1. NEEDS Costing and Prioritization Costing a NEEDS Assessment

2. The Bottom-up Approach 5 Steps Guiding Principles Salaries and Allowances Outline

3. Approaches to Costing Bottom-up approach based on sectoral or program analysis Field studies Baseline statistics Sector-specific, disaggregated unit costs Macro approach Econometric models, estimated growth and resource envelope Iterations Bottom-up/macro/expected commitments

4. The 5 steps in a bottom-up cost approach

5. Which policies and interventions (broadly) would likely put Nigeria forward on a path for fulfilling MDGs and reducing poverty? Some of these interventions or policies, however, might not directly lead to fulfilling the MDGs but are indirectly necessary for progress. For example, in order to reach the goal of gender equality in education, access to transport or infrastructure is necessary (but not sufficient) for securing girls school enrolment. 1. Identify pro-poor policies and interventions

6. Which targets are desirable and realistic in Nigeria, and what interventions would be needed to fulfill the targets? Agree on quantitative long-term targets, and divide into short-term monitorable indicators. Result matrices are a good tool to use for dividing up MDGs and other targets into yearly indicators that are quantitative and monitorable. The number of teachers, classrooms, increase in enrolment rates, pupil-teacher-ratio (PTR), teaching materials, etc. are examples of input indicators for reaching universal primary education. 2. Identify sector-specific targets and monitorable indicators

7. Example Sudan: Baselines for MDG 2 and 3

8. Example Sudan: What does it take to achieve universal primary education?

9. Example Burkina Faso: What does it take to achieve universal primary education? Source: Clemens, Kenny and Moss (2004) The Trouble with the MDGs: Confronting Expectations of Aid and Development Success. Center for Global Development working paper 40.

10. Nigeria: What does it take to achieve universal primary education? Data source: Nigeria: Demographic and Health Survey, National Population Commission Federal Republic of Nigeria, 2003

11. Nigeria Targets – Main Interventions Eradicate poverty Primary Education for All Gender Equality Reduce Child Mortality Improve Maternal Health Combat HIV, Malaria ++ Environmental Sustainability Global Partnership

12. Estimate recurrent and capital costs of each intervention with the help of country-specific disaggregated unit costs, baseline statistics, transparent and simple cost models. Deep country knowledge and interaction with people on the ground extremely important. But also, international experience important. Sectoral or programmatic approach. 3. Estimate costs using country-specific disaggregated unit costs

13. Why is costing so diffucult? No exact rules exists Costs vary from one country to another Regional differences Transport, security, urban/rural Many teams/persons – Consistency problems

14. How to do the actual costing? No rocket science Common sense and knowledge Think local! Strategy to decrease dependence on external inputs Break down programs in activities Unit costs guidelines Baseline quantities

15. Develop a simple model for costing (Example: Education) Baseline statistics Capital and recurrent costs per student TOTAL COSTS Estimated number of students reached by the interventions Target coverage rates, for: Primary Education Secondary Education Adult Literacy Country-specific disaggregated unit costs (teachers salaries, textbooks, construction and equipment of classrooms, etc), and data on PTR, sets of textbooks, etc., Human resource needs in Teachers and Staff Infrastructure needs + + +

16. An iterative process to integrate synergies, avoid overlaps, and ensure consistency between clusters. Important with strong management and central coordination. 4. Integrate synergies, avoid overlaps, and ensure cost consistency

17. A financing strategy should be developed by matching the estimated costs for the NEEDS with available domestic resources and the possibility of either increasing domestic resources and/or reallocating the budget. In this way, financing gaps are estimated. 5. Develop financing strategy

18. Guiding Principles Capital vs. recurrent costs Investments full operational costs as recurrent costs Total vs. additional costs Total costs include resources required to sustain also current coverage levels Cash vs. accrual costs Link to budget - cash easier? Fixed vs. floating exchange rate Costs in US$, fixed rate as of today

19. Guiding Principles Factoring in absorption capacity Delays in implementation Quick wins? Emphasize use of local resources Country vs. International responsibility Ownership Keep it simple

20. Salaries and allowances Rule 1 – Link to public finances Staffing impact – costs for service delivery Rule 2 – Simplicity High, medium, low, and superscales Civil servants, local and international consultants Rule 3 – Think local Agreement on which simplified scales to use

21. Salaries and allowances Civil service salary scales Local consultants, UNDP scales? International consultants, WB scales?

22. Civil service Local consultants International consultants Superscale High Medium Low Salaries and fees, US$ per year