government as well as a package of donor assistance to support their state level programmes.

All the 36 states of the federation were expected to put themselves forward to be assessed. NPC got together with the development partners and through a fair and transparent process, recruited an independent firm; the African Institute for Applied Economics (AIAE) as the supervisory firm to conduct the assessment. This done, a team of assessors made up of experts in various fields were also recruited and provided with necessary training for the exercise through joint donor effort including DFID, UNDP and World Bank.

29 States in the first instance indicated interest to be assessed. They were grouped into two, made up of 15 States for the first round 5-18th June and 14 states for the second round 19th June to 2nd of July. The remaining states were prevailed upon to be benchmarked and of the lot, only Bayelsa State opted out leaving a total of 35 States and the Federal Capital Territory (FCT) participating in the performance assessment exercise.

The exercise has been completed and was widely acclaimed to thorough and transparent. Independent teams of experts, jointly commissioned by the NPC and development partners, visited each State that puts itself forward for assessment. The independent quality control firm (the African Institute for Applied Economics) appointed through a competitive process managed the exercise and took responsibility for quality assurance.

The work of testing and assessing the states was carried out by a team of 3 consultants assigned to each state. The consultants were carefully selected with a condition that they must have a profile which include adequate experience in Public Expenditure Management and budget processes in Nigeria, policy and strategy analysis and government accounting and reporting. The donor community nominated at least an observer to attend the assessment visit to each State.

Accordingly, each State was assigned a team of 3 assessors, 1 supervisor from the quality control firm and the observer from the international community. Each person had a role to play in the exercise as indicated earlier. The supervisor coordinated the entire exercise; the assessor conducted the assessment while the observer/s was there to observe and ensure compliance with the rules. The teams of experts carried out an in-depth assessment of the progress at state level in designing and implementing key reforms and better service delivery, as embodied in, but not exclusively linked to, the State’s Economic Empowerment and Development strategy (SEEDS).

All efforts were made by the development partners to eliminate bias and ensure a fair and consistent pattern of evaluation. For instance, members of the assessment teams were not be allowed to take part in the assessment of any state in their own geo-political zone, or any state where they have previously been employed. Consultants who have participated in supporting the production of any state’s SEEDS document were not eligible to participate in the evaluation of that state. In addition, assessment by the field team were submitted to the quality control firm for harmonisation and only scores which were backed up by hard evidence were allowed.

IMPLICATIONS OF THE OUTCOME OF SEEDS BENCHMARKING

Given the broad-based nature of the assessment, any States selected from the exercise could be said to be running a close to modern government in terms of development programmes, transparency and inclusiveness. The States will also be leading in prudent management of public funds for implementation of projects and programmes that are crucial to the development of the State and welfare of its people.

The implication of the exercise is that a couple of States will be selected based on their performance in the assessment as “SEEDS compliant States” or lead States. What this means is that these selected states from the next financial year will likely receive additional budgetary allocation from the federal government and in addition, donor partners in the country are intending to add their own windfall to the fortunes of those states. The donors have clearly indicated willingness to use the results of this exercise as a platform to identify states that can be given support and areas in which these states can be supported. An appropriate carrot to be provided by the donors and the FGN is indicated as essential to the exercise; however the size and scope of this carrot is yet to be finalised.

In any case, and more importantly, the assessment of performance of States marks a clear deviation from the past; there is an effort to encourage healthy competition amongst the States of the federation to champion development and improvement of the welfare of their citizens. For the first time, a merit-based system backed by a transparent performance assessment process is being introduced to herald State governments to begin to focus on development priorities of the States. Clearly, well-performing States will serve as role models for the others and the good practices from the States will be disseminated for the others to copy.

The present SEEDS document developed by nearly all the 36 States is a self-critical assessment of poverty and a strategy for the State’s development and growth, linked to improved financial management and service delivery in key areas such as health, education, water and basic services (proposing a social charter which recognizes the right of Nigerians to government services that provide the basic needs for life). The donor community anticipates that with the development of such detailed sector strategies it will clearly show the roles and responsibilities of the three tiers of Government and support from donors in service provision. This is expected to eliminate waste and duplication of effort and ensure that increasingly, public spending is providing these services (including expenditure on basic economic infrastructure transport, roads, and improved communications). These, plus transparency, and development of a budget are key performance benchmarks. This is why the assessment of performance of State governments and the implementation of their SEEDS is such a significant step forward for the nation. DFID, World Bank and the EU have openly communicated that they would be using the outcome of the benchmark assessment exercise to “back the reforming Governments” with additional support. In fact, the EU used the occasion of the announcement of the kickoff of the assessment in a workshop for States in Abuja to announce that they would be concentrating their support in six(6) leading States from the exercise.

The SEEDS document also spells out an ambitious agenda for fighting corruption and addressing the issues related to a large and under-performing public sector. Underlying SEEDS is the philosophy that government must change to allow space for the private sector to function effectively and invest in people, in the delivery of services. State governments, which are identified, as clearly reformist are deemed to be creating the right environment for inflow of investment and maintaining an open system that encourage true partnership for development. The States will be helped in addressing the issues of more effective governance including strengthening of communication and participatory governance systems. This involves the generation, analysis and dissemination of information and better coordination with local government areas (LGAs) and other donors in taking forward a State’s development agenda.

The States to be selected from the process will also enjoy immense credibility as well as the support professed by the donor community and the federal government. It will also signal that the government is working towards achieving standards applicable in developed economies. This has far-reaching implication for investment, tourisms and partnerships for development.

While State governments are receiving accolades for their commitment to openness by putting themselves forward en masse to be assessed, the federal government deserves immense praise for its reform, anti-corruption and transparency programmes. It is widely believed that the reform programmes of the federal government are taken roots and having a strong knock-on effects on States. Enormous commendation should go to the National Planning Commission under the steer of the Chief Economic Adviser to the President who spearheaded the SEEDS Benchmarking assessment. It is hoped that the process will continue and develop to become a strong continuous improvement tool in the hand of all levels of government in Nigeria.

On the next page are tables showing the comparative performance of the states.