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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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
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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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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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
Agenda
Introduction
Objectives of MDG based needs assessments
Overview of different costing methodologies
The MDG needs assessment approach: a practical illustration from
the education sector
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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
Agenda
Introduction
Objectives of MDG based needs assessments
Overview of different costing methodologies
The MDG needs assessment approach: a practical illustration from
the education sector
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Millennium Development Goals: Putting People First
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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Millennium Development Goals: Putting People First
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