IDocument of The World Bank FOR OFFICIAL USE ONLY Report No: 54888-NG PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILITY TRUST FUND IN THE AMOUNT OF US$6.8 MILLION TO THE FEDERAL REPUBLIC OF NIGERIA FOR A SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION June 8, 2010 Agricultural and Rural Development Sustainable Development Department Country Department AFCW2 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective June 1, 2010) Currency Unit = Naira 1 US$ = NGN151.75 1 US$ = SDR 0.68 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank ADP Agricultural Development Program ADPEC Agricultural Development Program Executive Committee CAADP Comprehensive African Agricultural Development Program CDD Community Driven Development CI Composite Index for the Enabling Environment for Sustainable Land Management CMU Country Management Unit CPS Country Partnership Strategy DA Designated Account EIG Economic Interest Group EMCAP Economic Management Capacity Building Project ERGP Economic Reform and Governance Project ESMF Environmental and Social Management Framework FADPEC Federal Agricultural Development Programs Executive Committee FCA Fadama Community Association FCT Federal Capital Territory FEM Finance and Expenditure Management FGN Federal Government of Nigeria FM Financial Management FMAP Financial Management Action Plan FMARD Federal Ministry of Agriculture and Rural Development FMAWR Federal Ministry of Agriculture and Water Resources FMD Financial Management Department FME Federal Ministry of Environment FMF Federal Ministry of Finance FPM Financial Procedures Manual FPFMD Federal Project Financial Management Division FUG Fadama User Group GEF Global Environment Facility GDP Gross Domestic Product GPN General Procurement Notice IAU Internal Audit Unit ICB International Competitive Bidding ICRISAT International Crops Research Institute for the Semi-Arid Tropics IDA International Development Association IFPRI International Food Policy Research Institute IFR Interim Financial Report IRR Internal Rate of Return ii IPSAS International Public Sector Accounting Standard LDP Local Development Plan LFD Local Fadama Desk LFDC Local Fadama Development Committee LGA Local Government Area M&E Monitoring and Evaluation MDG Millennium Development Goal MIS Management Information System MTR Mid-term Review NCB National Competitive Bidding NEEDS National Economic Empowerment and Development Strategy NEPAD New Partnership for African Development NFCO National Fadama Coordination Office NFDO National Fadama Development Office NFRA National Food Reserve Agency NFTC National Fadama Technical Committee NGO Non-governmental Organization NPAFS National Program for Agriculture and Food Security NPC National Planning Commission NPV Net Present Value OP Operational Policy (of the World Bank) PAD Project Appraisal Document PDO Project Development Objective PFM Project Financial Management PFMU Project Financial Management Unit PIM Project Implementation Manual PMP Pest Management Plan PRA Participatory Rural Appraisal RPF Resettlement Policy Framework SEEDS State Economic Empowerment and Development Strategy SGCBP State Governance and Capacity Building Project SFCO State Fadama Coordination Office SFDC State Fadama Development Committee SFDO State Fadama Development Office SFTC State Fadama Technical Committee SIP Strategic Investment Program for SLM in Sub-Saharan Africa SLM Sustainable Land Management SOE Statement of Expenditure TOR Terms of Reference UNCCD UN Convention to Combat Desertification Vice President: Obiageli Katryn Ezekwesili Country Director: Onno Ruhl Sector Director Inger Andersen Sector Manager: Karen McConnell Brooks Task Team Leader: Abimbola Adubi iii FEDERAL REPUBLIC OF NIGERIA SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION CONTENTS Page I. Strategic context and rationale ........................................................................................... 1 A. Country and sector issues................................................................................................... 1 B. Rationale for Bank and GEF involvement ......................................................................... 4 C. Higher level objectives to which the project contributes ................................................... 5 II. PROJECT DESCRIPTION ................................................................................................ 6 A. Financing instrument.......................................................................................................... 6 B. Project development and global environment objective and key indicators ...................... 6 C. Project approach of the GEF grant ..................................................................................... 7 D. Project components ............................................................................................................ 7 E. Lessons learned and reflected in the project design ......................................................... 12 F. Alternatives considered and reasons for rejection ........................................................... 14 III. IMPLEMENTATION ...................................................................................................... 15 A. Institutional and implementation arrangements ............................................................... 15 B. Monitoring and evaluation ............................................................................................... 18 C. Sustainability and replicability......................................................................................... 18 D. Partnership arrangements ................................................................................................. 20 E. Critical risks and possible controversial aspects .............................................................. 20 F. Grant conditions and covenants ....................................................................................... 21 IV. APPRAISAL SUMMARY .............................................................................................. 22 A. Technical .......................................................................................................................... 22 B. Fiduciary .......................................................................................................................... 22 iv C. Social................................................................................................................................ 24 D. Environment ..................................................................................................................... 25 E. Safeguard policies ............................................................................................................ 26 F. Policy exceptions and readiness ....................................................................................... 27 Annex 1: Country and Sector or Program Background ........................................................... 28 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies..................... 49 Annex 3: Results Framework and Monitoring......................................................................... 51 Annex 4: Detailed Project Description .................................................................................... 55 Annex 5: Project Costs............................................................................................................. 72 Annex 6: Implementation Arrangements ................................................................................. 73 Annex 7: Financial Management and Disbursement Arrangements ....................................... 80 Annex 8: Procurement Arrangements ...................................................................................... 91 Annex 9: Incremental Cost Analysis ....................................................................................... 98 Annex 10: Safeguard Policy Issues........................................................................................ 107 Annex 11: Project Preparation and Supervision .................................................................... 110 Annex 12: Documents in the Project File .............................................................................. 112 Annex 13: Statement of Loans and Credits ........................................................................... 113 Annex 14: Country at a Glance .............................................................................................. 116 Annex 15: Climate Risk Perceptions and Adaptation among Nigerian Farming Communities118 Annex 16: Sustainable Land Management in Nigeria: Towards a Multi-sector Investment Program .................................................................................................................................. 124 Annex 17: Summary of Fadama III Project Components ...................................................... 127 Annex 18: Maps ..................................................................................................................... 129 v FEDERAL REPUBLIC OF NIGERIA NIGERIA SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION PROJECT APPRAISAL DOCUMENT AFRICA AFTAR Date: June 8, 2010 Team Leader: Abimbola Adubi Country Director: Onno Ruhl Sectors: Crops (60%); Irrigation and drainage Sector Director: Inger Andersen (15%); Animal production (10%); Agricultural Sector Manager/Director: Karen Mcconnell extension and research (10%); Forestry (5%) Brooks Themes: Land administration and management Project ID: P109737 (40%); Other environment and natural Focal Area: Land degradation resources management (40%); Environmental Environmental Assessment: Partial policies and institutions (20%) Assessment Joint IFC: Lending Instrument: Specific Investment Loan Joint Level: Project Financing Data [ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m): 0.00 Proposed terms: Financing Plan (US$m) Source Local Foreign Total BORROWER/RECIPIENT 0.00 0.00 0.00 Global Environment Facility (GEF) 6.80 0.00 6.80 Total: 6.80 0.00 6.80 Borrower: Federal Republic of Nigeria Responsible Agency: Federal Ministry of Agriculture and Rural Development FCDA Secretariat Area 11, Garki Abuja Federal Capital Territory Federal Republic of Nigeria Federal Ministry of Finance Ahmadu Bello Way vi Abuja Federal Capital Territory Federal Republic of Nigeria Federal Ministry of Environment Federal Secretariat Complex Shehu Shagari Way Abuja Federal Capital Territory Federal Republic of Nigeria National Planning Commission NPC Building Central Business District Abuja Federal Capital Territory Federal Republic of Nigeria Estimated disbursements (Bank FY/US$m) FY 2010 2011 2012 2013 2014 Annual 0.00 1.75 1.18 2.61 1.26 Cumulative 0.00 1.75 2.93 5.54 6.80 Project implementation period: Starts June 29,2010 Ends December 31, 2013 Expected effectiveness date: July 12, 2010 Expected closing date: December 31, 2013 Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Ref. PAD I.C. Does the project require any exceptions from Bank policies? Ref. PAD IV.F. [ ]Yes [X] No Have these been approved by Bank management? [ ]Yes [ ] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated "substantial" or "high"? [X]Yes [] No Ref. PAD III.E, Annex 7 Does the project meet the Regional criteria for readiness for implementation? [X]Yes [] No Ref. PAD IV.F. Development and Global Environment Objective Ref. PAD II.C., and Annex 3 The development and global environment objective of the GEF incremental grant is to improve the enabling environment for scaling up sustainable land management in participating communities.1 1 The project development objective of the existing approved credit (with which the GEF incremental support will integrate) is to increase the incomes of users of rural land and water resources. vii Project description Ref. PAD II.D., and Annex 4 Scaling up SLM Practice, Knowledge and Coordination will be a three-and-a-half-year incremental GEF grant to the Federal Republic of Nigeria, focused on mainstreaming Sustainable Land Management (SLM) in Nigeria's agricultural sector. The incremental GEF funding will support the following activities that are fully integrated into the baseline SIL, the Third National Fadama Development Program (Fadama III): 1) Component A: Capacity Building, Communications and Information Support. This component will provide training and communications outreach on SLM planning and practice at local, state and federal levels, multi-sector coordination on land management investment at state and federal levels, training on local land use planning, as well as small community sub-project awards for existing communities that are successfully implementing SLM sub-projects under the baseline Fadama III operation. 2) Component B: Monitoring, Evaluation and Knowledge. This component supports development of ecological and process monitoring tools, and also establishes a technical knowledge base on SLM, sustainable agriculture and related climate risk. Which safeguard policies are triggered, if any? Ref. PAD IV., and Annex 10 The Project falls into Environmental Category B as no adverse long-term impacts are anticipated. The same safeguards policies are triggered by this incremental Project as by the baseline Fadama III Project: (i) Environmental Assessment (OP/BP 4.01), (ii) Natural Habitats (OP/BP 4.04), (iii) Pest Management (OP/BP 4.09), (iv) Forests (OP/BP 4.36), (v) Projects on International Waterways (OP/BP 7.50), and (vi) Involuntary Resettlement (OP/BP 4.12). The three safeguards instruments of ESMF, RPF and PMP that were prepared by the Government for the baseline Fadama III Project were reviewed and cleared by the Bank for this baseline Project. The safeguard instruments were re-disclosed in the country and the Bank's InfoShop on December 1, 2009. Significant, non-standard conditions, if any, for: Ref. PAD III.F. Board presentation: None. Grant effectiveness conditions: The Project shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that at least one Subsidiary Agreement has been executed on behalf of the Recipient and one Participating State, or that at least one Subsidiary Agreement concluded pursuant to the Financing Agreement dated viii November 24, 2008, between the Recipient and International Development Association for the Third National Fadama Development Project (Cr. 4494-NG) has been amended by the Recipient and one Participating State for the purpose of on- granting a portion of the proceeds of the Grant, under terms and conditions which shall have been approved by the World Bank. Covenants applicable to project implementation: Implementation of the GEF incremental grant is fully integrated into the existing design and implementation arrangements of Fadama III; no additional institutional structures or lines of accountability will be created. The Fadama III project is already effective and under implementation. Its implementation covenants are fully complied with, FM and procurement manuals are in place and there are no policy exceptions. Implementation Covenants for the proposed GEF grant are therefore the same as for Fadama III: Standard requirements covering organization and staffing of program units, management arrangements, provisions for procurement, and financial management are sufficient. As with the Fadama III baseline project, the proposed incremental GEF Project will utilize the existing institutional structure of the Federal Ministry of Agriculture and Rural Development, its federal and state level coordination offices as well as state ministries of agriculture without creating any add-on project implementation unit. Project management is currently based on a decentralized, demand-responsive structure that grants community organizations as much decision-making authority as possible, and promotes community ownership of and responsibility for operations and maintenance of infrastructure investments funded under the Fadama III baseline project. Withdrawal Conditions; Withdrawal Period: for payments to be made with respect to category (4) expenditures to any Participating State unless the Recipient has furnished to the World Bank evidence satisfactory to the World Bank that the concerned Participating State has: (i) duly established its FCAs in form and substance satisfactory to the World Bank; and (ii) the Subsidiary Agreement between the Recipient and the concerned Participating State has been duly executed by the parties thereto in form and substance satisfactory to the World Bank ix I. STRATEGIC CONTEXT AND RATIONALE A. Country and sector issues BACKGROUND 1. Seventy-six million rural Nigerians, mostly poor, are reliant upon natural wealth, while incomes and productivity in the rural areas are low and stagnant. The economic and ecological services provided by Nigeria's renewable natural resource base constitute the rural poor's only safety net, while also serving as the foundation of the country's non-oil economic growth and food security. As such, sustainable agricultural development depends on land management practices that conserve soil and water, improve soil fertility and the biological potential for productivity, while allowing communities to adapt to climate variability and future change.2 Not only do such practices help deliver important local benefits, they also help secure global environmental benefits such as carbon accumulation in biomass and soil, improved nitrogen cycling, higher water tables, in-situ biodiversity, and general ecosystem function. 2. Land is the key asset of the rural poor. How productive land is managed therefore has implications for poverty alleviation and economic growth. Unsustainable land-use practices in Nigeria's floodplains3 and other areas prone to land degradation, over-exploitation of natural resources, and on-going climate variability all pose threats to maintaining the productivity of agricultural lands, as well as ecosystem functions. Deforestation, large scale land clearing, bush burning, and floodplain encroachment have taken place mainly for agricultural production. This has resulted in severe gulley erosion in the south, desert encroachment in the north, reduced vegetation cover, loss of valuable top soil, siltation of water bodies and flooding. These and other forms of land degradation are directly impacting the sustainability of key systems and livelihoods, and reducing the ability of rural communities to adapt to climate change (see Annex 15). 3. An estimated 5 percent reduction of agricultural GDP from on-farm soil erosion alone is being felt. In some areas of southern Nigeria, this has caused yield reductions of about 30 percent to 90 percent (Mbagwu et al in IFPRI 2009). Including other forms of land degradation as well as off-site costs would add to the overall economic cost. Land degradation trends resist easy quantification at the national level (CEA 2006) given data constraints, but the 1990 Global Assessment of Soil Degradation4 estimated that 27 percent of Nigeria's land had degraded sufficiently to affect productivity. This assessment estimates that approximately three quarters of the Nigerian population live in areas with "severe or very severe" land degradation. More recent analysis estimates about 90 percent of the total land area to be under some form of soil erosion, which is severe in the northern states where overgrazing, strong winds and poor vegetation cover lead to both water and wind erosion (Thiombiano and Tourino-Soto, 2007). The 2 In a study published by the U.S. National Academy of Sciences, an international team of scientists confirmed the rule of thumb emerging among crop ecologists that for each 1 degree Celsius rise in temperature above the norm during the growing season, farmers can expect a 10% decline in wheat, rice, and corn yield (S. Peng et al., Proceedings of the National Academy of Sciences, 6 July 2004, pp. 9, 971­75). 3 "Fadama" is a Hausa name for irrigable land, usually low-lying plains underlay by shallow aquifers found along major river systems. They play an important role in the recharge of the shallow groundwater system through infiltration. Fadamas have historically supported highly productive natural vegetation consisting of dense acacia scrubland, open grassland and seasonally or permanently flooded open bodies of water supporting dense emergent vegetation. In addition to providing a source of water and forage for pastoral livestock during dry season, Fadamas also support large and diverse resident or transient wildlife including herbivores, carnivores and migratory birds, many of global significance. 4 The widely cited Global Assessment of Human Induced Soil Degradation (GLASOD) was conducted for UNEP by the International Soil Reference and Information Centre (ISRIC) at Wageningen University. Soil scientists were asked to categorize soils degraded over the previous 45 years due to human intervention. 1 southern states also experience severe soil erosion due to the high rainfall and continuing deforestation. 4. The Government recognizes that land productivity is a key to achieving poverty alleviation, food security, and the Millennium Development Goals (MDGs), and that further effort is urgently needed. Nigeria's 7 Point Agenda specifically includes land degradation. The Country Partnership Strategy (CPS) notes that from mid-70s to mid-90s there was a nine-fold increase in degraded lands. It emphasizes that Nigeria's agricultural growth has resulted in expansion of area cropped and recommends that the sector must shift to intensification. To do that sustainably, improved land management practices such as establishing grazing reserves, integrated nutrient management, soil conservation structures, and agro-forestry need to be scaled up as part of an integrated approach to smallholder development. 5. Many sustainable land management (SLM) practices have positive cost-benefit ratios in agro-ecologies throughout Sub-Saharan Africa, yet adoption is low in Nigeria.5 Nigeria does benefit from some best-bet practices; for example, alley cropping using the trees Gliricidia and Leucaena reduced soil erosion by 73 percent and 83 percent respectively, while providing additional fodder, fuel, and nitrogen fixation. Erosion is also managed in Nigeria using mechanical methods or structures which serve as barriers using stones or vegetation along contour lines (Morgan 1995). These structures operate as filters, encouraging sedimentation, increased infiltration, and formation of natural terraces (Lal, 1990). The perennial Vetiver grass has served this purpose in many places in northern Nigeria (Malgwi, 1995) and is recommended as an appropriate soil conservation technology for semi-arid zones as it also withstands climate and land degradation risks such as denudation, fire, drought, and flood. These and other specific SLM practices can deliver improved yield while sequestering carbon in soil and biomass (see Annex 1 and Annex 4 para 17). In western Nigeria, no-tillage combined with mulch application had a dramatic effect, increasing soil carbon from 15 to over 32 tonnes per hectare in 4 years (Ringius, 2002). Not only is carbon sequestration critical for long-term climate stability, changes in carbon present in soil and biomass are considered proxy indicators for overall ecosystem function and land productivity and therefore the services that ecosystems deliver such as water filtering, biodiversity, soil formation and fertility, and so on. 6. Improving smallholder yield is also critical for slowing Nigeria's rapid land conversions. Forest and savannah have provided much of the new cropland for Nigeria's agricultural growth. The country now has the world's highest deforestation rate of primary forests. From 2000 to 2005 the country lost 56 percent of its primary forests (FAO 2005). Nigeria also has Africa's highest rate of total forest loss: 2.8 percent compared to a Sub-Saharan average of 0.8 percent. The forest cover is now less than a third of what it was in the 1960s. From 1990-1995, cropping expanded at an annual rate of 1.5 percent of the country's total land area, with roughly 70 percent of this expansion at the expense of relatively carbon-rich areas such as woody biomass in the savannah zones and forests in the east (World Bank 2005). Cropland and rangeland productivity growth is needed to help reduce deforestation and vegetation loss. Barriers to adoption of sustainable land management practices 7. The barriers to improved land and water management are centered on fragmented institutions, knowledge, and awareness. One obstacle in Nigeria is the lack of detailed 5 See Annex 1 appendix 3 for a cost-benefit analysis of SLM practices in Nigeria. See Annex 15 for a survey of climate risk perceptions among rural communities and how they are adapting (or not) through land management. 2 knowledge about land degradation and climate risks, including soil fertility and erosion, open access to grazing land, and deforestation rates. As a result, only limited progress has been achieved in developing and disseminating sustainable and climate-smart agricultural land management practices. Resource-conserving technologies such as use of crop rotations, agro- forestry practices, and integrated crop-livestock systems have had low rates of adoption, either because the technologies have been lacking, because farmer awareness has been low, advisory services are under-capacitated or unavailable, or because incentives to adopt have been weak (World Bank 2009). Fragmented institutional coordination, capacities, mandates, and policy have together resulted in frequent policy shifts and disincentives such as poor land access and overlapping or unclear ownership. These weaknesses are found at all levels, local to federal. One effect of this fragmentation is that the capacity to implement SLM has been compromised, resulting in, among other things, relatively weak leadership from the Nigerian government on articulating its rural land management investment priorities across sectors. Institutional performance is also hampered by knowledge gaps and fragmentation. For example, limited classification of land use capabilities exists, research and extension is isolated from investment and policy decision making, monitoring of the state of the land resource is poor, and the scientific evidence base of land degradation and climate risks is outdated, based on unclear data, or is anecdotal. Despite this, there are good SLM practices that can be scaled up (see Annex 1 and Annex 4 para 17). 8. To better address these barriers, the federal government established a multi-sector platform to improve investment programming across the many facets of land management. Its National SLM Committee6 is actively building a coordinated program-based approach to investment in land and water management. It is doing this by improving vertical and horizontal coordination of institutions and sectors involved in investment planning, analytics, and policy. The committee recognizes that land quality is critical to key sectors driving current and future economic growth, and fundamental for ecosystem sustainability and to reduce climate risk. As such, it aims to "expand the public sphere" around addressing land degradation and climate risk. The Committee is beginning to develop an Investment Framework to prioritize costed investments needed to bring SLM to scale to reduce risks from poor land management and climate variability. This is being carried out with technical assistance from teams at New Partnership for Africa's Development (NEPAD) regional Secretariat and the World Bank in the context of CAADP and the TerrAfrica partnership. Government strategy 9. The 7 Point Agenda prioritizes agricultural productivity while recognizing that action is needed to improve soil fertility, land tenure, predictability and efficiency of public sector funding, extension, environmental sustainability, and to "resuscitate Nigeria's fight against land degradation." These findings and priorities are matched by an emerging body of analytics and research, although key gaps persist in quantifying land degradation pressures, states, and even responses, as well as specific climate change impacts on the productivity and sustainability of specific rural land use systems. The 7 point agenda accords with Nigeria's Vision 2020, the country's UN National Action Programme to Combat Desertification and the National Economic Empowerment and Development Strategy (NEEDS), which explicitly recognizes the strategic importance of the agricultural sector and lists a number of special 6 Includes Federal Ministry of Agriculture and Rural Development (Committee Chair, and includes CAADP focal point), Federal Ministry of Environment, the Federal Ministry of Finance, the National Planning Commission, Nigeria Meteorological Agency, and NEPAD Nigeria. 3 initiatives and targets that the federal government intends to pursue to promote increased productivity. Government and Bank investment response 10. To help address these priorities, the Government, with Bank support, formulated the $450 million baseline investment operation, the Third National Fadama Development Project (Fadama III). The Fadama series has evolved over the years into a large-scale national community-driven rural development program different from the predecessor operations, which focused on floodplain agriculture in a limited number of States. The new project directly reaches 2.2 million households, or approximately 12 million individuals, with a proven government-led implementation mechanism with nationwide reach and credibility. The operation is an important opportunity for mainstreaming SLM to secure long-term sector goals. The existing Fadama III operation aims to increase the incomes of users of rural land and water resources through demand-driven investment and empowerment of local community groups to improve productivity. Fadama III has six components: (1) capacity building, communications and information support, (2) small-scale community infrastructure, (3) advisory services and inputs, (4) extension services (ADPs), research and on-farm demonstrations, (5) asset acquisition for economic interest groups (EIGs), (6) Project management and M&E. The Fadama III PAD explicitly notes that SLM is part of the overall Project strategy. It further notes that this incremental GEF grant will be fully integrated to help support the work on SLM. The IDA package was approved on 1 July 2008 and Fadama III became effective on 23 March 2009. The GEF grant described below provides incremental support to Fadama III components and 1 and 6 to improve the enabling environment for up scaling climate-smart SLM, particularly: knowledge fertilization, environmental and institutional monitoring tools, institutional capacity building at federal, state and local levels, and outreach and advocacy on SLM practice and policy. This incremental support will help Nigeria upscale improved land and water management, and set the stage for expanding SLM practice beyond the life of the Project, especially as current climate variability will likely affect sector aspirations. B. Rationale for Bank and GEF involvement 11. Bank Assistance Strategy. The Project is in line with the Nigeria Country Partnership Strategy (Report No. 32412-NG), which is designed to support the implementation of Nigeria's economic growth and poverty alleviation strategy as outlined in Vision 2020 and the NEEDS. The Government requested the Bank's continued financial and technical partnership for the Fadama III project, including the GEF increment. 12. The GEF Project fills a strategic gap in the portfolio. The GEF support will enable the Bank and the FGN to begin to integrate climate smart activities that extend the efficiency of land and water resources in rural communities by promoting SLM, and in the process, deliver local and global environmental benefits from reduced or avoided land degradation. 13. Consistency with GEF programming. The Project will directly contribute to the implementation of the GEF-4 Land Degradation Focal Area Strategy's Strategic Objectives 1 (enabling environment for SLM) and 2 (up scaling SLM among communities), as well as Strategic Program 1 (support to sustainable agriculture and rangeland management). The GEF financing will be drawn from the envelope secured for Sub-Saharan Africa by the World Bank- led multi-agency GEF Strategic Investment Program for SLM in Sub-Saharan Africa (SIP). The 4 SIP is a key activity of the AU-NEPAD TerrAfrica partnership. As such, the Project conforms to the SIP principles7 and delivers on the SIP objectives and intermediate results 2, 3, and 4. C. Higher level objectives to which the project contributes 14. Government objectives: The Project supports the government's strategic objective in its 7 Point Agenda to "enhance non-oil growth for increasing food security, reducing poverty, and creating employment and livelihoods opportunities in rural areas, while improving environmental sustainability." The Project will do so by contributing to an expansion in the area of productive land under more sustainable management, and the number of people who could potentially benefit from this expansion if they adopt SLM practices. Under the baseline Fadama III operation, there are over 2.2 million households nationwide, already organized into approximately 7400 Community Associations. The Project will also contribute to achieving the goals of Vision 2020, the New Agricultural Policy (NAP) and the Rural Sector Strategy (RSS), Nigeria's UNCCD National Action Programme, as well as regional initiatives in which Nigeria participates including: the objectives of the AU-NEPAD Comprehensive African Agriculture Development Program (CAADP), and the TerrAfrica Partnership. Lastly, the Project was prepared with strong linkages to the FGN's on-going preparation of its multi-sector land management investment framework in line with the efforts under CAADP pillar 1 and TerrAfrica to improve medium-term investment programming. 15. The GEF goal to secure global environmental benefits: The GEF support will contribute to safeguarding the ecosystem services provided by intact production systems such as floodplain cropping, grazing reserves or other community defined areas, generating intertwined global and local environmental benefits in up to the existing 7400 participating Community Associations throughout all of Nigeria's agro-ecological zones (depending on uptake of SLM practices). These benefits accrue from the uptake of selected SLM practices (see Annex 1 or Annex 4 para 17) that aim to maintain or expand vegetation cover, and improve soil quality and water retention. Adoption of SLM in turn is dependent on improvements in the enabling environment, which this GEF incremental grant helps directly finance. The benefits to be delivered by the project vary, depending on type and rate of technology demanded by and adopted by rural communities, the local land degradation and climate risks, and the agro- ecological zone. The project will contribute to delivering global environmental benefits that center on key primary ecosystem services from well-functioning production landscapes. These include soil formation, carbon accumulation in soil and biomass, above and below ground biodiversity from improved crop and range management as well as avoided deforestation, improved ability of communities to adapt to climate variability and change, and lastly, improved infiltration and freshwater availability in transboundary basins. Local environmental benefits to be delivered by the operation center on secondary ecosystem services that result from the primary ecosystem services and include food, fuel, fiber, fodder, and freshwater. 7 The SIP principles are: (i) Country has demonstrated commitment to the SLM related objectives of NEPAD's environment and agriculture programs (CAADP, EAP) and the ECOWAS Implementation Action Plan; (ii) The operation contributes to reaching SIP results; (iii) The operation commits to using harmonized indicators and benchmarks to measure SLM scale up and progress toward established goals at regional program level; (iv) The operation exceeds the 1:4 financial leveraging ratio for SIP operations (GEF: non-GEF). The SIP is a key activity in the TerrAfrica joint work program, in which the Bank, Nigeria, GEF and NEPAD actively participate. 5 II. PROJECT DESCRIPTION A. Financing instrument 16. Scaling Up SLM Practice, Knowledge and Coordination will be a three-and-a-half-year incremental GEF grant to the Federal Republic of Nigeria focused on mainstreaming SLM in Nigeria's agricultural sector. The GEF grant will be fully integrated into and coordinated with the Fadama III operation.8 The two projects share the same structure, institutional set-up, and implementation mechanisms. Fadama III is a Specific Investment Loan (SIL) designed to assist the FGN in increasing rural income and reducing poverty in rural areas nationwide focused on community-driven smallholder agricultural development and alternative livelihoods. Being fully integrated, the GEF incremental grant will close at the same time. Fadama III has national scope and operates in all 36 Nigerian States and the Federal Capital Territory (FCT). It builds on previous community development initiatives that covered a limited number of States. 17. The GEF financed activities implemented at the state level will not cover all 36 States of Nigeria. Instead, GEF support will focus only on those 30 States plus the FCT that do not yet have institutional structures for cross-sectoral coordination and rural land use planning in place. In the six States not covered by this grant (Imo, Kebbi, Kwara, Kogi, Ogun, and Bauchi), state- level watershed committees have already been established. These state committees will operate as sub-committees to the National SLM Committee, which is chaired by the Federal Ministry of Agriculture and Rural Development (FMARD). Consequently, these six States are excluded from additional GEF investments in an effort to avoid duplication of existing state-level external funding support for capacity building on SLM. B. Project development and global environment objective and key indicators 18. The development and global environment objective of the GEF incremental grant is to improve the enabling environment for scaling up sustainable land management in participating communities.9 SLM practices allow communities participating in the Project to reduce the threat of land degradation and climate risks facing their production lands. The key performance indicator for the GEF incremental grant is "Stakeholder perception of the enabling environment for sustainable land management." This indicator is reported as an increase in score on the tracking survey: Composite Index for the Enabling Environment for Sustainable Land Management (CI). 19. The CI was developed under the regional GEF-SIP SLM umbrella and applied in Nigeria during Project preparation to generate an initial baseline. The Composite Index is based on similar indices for other themes. When the Project becomes effective, this baseline will be updated by the NFCO and carried out annually to update the scores on the composite index. For more on this tool, see paragraphs 42 and 43 and the detailed project description in Annex 4. 20. Note that metrics to track global and local environmental impact and adoption rates of SLM practices will be implemented as part of project sub-activities (see project component B), and not as a project indicator. These metrics will help demonstrate the contribution (but not attribution) of the GEF support to delivering local and global environmental benefits while 8 Fadama III became effective in March 2009 and has a closing date of December 2013. 9 The project development objective of the existing approved credit (with which the GEF incremental support will integrate) is to increase the incomes of users of rural land and water resources. 6 contributing to local economic benefits of communities. Additionally, the indicator "land area with SLM practices" will be tracked by this project to report on the outcomes of Country Partnership Strategy II and the to the regional GEF-SIP umbrella. It will also help the Fadama III baseline project to measure adoption rates of SLM practices under the Fadama III operation. This indicator work appears below as an activity under Component B. An on-going survey will establish the baseline values. Beneficiaries 21. An estimated 2.2 million rural poor households, organized into 7400 community organizations, will potentially benefit from improved management of land and water resources in Fadama III. Of these, 259,000 individuals are considered direct beneficiaries of this incremental GEF Project. There are two groups of beneficiaries. Primary beneficiaries of the GEF incremental grant are rural community groups10 exposed to the socio-economic and environmental impacts of land degradation. Secondary beneficiaries include public and private organizations at Federal, State, and local government levels that enable upscaling of climate- smart land management. The results monitoring arrangements in Annex 3 quantify the relevant targets. C. Project approach of the GEF grant 22. The GEF grant will contribute to the above objectives by improving the enabling environment necessary for greater adoption of SLM practices. This approach includes building capacity and awareness for SLM practice and policy at national, state, and local levels in order to stimulate demand for and leverage on-the-ground investments in the baseline loan that will improve or protect land productivity. In particular, the GEF incremental grant funds the development of a knowledge support network, strengthens the institutional environment for investment programming, improves monitoring of land productivity, raises capacity of local governments to carry out land use planning, and promotes inclusion of SLM practices and alternative livelihoods strategies into communities' Local Development Plans (LDPs). An innovative feature supporting awareness raising and mutual learning is the proposed Community SLM Award, which is a grant award for those participating and eligible communities that successfully implement the SLM activities identified their LDPs. Select SLM practices promoted by the project are customized to Nigeria's main agro-ecologies, and help rural land users address land degradation while also adapting to the adverse impact of climate change and climate variability (see Annex 4 para 17 for table of eligible SLM practices). These practices also enable farmers to accumulate carbon in soil and biomass. This is important, as long-term soil and biomass carbon trends are considered a proxy for overall ecosystem function. D. Project components 23. The GEF support is fully integrated into and coordinated with the IDA-financed Fadama III operation, and reinforces its existing components 1 and 6 (see para 10 above). Each component of the GEF grant is incremental to the respective "baseline" Fadama III project component. The text below and in Annex 4 describe the GEF incremental support only. For more details on the baseline Fadama III Project, see Annex 17. 10 Communities are organized in economic interest groups (EIGs), which together form registered Community Associations, i.e. an apex organization that represent the collective interests of the EIGs. 7 GEF Component A: Capacity Building, Communications and Information Support (US$6.00m GEF, integrated with Component 1 of the Fadama III project) 24. Background: Component 1 of the existing Fadama III project aims at building the underlying capacity at federal, state, and local government levels to support innovations in local development planning and provide the support structures for delivery of community demand- driven investments in rural development. Communities are mobilized to form viable Economic Interest Groups (EIGs) that are organized into a network of registered Community Associations nationwide. Communications and training programs empower communities to prepare Local Development Plans (LDPs). Capacities of Local Governments and other stakeholders such as advisory service providers will be strengthened to better respond to the needs of their communities and to improve decision-making, local development planning, and governance. 25. Incremental GEF funding will support the following activities: (a) Capacity building support for community organizations for local development planning (US$1.29m GEF) 26. The objective of GEF incremental funding to this sub-component is to strengthen local development processes by raising capacity of stakeholders to include land degradation and climate risks in rural development planning, particularly as affecting smallholder agricultural production. Capacity building activities will target a wide spectrum of stakeholders, including policy makers at national level, technical staff at State level, development planners and project facilitators at local government level, extension services (the ADPs), and land users organized in EIGs and Community Associations. 27. Incremental GEF financing will be provided to develop a detailed SLM training program and production of training material, customized for the specific awareness and capacity building needs of the different stakeholder groups described above. GEF will also finance the competitive recruitment of six SLM trainers at zonal level for the delivery of the SLM training sessions, including production and dissemination of training material. These trainers will complement the training and capacity building personnel to be financed under the baseline Fadama III project. The cost of organizing and facilitating training for the wide audience of stakeholders to be trained will be covered by financing from the baseline Fadama III project. GEF resources will thus cost-effectively dovetail with the planned capacity building program. 28. The provision of the six SLM trainers at zonal level follows a "train-the-trainers" model to deliver the various capacity building activities within the planned training program of Fadama III. These trainers will work with a broad audience including: SFCO Environment Officers and Local Government Desk Officers seconded to the project, ADP staff, as well as the community facilitators employed under Fadama III. Transferring knowledge on promising SLM technologies to local community groups will empower them to better secure livelihoods, manage lands more sustainably, and adapt better to the risks of climate change and variability. As part of their duties, the six zonal SLM trainers will also serve as thematic advisors to stakeholders at State and local government levels, to help them respond to the needs of their constituencies on information and knowledge related to SLM. As such, the six Zonal SLM trainers will help build a community of practice on climate-smart land and water management that can help stakeholders replicate good activities post-project. 8 (b) Capacity building of Local Governments for rural land use planning (US$1.51m GEF) 29. The objective of incremental GEF funding to this sub-component is to build capacity of Local Government Areas (LGAs) to carry out rural land use planning that balances the need for maximization of productivity and long-term sustainability of land, water and forest resources. Few, if any, LGAs are currently engaged in rural land use planning or natural asset mapping. 30. Incremental GEF funding will support 62 LGAs to carry out participatory spatial planning, and for a small package of Geographic Information System equipment. Existing local knowledge on land capability and ecosystem resilience to climate variability will inform the development of rural land use plans. Due to the limited GEF funding envelope, 62 LGAs (2 per State for all eligible 30 States plus FCT) among the existing participating LGAs will be selected based on agreed criteria (i.e. readiness, level of land degradation threats, etc.). (c) Communications and advocacy (US$0.81m GEF) 31. The objective of incremental GEF funding to this sub-component is to raise awareness of stakeholders at all levels of SLM as a pragmatic way increase land quality and productivity, control land degradation, and reduce climate change risks. These stakeholders include extension and advisory service providers, community facilitators and groups, Local Governments, State and National stakeholders, etc. The communication activities, in tandem with capacity building activities described above, will play an important role in mobilizing land users to invest in SLM practices under the existing demand-driven matching grant facility of the baseline Fadama III project, as well as independent of project financing. 32. Incremental GEF funding will support mainstreaming of SLM practice in the overall sensitization campaign to be delivered under the baseline project. The GEF will finance the development of an SLM communication strategy and advocacy modules for implementing it, and will integrate these into the communication and training programs of Fadama III. The communication modules will target land users, local authorities, national and state actors, and the general public via media such as radio and TV, newspapers and other print media, etc. The GEF Project will also finance development, production, and dissemination of the SLM related communication and information material, some of which will need to be adapted to the specific characteristics of the different agro-ecological zones of Nigeria as well as the specific needs of the different States. (d) National and State coordination on land and water management (US$0.48m GEF) 33. The objective of this fully GEF funded subcomponent is to increase the effectiveness, capability, transparency, accountability, and responsiveness of government and other stakeholders to convene evidence and knowledge and improve investment programming on climate-smart land and water management, and help mainstream SLM practice and policy into State and National development planning. To guide this process, the Federal Government established the multi-sector National SLM Committee (see para 8 above), chaired by FMARD. This sub-component includes a suite of activities that build on the government's on-going actions to develop a "public sphere," including the public sector, media, civil society, academia, and producer and community associations. This approach can transform the way that projects and programs are selected, designed and deliberated. It advocates for greater participation, transparency and accountability across actors. This approach is seen as a vehicle for replicating and scaling up SLM practices proven within the Fadama III project and elsewhere. 9 34. The GEF will finance activities to strengthen and equip the National SLM Committee to build a nationwide coalition on climate-smart land and water management. This support includes the continued preparation of its SLM Investment Framework11, associated workshops at policy and technical levels and technical advisory services, establishment of secretariat functions, website, communications, establishment of State SLM Committees, and technical assistance and training on diagnostics and monitoring. (e) Community SLM Award (US$1.91m GEF) 35. The objective of this incremental GEF support is to strengthen incentives to already participating communities in Fadama III to select and then fully implement community level SLM activities. SLM activities are on the positive list of the Fadama III project and may be included by community groups as part of their Local Development Plans (LDPs). However, unless land degradation and climate risks are current and visible threats, SLM activities are not always the most attractive options to communities because the SLM activities do not always bring immediate income and can be perceived to generate mostly long-term public goods. A second objective of the GEF support is to encourage knowledge fertilization among Fadama stakeholders, which will help consolidate practitioners at the local level in indentifying which interventions are working that could be scaled up. 36. The GEF will therefore finance the Community SLM Award. This is a grant facility to reward participating Fadama III communities that successfully implement SLM sub-projects that have been financed under component 2 of the Fadama III operation. These sub-projects deliver public goods and include grazing reserves, soil and water conservation, etc. (See Annex 4 para 17 for the defined list of eligible SLM practices), and typically require strong participation by community members. Each award comes in the form of an additional complementary SLM sub- project that a community then becomes eligible to implement, up to a value of $10,000 (with no counterpart funding required). A total of 185 communities will receive the award, five from each State and the FCT. The efforts of communities successfully implementing SLM sub-projects will be visibly recognized through this additional award by linking to the communications and outreach efforts. GEF Component B: Monitoring, Evaluation, and Knowledge (US$0.80m financed by GEF, integrated with Component 6 of the Fadama III project) 37. Background: Component 6 of the existing Fadama III project will finance the cost of project management and coordination, monitoring and impact evaluation, as well as the cost of screening and ensuring environmental and social safeguards compliance. 38. Incremental GEF funding will support the following activities (none include project administration, which is fully covered by the baseline project): 11 The SLM Investment Framework is a suite of prioritized on-going, pipeline, and future investments, and is accompanied by other institutional support provided by this sub-component such as a knowledge and information system, M&E tools, and associated institutional development at State and Federal levels (see component B which funds some of these). The SLM Investment Framework allows the country to articulate a more focused investment agenda on cross-cutting land issues including agricultural productivity, climate change, watershed management, and forest. This will form part of the country's CAADP investment program, and is in line with the President's 7 Point Agenda, NEEDS, SEEDS, sector strategies, and the TerrAfrica partnership under which support has already been provided. 10 39. The objective of this incremental GEF funding is to enhance the SLM dimensions of the M&E activities and Management Information System (MIS) financed under the baseline project. Incremental funding will cover development and application of monitoring tools, an SLM information system, and capacity building for implementing them. This work will allow stakeholders to better monitor the land resource, changes in the enabling environment, and to transfer knowledge. This in turn will strengthen and help sustain post-project impact, thereby contributing to greater adoption of climate-smart land and water management. (a) Monitoring tools 40. The GEF will finance the development and/or application of the following monitoring tools: 41. One monitoring tool is the Composite Index (CI) for the Enabling Environment for SLM. This is the indicator used to track progress toward this project's global environment objective, and was developed and applied during project preparation. This tool is a simple and low-cost perception based survey among experts of the extent to which the enabling conditions for SLM (institutions, financing, knowledge, etc) are improving or deteriorating. Because Fadama III has nationwide reach and is itself mainstreamed into Federal, State, and Local governments, this tool is applicable as an indicator for this project, as well as more generally to track Nigeria's capacities to implement SLM over time. For more on this tool, see the detailed project description in Annex 4. 42. The CI is reported as an aggregate score made up of six components, which can be reported on separately as needed: i) political support, ii) policy formulation such as land tenure, decentralization, and multi-sectoral planning, iii) organizational structure, iv) financial resources such as public expenditure trends, v) knowledge, monitoring and evaluation, and vi) legal and regulatory environment. The scores break down into the following categories: Less than 0.10: The enabling environment in aggregate undermines scaling up of SLM. 0.10 - 0.49: The enabling environment in aggregate does not adequately support scaling up of SLM. 0.50 ­ 0.69: The enabling environment in aggregate fairly supports scaling up of SLM. 0.70 ­ 1.00: The enabling environment in aggregate strongly supports scaling up of SLM. The baseline and targets for the CI are as follows: Baseline value Target values May 2010 Dec. 2010 Dec. 2011 Dec. 2012 Dec.2013 Score: 0.323 Score: 0.323 Score: 0.400 Score: 0.500 Score: 0.600 43. A second monitoring tool helps project officers and the government at large track adoption rates and spatial coverage of specific SLM practices. This indicator, "land area with SLM practices," will be tracked by this project to report on the outcomes of Country Partnership Strategy II, baseline Fadama III operation, as well as the regional TerrAfrica SIP SLM umbrella that provides this GEF financing. Adoption rates and hectares affected can be estimated from the on-going comprehensive baseline household survey being carried out for the Fadama III project, which will be repeated at mid-term and at project close. GEF incremental support will be provided to compile the baseline data (and follow-on surveys at mid-term and project close) to quantify adoption rates of SLM practices in the project area nationwide and estimate land area benefitting from the eligible SLM practices (see table in Annex 4 para 17). This indicator will be 11 reported as a national aggregate of local and state level figures, broken down by: agro-ecological zone, type of SLM practice, community level and household level. The GEF support is focusing on improving the enabling environment and, as such, aims to influence adoption rates. 44. A third monitoring tool will be developed to estimate the global and local environmental benefits from the SLM practices tracked above. The patterns in the adoption rates tracked using the tool described above will be used to quantify estimated global and local environmental benefits accruing from the improved land management practices. These estimates will be derived from co-efficient factors for environmental benefits (such as carbon and nitrogen balances, and biodiversity) to be developed for each type of land management activity in each major agro- ecology. To the extent possible, these co-efficients will be aggregated to report delivery of global environmental benefits for the GEF and other interested parties. This tool will therefore allow Project environmental and M&E officers to coarsely but cost-effectively estimate and predict local and global environmental impacts deriving from specific SLM activities. 45. A fourth monitoring tool to be refined and applied will track changes in land productivity, land degradation, and overall ecosystem function nationwide. This tool will use freely available satellite data to track net primary productivity to estimate overall land degradation trends in rain-fed environments.12 The project will allow the government to apply this indicator tool to the Nigerian context and develop capacity to use it across land use related sectors. It will also help validate the estimates described above in the activity-based approach to estimating environmental impacts. (b)SLM information system and knowledge base 46. This GEF incremental support will co-finance the development of a comprehensive national technical knowledge base and dynamic information system on climate-smart soil and water conservation specific to Nigeria's agro-ecological zones. GEF will also finance capacity support to ensure that the knowledge base is integrated into government decision making and extension services across sectors. These functions will be linked to the existing project's Management Information System, as well as databases, websites, and knowledge repositories of key agencies (Agricultural Development Programs, etc). 47. The aim is to overcome the highly fragmented nature of knowledge available in the country and serve as a "one-stop shop" for knowledge and information on rural land and water management practices including best-fit technologies, planning approaches, and so on. It would aim to serve policy makers, technical staff including extension services and private advisory service providers, as well as community practitioners. The knowledge base will further facilitate improved investment programming as well as learning. As part of the knowledge base, a simple geospatial tool for a general audience will be developed and applied. This will provide timely information on climate and land risk factors (erosion, temperature, rainfall, etc), land use, land use change, and other parameters. As the FMARD continues to digitize its soil erosion maps, and climate assessments get underway, this work becomes increasingly important and useful. E. Lessons learned and reflected in the project design 12 Net primary productivity, reported in amount of carbon, is based on the commonly known NDVI, which tracks changes in vegetation cover. Net primary productivity is more applicable for monitoring land degradation and basic land productivity trends because carbon is considered a proxy for overall ecosystem performance. 12 48. GEF stand-alone investments in SLM and other focal areas have had limited success. This calls for mainstreaming SLM objectives into broader rural development investment programs that address and support the core functions of national and local development planning. 49. Community demand-driven approaches have proven to be a robust and successful delivery mechanism in Nigeria to reduce rural poverty, increase food security and rural economic diversification. Throughout Africa, community led strategies have proven critical for SLM to take root and spread, in particular in rain-fed farming systems, and this is the opportunity for Nigeria. 50. Scope of response. Prior and ongoing responses to land degradation in Nigeria have not matched the scale of the problem. This is even truer when climate vulnerabilities and risks to productive land assets are taken into account. 51. Knowledge gap. While there is high awareness throughout the country on the detrimental impact and threats posed by land degradation to agricultural productivity and rural livelihoods, and emerging evidence of accurate community perception of climate impacts on land productivity, there is very low awareness and knowledge on successful SLM approaches and technologies that respond to land degradation and climate change risks, while providing livelihood benefits. There are some good examples, however, that can be scaled up. Monitoring tools (on process and on impact) need to be provided and applied to quantify the successes. 52. SLM has a weak position in an under capacitated advisory services system. IFPRI's impact study of CDD programs in Nigeria13 finds that while CDD programs have significantly increased incomes of beneficiaries and successfully targeted the poor and vulnerable with productive asset acquisition, they have also reduced the demand for soil fertility management technologies, and instead increased demand for post-harvest handling technologies. This likely reflects the earlier projects' focus on promoting post-production advisory services. This calls for strengthening capacities in SLM technologies and approaches among public and private advisory service providers to reduce risks to production from natural resource degradation and climate variability and change. 53. Cross-sectoral coordination. Efforts to address land degradation and climate risk could have greater impact by improving operational coordination across sectors on policy and investment design and implementation, better linking research and extension with one another and with investment and policy communities, strengthening local awareness and ownership, and involving communities in technology selection and monitoring. Such coordination, vertically and horizontally, includes some transaction costs, which can be onerous for a developing country with limited budget. However, the benefits can outweigh these costs, and operational coordination is critical for working in cross-cutting themes such as land and climate. 54. Lessons from Fadama II. Although Fadama III design and implementation builds on the good experiences of Fadama II, there are additional lessons learned from the GEF support to Fadama II which focused on integrated ecosystem management. In particular, the new additional GEF support now (i) more explicitly focuses on reducing climate risk; (ii) takes into consideration the financial sustainability of the recommended SLM sub-projects (see Annex 1 on costs and benefits, and table of eligible SLM practices in Annex 4 para 17); (iii) enhances the role of six state-level watershed committees to be upgraded to become involved in state-level 13 World Bank, 2008, From the Ground up: Impacts of a Pro-Poor Community-Driven Development Project in Nigeria, Agriculture and Rural Development Discussion Paper 40. 13 investment planning and policy; (iv) fully integrated GEF-financed SLM activities in the mainstream Fadama III implementation structure (i.e., no parallel implementation). F. Alternatives considered and reasons for rejection 55. The proposed project design aims for maximum mainstreaming and leverage opportunities for a comparatively small GEF grant ($6.8 million) compared to the $450 million baseline budget of IDA plus counterpart financing for Fadama III. To achieve this goal, the following alternative design options were considered and rejected: 56. Nationwide coverage versus focus on three pilot States: At the project concept stage, the GEF grant was designed to target only three selected States within Nigeria. The GEF grant would have served as a parallel or add-on financing to the CDD delivery mechanisms established under the baseline project and would have served to cover the cost of community level investments into SLM interventions. Given the limited scope of GEF funding, on-the-ground investments and environmental impact would have been limited to a small number of sub-project sites within the three selected States. This initial design would have allowed limited opportunities for up-scaling SLM practices and few if any impact in other States. This option was rejected in consideration of the enormous opportunity for mainstreaming environmental objectives into a flagship baseline rural development program, Fadama III, that is expected to reach 2.2 million beneficiary households across Nigeria, and that is already deeply part of existing federal and state government implementation structures and priorities. The potential for a lasting impact on the enabling environment to drive and monitor SLM scale up is great. 57. Focus on mainstreaming versus parallel pilot investments: Instead of creating parallel pilot investments, the proposed GEF project design takes advantage of the opportunity to mainstream environmental objectives by relying on the nationwide implementation structure of Fadama III. This structure is proven to be robust, and has been adapted and fine-tuned to the Nigerian context over the last 10 years. Relying on the already existing matching grant facility for community driven development sub-projects provides an opportunity for substantive investments in SLM practices across all of Nigeria. A high leveraging potential can be achieved if beneficiary communities are assisted in identifying SLM technologies with immediate or short-term economic returns and longer-term environmental benefits. As such, the proposed project hinges upon the assumption that the access to advisory services that can credibly promote profitable SLM technologies and knowledge sharing will incentivize community groups to prioritize SLM activities in local development planning. Innovative features of the project, such as an implementation award grant for communities implementing SLM practices under Fadama III, will strengthen outreach and awareness-raising. 58. Focus on barrier removal, rather than on pilot demonstration investments: Previous efforts to scale up SLM by investing in pilots in critical ecosystems were designed to demonstrate the multiple benefits of SLM and serve as a catalyst for replication. However, experience has shown that demonstration investments have fallen short of meeting expectations due to failure to address an entrenched set of barriers. Key barriers to SLM include: fragmented institutional coordination, capacities, and mandates, policy as well as knowledge gaps. These barriers result in persistent institutional underperformance and hinder greater adoption of SLM. Accordingly, the proposed design of the GEF project places a strategic focus on reducing these barriers by enhancing capacities and knowledge to promote greater adoption of SLM practices. 14 59. Support an implementation award grant rather than limited top-up financing for Fadama III's existing matching grant facilities: It was considered to provide ring-fenced GEF financing for SLM sub-projects through the existing matching grant facilities of Fadama III Project components 2 and 5. Ring-fencing is a term for earmarked financing. Ring-fenced financing can be desirable because SLM practices sometimes become economically viable only in the long-term and/or can generate predominantly off-farm benefits. This particular ring- fencing option was rejected for several reasons: (i) The limited scope of the GEF resource envelope would have resulted in a comparatively small ring-fenced grant facility with little added impact; (ii) Further, the prospect for sustainability and potential for self-financed uptake and replication by other farmers across Nigeria would have been low for SLM activities without competitive short-term profitability. As a result, the strategic focus of the GEF support for improved practice in the field centers on providing a reward for communities that implement SLM activities successfully under the Fadama III project, combined with associated knowledge and institutional development. This will help build awareness while incentivizing greater adoption of SLM and helping mainstream SLM into community local development plans and local government planning. III. IMPLEMENTATION A. Institutional and implementation arrangements 60. Implementation of the GEF incremental grant is fully integrated into the existing design and implementation arrangements of Fadama III; no additional institutional structures or lines of accountability will be created. The GEF grant provides an additional financing source for a number of incremental activities mainly pertaining to institutional capacity development, communication and awareness raising, knowledge fertilization, M&E tools, and technology promotion -- all of which together aim to improve the enabling environment for scaling up SLM. As such, Components A and B of the incremental GEF grant reinforce existing components 1 and 6 of the baseline Fadama III project, respectively. 61. Implementation responsibilities for GEF-financed activities are summarized below by sub-component: 62. Implementation of Component A. Sub-component A1, Capacity Building for Community Organizations, is implemented at the federal/zonal level under the lead of NFCO using the train-the-trainers approach. SLM Trainers are deployed to the Project's existing 6 coordination zones (with approximately 6 States per zone), but administratively report to the NFCO. Implementation responsibilities for sub-component A2, Capacity Building for Local Governments for Rural Land Use Planning, are at local government level and guided by Local Fadama Desks (LFDs). 62 Local Governments have been selected for support with rural land use planning support under the GEF grant. For Sub-components A3, Communication and Outreach, and A4, National and State Coordination on Land and Water Management, depending on the specific activity, implementation responsibilities are split between the federal level under the lead of NFCO and the state level under the lead of the SFCO. Activities financed through the small grant mechanism under sub-component A5, Community SLM Award, will be implemented at community level by FCAs with support from LFD. Exactly as with the arrangements for the flow of funds under the baseline Fadama III operation, Sub-project Agreements for the Community SLM Awards will be entered into directly between the relevant SFCO and the Fadama Community Associations. The NFCO and SFCOs will retain a small operating budget to administer the Award process. Award ceremonies at zonal level will be carried out by NFCO in 15 coordination with SFCOs. The SFCOs will monitor implementation of awarded sub-project grants as per usual procedures under the baseline Fadama III project. 63. Implementation of Component B. Both sub-Components B1, Monitoring Tools, and B2, SLM Information System and Knowledge Base, are fully implemented at the federal level under the lead of NFCO. 64. As described above, implementation arrangements for the GEF financed activities simply build on the implementation arrangements in place for the baseline Fadama III project. These are summarized in the paragraphs below (see Annex 6 for further details on implementation). 65. The Project utilizes the existing institutional structure of the Federal Ministry of Agriculture and Rural Development (FMARD),14 its federal and state level coordination offices as well as state ministries of agriculture, without creating an add-on project implementation unit. 66. Executing Agency. The FMARD will have overall responsibility for execution of the Project through the National Program for Agriculture and Food Security (NPAFS).15 NPAFS has delegated responsibility for day-to-day implementation coordination at the national level to the National Fadama Coordination Office (NFCO). 67. At the Federal level, the FMARD is the Ministry responsible for agriculture and has primary implementation responsibility for this Project. The ministry's NPAFS, through the NFCO, coordinates project activities on behalf of the ministry. At the highest level in the Ministry, the National Fadama Technical Committee (NFTC), is a sub-committee of the Federal Agricultural Development Program Executive Committee (FADPEC), is responsible for Project oversight, overall policy guidance, coordination with other projects, strategic direction, and review and approval of the annual work program and budget of the NFCO. 68. At the State level, the State ministries responsible for agriculture have delegated day-to- day implementation and coordination of the Project to the State Fadama Coordination Office (SFCO), while the oversight, policy, and strategic orientation functions of the Project are performed by the State Fadama Technical Committee (SFTC), which is a Sub-Committee of the Agricultural Development Project Executive Committee (ADPEC). SFTC is chaired by the Permanent Secretary of the State ministries of agriculture, and will meet every six months, to review and approve work plans and budgets. 69. At the Local Government level, a Local Fadama Desk (LFD) and Local Fadama Development Committee (LFDC) have been established. The LFDC and the LFD (as its Secretariat) are responsible for local level review and approval of sub-projects financed under the Fadama III project. The Project provides consultant services to the LFDC in order to provide quality assurance support to local development plans and sub-projects submitted for review and approval by LFDC. A typical LFD comprises one or two civil servants, with qualifications and experience satisfactory to SFCO, seconded to the Project to play the role of a clearing house for LDPs. 14 As of May 2010, the FGN has split the FMAWR into two entities: the FMARD and FMWR. The new FMARD is now considered the implementing federal ministry for this Project as well as the baseline Fadama III Project. 15 Under the new harmonized and consolidated arrangement for multilateral donor assisted projects, the National Program for Agriculture and Food Security (NPAFS) of the FMARD now has responsibility to coordinate Fadama III and all other sector operations including the GEF incremental grant to Fadama III. NPAFS supplants the NFRA in this responsibility. 16 70. At the Community level, critical decisions take place within the Fadama Community Associations (FCAs) and the various economic interest groups (EIGs), which constitute them. These community associations are apex organizations of EIGs. They identify, prepare, execute, supervise, operate, and maintain their sub-projects. A team of facilitators and other specialists has been deployed to provide related and necessary technical assistance and training support. 71. Project implementation procedures. The Project has adopted a phased approach to implementation of multi-year LDPs and associated sub-projects. The starting point of the LDP process is the Community Needs Assessment, using the Participatory Rural Appraisal (PRA) approach, which describes the socioeconomic setting of the community and the social-mapping, constructs the livelihood profiles, identifies the relevant technical, physical, environmental, and institutional constraints, leading to the development of a set of proposals designed to overcome these constraints. 72. Financial Management Arrangements. The Financial Management Department (FMD) of the NFCO and Project Financial Management Units (PFMU) are responsible for managing the financial affairs of the project at the federal and state levels, respectively. The implementing entities are compliant with the Bank's financial management requirements; and there are no overdue audit reports and interim financial reports from these entities. The FMD/NFCO and PFMUs are staffed by qualified accountants and internal auditors. The FMD/NFCO are also responsible for ensuring compliance with the financial management covenants of the Financing Agreement and requirements of the government, including forwarding the quarterly unaudited interim financial reports and audited annual financial statements to IDA. The Federal Government is in the process of establishing the Federal Project Financial Management Division (FPFMD), which would call for some adjustments in these arrangements in future. 73. For the GEF incremental grant, disbursement procedures described in the World Bank Disbursement Handbook will be followed. With view to flow of funds and banking arrangements, IDA will disburse the Grant proceeds through a US Dollar denominated Designated Account. The project will however maintain a Naira draw down account in local commercial bank where the project is being implemented. The FMD/NFCO and PFMU will maintain adequate FM arrangements to support the deployment of Project resources in an economic, efficient and effective manner to achieve the stated development objectives. The arrangements will also provide relevant information to NFTC and SFTC to facilitate the performance of their oversight functions. Subsequent to the establishment of the FPFMD, these arrangements will be accordingly adjusted. 74. Project Implementation Manual. Overall implementation of the Project will follow detailed procedures defined in the existing PIM for Fadama III. An addendum to the PIM has been prepared to guide implementation of incremental activities supported by the GEF Grant. 75. Supervision. Supervision for the GEF incremental grant and the Fadama III project will be carried out as one unified exercise, in line with the fully integrated nature of the GEF- financed activities. A strategic and comprehensive Supervision Plan is outlined in Annex 6B of the already approved PAD for Fadama III. 17 B. Monitoring and evaluation 76. The NPAFS, through the NFCO, has overall responsibility for M&E, working in close collaboration with the SFCO M&E units and LGA Project Desks. These decentralized units feed Project-related data from the local governments and the communities directly into the central M&E system at NFCO, which consolidates the monitoring and evaluation reports and include them in the quarterly, bi-annual, and annual progress reports. These reports are submitted to NFTC and Bank for review and further action. A results-based monitoring and learning system is being developed for the Fadama III project to improve real time monitoring of the entire Project cycle. The GEF incremental project will rely on this, while strengthening the monitoring of environmental trends by project officers. The current M&E system of the baseline Fadama III project consists of self-monitoring at the community level, input-output monitoring through an MIS, a process monitoring system, a dedicated knowledge management system (to be strengthened on SLM with GEF support), and impact evaluation. GEF support also adds, among other things, a spatial analysis function through GIS at the national level. 77. Impact evaluation will be carried out in three stages by an independent agency. The cost is borne by the IDA support but the substance is relevant to evaluate the effectiveness of GEF incremental support as well. This impact evaluation will assist in determining progress toward local and global environmental public goods. A baseline survey is underway to assess pre-project conditions in the Project areas. The second stage will coincide with the mid-term review (MTR) of the Project. The third stage, coinciding with the end of the Project, will evaluate the impact and outcome indicators. The baseline survey includes a detailed household survey, which will measure livelihood impact at the household and community levels, degree of use of SLM practices and climate risk reducing measures, and decision factors within communities for long- term investments in land. C. Sustainability and replicability 78. The sustainability of Project depends on the sustainability of Fadama III, because the two projects are fully integrated with one another. The sustainability of Fadama III depends on ownership and commitment of recipients, financial and technical soundness of sub- projects, financial sustainability of the income-generating investments, capacity of communities, and the stability of the social, economic, and political environment. The discussion on sustainability and replicability in the approved PAD for Fadama III is summarized below. 79. Financial sustainability of the Fadama III sub-projects. The sustainability of Fadama III, and therefore the incremental GEF support, hinges upon the ability of Fadama III to deliver benefits at the grassroots level. This in turn depends first and foremost on the financial soundness of the sub-projects during the early design stage. Adoption of a selected technology is generally sustainable, if it: (a) is adapted to the needs and capacities of smallholders; (b) requires relatively low investment and maintenance costs; (c) has a direct impact on labor and land productivity as well as on rural revenues; and (d) has a ready market that shows profitability ex ante under reasonable conditions. 80. Ownership and recipient commitment. The establishment of Local Development Plans is participatory and increases the likelihood that community needs, perspectives, and ownership are internalized. In addition, sustainability will be enhanced through: (i) innovations in local planning at the community level; (ii) integration of community plans in the local government- 18 planning program; and (iii) improvements in good governance and organizational capacity of local governments (both elected officials and line department staff) at the district level. GEF incremental support for land use planning in 62 targeted Local Governments (2 each in 30 States plus FCT) will enhance sustainability. 81. Capacity of communities and beneficiary associations. The GEF support will make significant investments in capacity building through training and technical assistance on SLM. In addition, the investments in capacities of extension and service providers, local governments, and community facilitators will contribute enhance the supply side of advisory services. 82. Enabling institutional environment. The emphasis on knowledge, communication, and capacity development by the GEF Project, combined with investment dialogue and planning, enhances the visibility of the Project's results and thereby increases government commitment to the Project and its approach. At Federal level, this commitment is already reflected in government's strategy and macroeconomic and sectoral policies, such as the 7 Point Agenda, Rural Sector Strategy, Vision 2020, and National Economic Empowerment and Development Strategy (NEEDS). In addition, project support will be used to strengthen the capacity of government at community, local, state, and federal levels to manage SLM implementation and investment decisions. The state, local, and community entities involved will participate in training on participatory approaches, conflict management, M&E, and environmental and social assessments. 83. The National SLM Committee will provide a platform outside the scope of daily Project management to engage a broader range of stakeholders on land use and management issues, and provide policy and investment alignment across sectors that builds on the experiences of Fadama III. The SLM Committees includes: the FMARD (Committee Chair), the FMF, NPC, the FME, NIMET, and NEPAD Nigeria. Further interaction is taking place with civil society and State Ministries involved in agriculture, rural development, water resources, and environment, relevant Nigerian research institutions, farmer associations, and NGOs. The National SLM Committee is preparing Nigeria's SLM Investment Framework, which will articulate the country's vision for climate-smart land and water management investment. By consolidating all SLM activities in the country as one government-led portfolio, the framework will quantify current and future financing for realizing this vision over the medium to long term. In this way, individual investment projects, including Fadama, can better sustain impacts and message post-project. This approach will provide an effective platform for extending good practice from Fadama III and other experiences to future investment operations and budget planning in Nigeria, helping extend Project replicability and sustainability. 84. Sustained demand and adoption of SLM approaches and technologies. The strategic approach of the GEF project is based on the assumption that engagement and mobilization of communities, complemented by technical support services, is fundamental to creating community awareness on the short- and long-term economic benefits and ecosystem services from improved land and water management. In this way, this approach is meant to help stimulate demand for public and private investments in ensuring that production systems sustain ecosystem functions. Incremental GEF support will mainstream SLM and climate resilience objectives into LDPs and rural land use plans, as well as State and Federal investment planning and policy dialogues and monitoring of the land resource. This will help mainstream SLM principles in the broader development agenda at all levels of government administration. 19 D. Partnership arrangements 85. The World Bank along with NEPAD's TerrAfrica Partnership (which the Bank helped found with NEPAD and now participates in) are providing technical support to the FGN in its on-going effort to strengthen investment programming on land use and management via national coordination and multi-sector, multi-State dialogue on investment priorities. Associated work to build institutional capacity to carry out this agenda is further supported under Project component A. The World Bank, IFPRI and TerrAfrica are also engaged in complementary work to strengthen the analytical underpinnings for scaling up SLM, including a review of public expenditure, costs, and benefits of land management interventions, using the Niger basin cases of Cross River, Sokoto, and Niger States. The GEF contribution to the Project falls under the umbrella of the multi-agency GEF Strategic Investment Program (SIP) for SLM in Sub-Saharan Africa, which was developed by the World Bank and NEPAD with TerrAfrica partners. Twenty- five African countries participate. E. Critical risks and possible controversial aspects 86. Financial sustainability. Sub-projects will derive from Local Development Plans and are thus demand-driven and socially inclusive. Communities will make a commitment to a withholding of at least 10 percent of the replacement value of the common asset of an EIG annually, which will be saved in a capitalization/revolving fund. Design of the sub-projects for income generation will include plans for marketing and assessment of profitability. Sub-projects for community-owned, small-scale infrastructure, and EIG-owned assets will include an operations and maintenance (O&M) plan. Technical assistance and training will be given to the EIGs as well as their apex Community Associations. 87. Community demand for SLM. It is critical that community-driven investments in SLM practices are economically viable and competitive, suitable for the relevant agro-ecological zone, and socially acceptable. A number of SLM practices match these criteria, and the project is putting in place a comprehensive program to build awareness, knowledge, and eventually demand for SLM practices that meet these criteria. The Project will support a multi-layered capacity building program for agents of change at national, state, local government and community level. Communities will further have access to public and private advisory services, specifically trained on short-term profitable, scalable SLM practices. Awareness raising and communication campaigns on the social, economic, and environmental benefits of SLM will accompany capacity building efforts. 88. Additional risks that are most relevant to the GEF incremental grant are summarized in the table below, along with the mitigation measures. For risks already identified for the baseline Fadama III operation, see that PAD. Risk Mitigation Measures: Risks Risk Mitigation Measures Risk Rating with Mitigation To project development and global environment objective 1. Community demand for 1. Provision of advisory services with focus on short-term Moderate investments in SLM practices profitable, scalable SLM technologies and enterprises, as 20 Risks Risk Mitigation Measures Risk Rating with Mitigation remains low. well as capacity development, information, communication on social, economic, ecological and climate benefits of 2. Government commitment to a SLM. more programmatic and participatory approach to scale 2. Ongoing technical support to the national land up integrated land/water management investment platform through the TerrAfrica Low management investment falters Partnership and ongoing WB dialogue with cabinet level due to shifts in policy policy makers, including the SLM Steering Committee. approach and orientation. 3. Adequate FM arrangements, external audit and combined 3. Failure to maintain robust IDA/GEF supervision will be provided all through the life Project Financial Management of the project. These are established already in the baseline Moderate systems and weak procurement project approved by the Bank Board. The existing Fadama and contract administration III FMARD/NPAFS/NFCO has the responsibility to capacity. implement this incremental GEF grant, and its procurement and contract administration procedures that are considered to be generally of good quality, reliable, timely, and transparent with few corrective actions needed by the Bank as agreed with the FGN in the Procurement Action Plan. Overall Moderate F. Grant conditions and covenants 89. Grant effectiveness conditions: The Project shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that at least one Subsidiary Agreement has been executed on behalf of the Recipient and one Participating State, or that at least one Subsidiary Agreement concluded pursuant to the Financing Agreement dated November 24, 2008 between the Recipient and the International Development Association for the Third National Fadama Development Project (Cr. 4494-NG) has been amended by the Recipient and one Participating State for the purpose of on- granting the proceeds of the Grant, under terms and conditions which shall have been approved by the World Bank. 90. Implementation Covenants: Implementation of the GEF incremental grant is fully integrated into the existing design and implementation arrangements of Fadama III; no additional institutional structures or lines of accountability will be created. The Fadama III project is already effective and under implementation. Its implementation covenants are fully complied with, FM and procurement manuals are in place and there are no policy exceptions. Implementation Covenants for the proposed GEF grant are therefore the same as for Fadama III: Standard requirements covering organization and staffing of program units, management arrangements, provisions for procurement, and financial management are sufficient. As with the Fadama III baseline project, the proposed incremental GEF Project will utilize the existing institutional structure of the Federal Ministry of Agriculture and Rural Development, its federal and state level coordination offices as well as state ministries of agriculture without creating any add-on project implementation unit. Project management is currently based on a decentralized, demand-responsive structure that grants community organizations as much decision-making authority as 21 possible, and promotes community ownership of and responsibility for operations and maintenance of infrastructure investments funded under the Fadama III baseline project. Withdrawal Conditions; Withdrawal Period: (b) for payments to be made with respect to category (4) expenditures to any Participating State unless the Recipient has furnished to the World Bank evidence satisfactory to the World Bank that the concerned Participating State has: (i) duly established its FCAs in form and substance satisfactory to the World Bank; and (ii) the Subsidiary Agreement between the Recipient and the concerned Participating State has been duly executed by the parties thereto in form and substance satisfactory to the World Bank IV. APPRAISAL SUMMARY A. Technical 91. The concept of community empowerment embodied in the CDD approach is based on successful experiences in Nigeria as well as successful programs in Niger, India, Pakistan, Kenya and other countries. Building on predecessor programs, the CDD approach has been well accepted at the state and local government levels in Nigeria. 92. A potential technical issue is the limited awareness and experience of community groups to prepare technically sound sub-projects under the baseline Fadama III project. The GEF Project, however, is strategically designed to address this knowledge and capacity gap by promoting exchanges of knowledge on SLM practices. Lessons show that the appropriate mix of training, technical assistance, outreach and community engagement spurs communities to action. 93. The capacity of FMARD is adequate. As with Fadama III, FMARD will have overall responsibility for execution of the Project. For overall project coordination, FMARD will delegate the functions and responsibilities of day-to-day implementation coordination to a strengthened NFCO. State-level ministries of agriculture will have overall responsibility for implementing the project at the state level. It will delegate responsibility for the day-to-day- coordination of implementation of the project to the SFCOs. B. Fiduciary 94. Financial Management. The implementing entities are compliant with the Bank's financial management requirements; and there are no overdue audit reports and interim financial reports from these entities. The Public Expenditure Management and Financial Accountability Review (PEMFAR), of 2006, showed that the Federal Government has made significant efforts to advance the reform of Public Financial Management (PFM) system since 2003. There is, nevertheless, much more to be done and PFM initiatives and reforms are articulated in the Government's NEEDS, which are supported under the CPS, specifically through the three Bank- assisted projects; EMCAP ­ closed December 2007, SGCBP and the ERGP. 95. Major achievements so far have been: (i) the adoption of an oil-based fiscal rule that has greatly improved the quality of macroeconomic management; (ii) launching of significant steps toward increased transparency of the budget process; (iii) more efficient cash management; (iv) procurement reforms; (v) updating the legal framework for PFM; (vi) reallocation of budget resources in support of MDG-related government functions; (vii) strengthening monitoring and 22 evaluation; and (viii) introducing a more strategic longer-term focus in budget management. This has clearly helped to reduce waste of public resources, particularly on the capital budget and the payroll. The impact of these early measures is also evident in significantly improved fiscal and broader macroeconomic outcomes. 96. Financial management services to the Federal and State level units responsible for the implementation of the project will be provided respectively through the FPFMD and the state PFMUs. At the FPFMD, the Project Accountant for Fadama III will provide technical guidance, support and quality control for effective management to the designated finance officer. The State PFMUs will include responsibility for the GEF operation in the TOR for the Fadama III Project Accountant. The FM arrangements for the project are designed to: (i) ensure that funds are used only for the intended purposes; (ii) ensure the production of timely information for project management and government oversight; and (iii) facilitate compliance by the project with IDA fiduciary requirements. As known during the appraisal for Fadama III, the overall FM risk in the project is Substantial. Various measures to mitigate FM risks have been agreed, including implementation of the actions outlined to strengthen the financial management system. It is envisaged that with these measures in place, the overall FM risk will be minimized to a residual moderate level, which is manageable. The project Financial Manual for Fadama III, which details the internal control framework and risk management strategy, will apply in the project to keep the substantial risk attributed to the project under constant check. An addendum to the FPM will be prepared to document issues specific to the project. The FM risks identified will be reduced with the implementation of the mitigation measures recommended in Annex 7. Regular reporting arrangement and supervision plan will also ensure implementation of the project is closely monitored and appropriate remedial actions taken expeditiously. The implementing agencies are compliant with the Bank's financial management requirements; and there are no overdue audit reports and interim financial reports from these entities. Guidelines on Preventing and Combating Fraud and Corruption in Project Financed by IBRD Loans and IDA Credits and Grants, dated October 15, 2006 shall apply to the Project. 97. Procurement. Procurement would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 24, revised October 2006 and May 2010; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 24 2004, revised October 2006 and May 2010. In 2000, a Country Procurement Assessment Review (CPAR) was conducted and it identified procurement capacity in the Public Sector as weak. Since then, substantial progress has been made both at the federal and at the state levels, to improve this weak capacity. Through an IDA Credit, the Economic Reform and Governance Project, which has a substantial component on procurement reforms, and an IDF Grant, the Bank has been assisting the government to address this weak capacity and build appropriate partnership with the private sector. Though most of the required tools (procurement codes and implementing regulations, national procurement manuals, national standard bidding documents) are being finalized, most of the elements therein are being implemented using the provisions of the revised Financial Regulations. Improvement in public procurement practice, especially at the federal government level, has reached advanced stage with the recent enactment of the Procurement Bill and the setting up of the Bureau of Public Procurement. Public expenditure has been more efficient and cost-effective. 98. All the 36 states and FCT have experience in implementing Bank-financed agricultural projects in the past. Twelve states implemented the Fadama II Project (now closed) where intensive efforts were made by the Bank to build their procurement capacity. However, technical assistance to improve on the level of procurement capacity in the remaining 24 states not 23 involved in Fadama II Project will be required. In this regard, each State MOA/ADP has assigned/designated a qualified procurement officer (PO) among the staff of the state Ministry of Agriculture, who will further receive additional procurement training on Bank financed procurement procedures from relevant training institutions, such as Lagos Business School, Ghana Institute for Management and Public Administration, Eastern and Southern African Management Institute, etc. Inter-State staff exchanges among the 12 Fadama II states and the 24 Fadama III states will be encouraged. The States Procurement Officers capacity is being strengthened and supported by a well experienced National Procurement Specialist, who has been recruited by NFCO to oversee and provide quality assurance of the procurement operations of the Project as well as to coordinate the activities of the federal and states' procurement officers. 99. NFCO and SFCOs, as Project executing agencies, have responsibility for coordinating procurement under the Project. The responsibilities at the local level have been delegated in part to the various Community Associations and EIGs for implementation of community-based infrastructure and asset acquisition activities. Guidelines to be used in preparing, screening, and implementing sub-projects are specified in the PIM. A PIM addendum on SLM activities supported by GEF will be made available. In cases where Community Associations and EIGs do not have the required capacity, a facilitator will be contracted to assist the Community Associations to prepare and implement sub-projects, including procurement activities. SFCOs will provide the key officials of Community Associations and EIGs with appropriate training to strengthen their procurement capacities. NFCO and SFCOs' procurement specialists will assist in overseeing/monitoring the procurement activities under the Project, and, especially, those of the Community Associations and EIGs for the first two years of the Project. As part of capacity building under the Project, the NFCO Procurement Specialist, in close consultation with the Bank, will conduct procurement training for the relevant staff of NFCO, SFCOs, Community Associations and EIGs. 100. Part of the Grant will be disbursed to the beneficiary communities based on the project's decentralized approach. This implies that Community Associations and EIGs will be fully responsible for management of their sub-projects. Therefore, SFCOs with the assistance of the NFCO Procurement Specialist will organize appropriate training on CDD contracting and monitoring before funds are released to approve sub-projects. Also each SFCO will ensure that procurement activities are fully integrated into the project communication strategy to enhance accountability. Details of the system to be put in place to mitigate the risks on misuse of funds are described in Annex 8. C. Social 101. This GEF incremental grant is fully integrated with Fadama III and would boost and foster the positive social impacts. During the preparation of the SLM project, the RPF was reviewed, updated and re-disclosed countrywide in Nigeria and at the World Bank InfoShop. The Resettlement Policy Framework (RPF) outlines the policies and procedures to be followed in the event that sub-projects require land acquisition. In addition, the RPF contains details of the principles and objectives governing resettlement action plan preparation, review and approval of RAPs, screening for Involuntary Resettlement, establishment of baseline and socioeconomic data, preparation of resettlement action plans, and the likely categories of project affected persons. In addition, the RPF also contains methods of identifying of project affected persons, including criteria and eligibility for compensation of various categories of Project-Affected Persons (PAPs), methods to determine the cut-off dates, institutional framework and methods of 24 valuing affected assets in lieu of compensation and procedures for delivery of compensation. Compensation arrangements for those being involuntarily resettled, including possibilities for land exchange is outlined in the RPF. In particular, the RPF also contains mechanism for resolving disputes that may arise. 102. Grievance redress mechanism: The grievance redress procedure provides a mechanism to mediate conflict and cut down on lengthy litigation, which often causes delay in infrastructure projects. It will also provide people who might have objections or concerns about their assistance a public forum to raise their objections and, through conflict resolution, ensure issues are adequately addressed. The grievance procedure adopted for the SLM project will be simple, administered as far as possible at the local and State levels to facilitate access, flexible and open to various proofs, taking into cognizance the fact that most people are illiterate, and will entail a speedy, just and fair resolution of their grievances. D. Environment 103. In line, with the partly-blended baseline project, the following six safeguards policies were triggered by this Project: Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Pest Management (OP/BP 4.09), Forestry (OP/GP 4.36), Projects on International Waterways (OP/BP 7.50) and Involuntary Resettlement (OP/BP 4.12). The Project will abide with the covenants of the three policies of Forests, Natural Habitats and International Waterways. With regards to the triggered International Waterways Policy, a formal riparian notification has been made to the Niger Basin Authority and the Lake Chad Basin Commission (LCBC). The Bank received the non-objection (dated March 14, 2008) from the Niger Basin Authority (NBA) on the triggered international water policy. However, during project preparation, the exact locations and potential impacts were not known in sufficient detail. Therefore, in December, 2009, the FGN prepared and disclosed the Environmental and Social Management Framework (ESMF) and Resettlement RPF. The RPF addresses possible involuntary physical and economic displacement of the program's sub-project. The ESMF outlines the process and procedure to be followed when a project has the potential to trigger any of the World Bank safeguard policies. The ESMF contains details of the existing environmental laws and regulatory framework in the country; World Bank safeguard policies, analysis of environmental and social impacts including alternatives; institutional arrangements for implementing the ESMF, capacity building needs; and public consultation carried out during project preparation. In addition, the ESMF contains a detailed checklist for screening all sub- projects for their potential Environmental and Social impacts to determine: (i) Environmental Assessment (EA) category; (ii) applicable World Bank environmental and social safeguards policy triggers; (iii) potential for environmental and social impacts liability; (iv) cultural or other sensitivities; (v) relevant stakeholders; and (vi) the nature and extent of engagement for each stakeholder category. Finally, the ESMF contains an annex on a generic ToR for conducting an Environmental and Social Impact Assessment (ESIA) if and when required. 104. The overall environmental and social impacts of the project would be positive. However, since it is integrated with Fadama III, The Project has been classified as a B Category, meaning that the significant potential adverse environmental and social impacts are minor, site specific, non cumulative and easily remediable and site-specific. The potential environmental impacts may occur on new community infrastructure development, small-scale irrigation, ground water extraction and horticultural and livestock production. In addition, Fadama III has potential for intensive agriculture and could result in increased use of pesticides and herbicides, thereby triggering the Bank's Pest Management Policy. Furthermore, while no large scale land 25 acquisition is envisaged, nevertheless, project activities may lead to loss of land or prevention of access to usual means of livelihood. Thus, the Involuntary Resettlement Policy is also triggered by the SLM project. 105. While most SLM activities are not expected to generate any significant adverse environmental or social impact, some SLM investments may result in mainly site-specific and small-scale consequences, if no appropriate mitigation measures are incorporated in the design of community-driven investments (e.g. water harvesting structures, gully stabilization, etc.). Similar to SLM investments under the matching grant mechanism of the baseline project, SLM investments under the Community SLM Award will be screened for environmental and social impact. A checklist has been developed for the ESMF, which addresses social and environmental screening and management aspects related to the Community SLM Award. Under Fadama III, the following safeguards instruments were prepared: ESIA; Pest Management Plan (PMP); and RPF. As part of the ESIA, an ESMF was developed with a screening checklist to screen sub- project activities in order to identify those sub-projects that will need to undergo a partial or full environmental and social assessment. The three safeguards instruments of ESMF, RPF, and PMP have been prepared by the client reviewed and cleared by the Bank. These three instruments were originally disclosed in-country and at the Infoshop on May 4, 2007. In addition, during the preparation of the SLM project, the ESMF and PMP were reviewed, updated and re-disclosed countrywide in Nigeria and at World Bank InfoShop in December 2009 for the purposes of the GEF incremental grant. E. Safeguard policies 106. In tandem with the baseline Fadama III project, the following six World Bank safeguard policies were triggered by this GEF incremental Project: Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Pest Management (OP/BP 4.09), Involuntary Resettlement (OP/BP 4.12), Forests (OP/GP 4.36), and Projects on International Waterways (OP/BP 7.50). With regards to the triggered International Waterways Policy, as indicated in the Fadama III PAD, by a letter dated June 22, 2007, LCBC acknowledged its receipt of the notification made by the FGN. It further advised the FGN that a final response would be given after LCBC will have completed its consultations with its member countries. However, despite several follow up reminders from the FGN, LCBC has not followed through with its final response. Furthermore, more than one year has passed since LCBC was duly notified of the proposed Project by the FGN. Due to this lack of a formal no-objection response from LCBC, further processing of the Project has been authorized by the RVP as required under OP/BP 7.50. Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [x] [] Natural Habitats (OP/BP 4.04) [x ] [] Pest Management (OP 4.09) [x ] [] Physical Cultural Resources (OP/BP 4.11) [] [x] Involuntary Resettlement (OP/BP 4.12) [x] [] Indigenous Peoples (OP/BP 4.10) [] [x] Forests (OP/BP 4.36) [x ] [] Safety of Dams (OP/BP 4.37) [] [x] Projects in Disputed Areas (OP/BP 7.60)* [] [x] Projects on International Waterways (OP/BP 7.50) [x ] [] * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas. 26 F. Policy exceptions and readiness 107. There are no policy exceptions and the GEF incremental Project is ready for implementation. 108. Fadama III is already effective and disbursing, having met the given non-standard effectiveness conditions and three disbursement conditions as follows: (i) At least one Subsidiary Agreement has already been executed on behalf of the Recipient and one Participating State (Effectiveness condition). (ii) The Subsidiary Agreement has been duly authorized or ratified by the Recipient and one Participating State and is legally binding upon the Recipient and that Participating State in accordance with its terms (Effectiveness condition). (iii)There will be no withdrawal prior to the date of the financing agreement and no retroactive Financing (Disbursement condition). (iv) Disbursement for Grants for any Participating State unless the Recipient has furnished to the Association evidence satisfactory to the Association that the concerned Participating State has duly established its FCA in form and substance satisfactory to the Association (Disbursement condition). (v) An FCA must be legally constituted as civic and non-political association, recognized by both state and local government law (Disbursement condition). 27 Annex 1: Country and Sector or Program Background NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION 1. This annex summarizes the background to the operation Nigeria: Scaling up SLM Practice, Knowledge and Coordination. The annex is organized as follows: A. The importance of land productivity B. Barriers to greater adoption of SLM practices C. Government strategy and higher level objectives to which the project contributes D. Indicative list of SLM practices appropriate for Nigeria's community-driven rural development. Appendix 1: Summary of Nigeria's land degradation situation Appendix 2: Costs and benefits of land management options in Nigeria A. The importance of land productivity 2. With approximately two-thirds of Nigerians engaged in agricultural production, the services provided by Nigeria's renewable natural resource base constitute the rural poor's only safety net, while also serving as the foundation of the country's non-oil economic growth and food security. As such, durable agricultural development depends on land management practices that conserve soil and water, improve soil fertility and the biological potential for productivity, and allow communities to adapt to on-going climate change and variability.16 Not only do such practices help deliver important local benefits, they also help secure global environmental benefits such as carbon accumulation in biomass and soil, improved nitrogen cycling, higher water tables, in-situ biodiversity, and general ecosystem function. 3. Land is the key asset of the rural poor. How productive land is managed therefore has implications for poverty alleviation and economic growth. Unsustainable land-use practices in Nigeria's floodplains, forest margins, and other areas prone to land degradation ­ amplified by on-going climate change and variability ­ pose threats to maintaining the productivity of croplands, rangelands, and woodlands, as well as the functionality of the larger ecosystems of which they are a part. Deforestation, large scale land clearing and floodplain17 encroachment, mainly for agricultural production, have resulted in severe gulley erosion in the south, desert encroachment in the north, loss of valuable top soil, siltation of water bodies and flooding, as well as carbon emissions and a foreclosing of adaptive strategies against more variable weather. These and other manifestations of land degradation are directly impacting the sustainability of key systems and livelihoods. See table 1 for a summary by zone. 16 In a study published by the U.S. National Academy of Sciences, an international team of scientists confirmed the rule of thumb emerging among crop ecologists that for each 1 degree Celsius rise in temperature above the norm during the growing season, farmers can expect a 10% decline in wheat, rice, and corn yield (S Peng et al., Proceedings of the National Academy of Sciences, 6 July 2004, pp. 9,971­75). 17 "Fadama" is a Hausa name for irrigable land -- usually low-lying plains underlay by shallow aquifers found along Nigeria's major river systems. They play an important role in the recharge of the shallow groundwater system through infiltration. Fadama lands have historically supported highly productive natural vegetation consisting of dense acacia scrubland, open grassland and seasonally or permanently flooded open bodies of water supporting dense emergent vegetation including rushes, sedges and reeds. Furthermore, in addition to providing a source of water and forage for pastoral livestock during dry seasons, fadama lands also support large and diverse resident or transient wildlife including herbivores, carnivores and migratory birds, many of which are of global significance. 28 Table 1: Distribution of Land Degradation Problems in Nigeria Ultra Humid Extensive flooding problems and local problems of coastal erosion. Zone Very Humid Moderate to severe sheet erosion throughout the zone, associated particularly with Lixisols and Zone coastal sand Acrisols; local gully erosion is severe, particularly in Anambra and Imo states on the Luvisols of the Enugu escarpment, and Xanthic ferralsols around Owerri and Benin; destruction of rainforest has been extensive. Humid Zone Moderate to severe sheet erosion extends in as far as the Benue River, mainly associated with Lixisols over sandstone and shale; local areas of moderate gully erosion (e.g. Katsina Ala valley; Ankpa and Owukpa gullies); flooding is problematic in the major river valleys. Sub-humid Tracts of severe sheet erosion in Bauchi State on the Lixisols over sandstone; areas of moderate Zone gully erosion (e.g. Bida gully in Niger State); soil capping and compaction is a problem in Kaduna State on ferric Luvisols; woodland degradation is locally serious and extensive areas are overgrazed. Plateau Zone Extensive moderate gully erosion on the Jos Plateau and severe sheet erosion in the surrounding area on Luvisols; the Plateau is nearly treeless; grazing resources are degraded. Montane Zone Local gully erosion is moderate (e.g. on the ferrisols of the Mambila Plateau), severe sheet erosion of cultivated areas. Dry sub-humid Northern part of the zone subject to moderate to severe wind erosion of the Aeolian sand; the Zone whole zone suffers slight sheet erosion; alluvial river valleys and Fadamas are liable to flooding and the latter become acidic under cultivation; local problems of salinity; degradation of woody vegetation and overgrazing are extensive. FAO 1991 4. An estimated 5 percent drag on agricultural GDP from on-farm soil erosion alone is being felt in the country, although land degradation trends resist easy quantification at the national level (Country Environmental Assessment, World Bank 2006). Off-site costs would add to 18 the overall figure. The 1990 Global Assessment of Soil Degradation estimated that 27 percent of Nigeria's land had degraded sufficiently to affect productivity. 5. Land degradation has significantly affected Nigeria's crop and livestock productivity. Soil erosion is the major form of land degradation in Nigeria (Stamp 1938; Mbagwu, et al., 1984). It reduces agricultural productivity and leads to on-farm and off-site sediments and other negative impacts (Junge, et al., 2008). For example, Mbagwu et al (1984) observed that soil erosion causes a yield reduction of about 30% to 90% in some areas of southern Nigeria. Sheet erosion is the major form of soil erosion in the country (Junge, et al., 2008). About 90% of the total land area is claimed to be under some form of soil erosion (Thiombiano and Tourino-Soto, 2007). Soil erosion is severe in the northern states where overgrazing, strong winds and poor vegetation cover lead to both water and wind erosion. The southern states also experience severe soil erosion due to the high rainfall and continuing deforestation. 6. Soil nutrient depletion in particular is a serious problem in Nigeria. This is most pronounced in areas where use of fertilizer and other soil fertility management practices are limited. Use of fertilizer in Nigeria is generally higher than the case in other Sub-Saharan countries. Nigeria accounted for 14.2 percent of the 1.3 million tons used in Sub-Saharan Africa 18 The Global Assessment of Human Induced Soil Degradation (GLASOD) was conducted by the International Soil Reference and Information Centre (ISRIC) at Wageningen University, Netherlands, commissioned by UNEP. Soil scientists were asked to categorize soils degraded over the past 45 years due to human intervention. GLASOD is one of the most widely cited analyses on land degradation available. 29 from 1989 to 2002 (Morris, et al., 2007) and about 34 percent of farmers use fertilizer in the country (NBS, 2006). Yet, soil nutrient depletion remains a major problem in the country since the fertilizer quantities that farmers use do not meet the soil nutrient uptake by crops. It is estimated that about 57 kg of the macronutrients (nitrogen, phosphorus and potassium) are lost each year from one hectare (Henao and Baanante 2006). Over half of farmers in the dry Savannah and a third of farmers in the moist Savannah used fertilizer. The Humid forest, with reliable rainfall and high organic matter reported the lowest share of farmers using fertilizer (11%). Part of the reason for the low use of fertilizer in the humid forest zone is the extensive production of root and tuber crops, which are well-adapted to low soil fertility conditions. 7. Use of organic soil fertility management practices is low even though such practices are relatively cheap and have been shown to significantly increase soil fertility and yield (Junge, et al., 2008). Adoption of agroforestry practices is lowest in the dry Savannah, an area Box 1. Examples of prominent sustainable that needs to be emphasized given the low agricultural land management practices vegetation. The low adoption of agroforestry Soil and water management practices could be due to the difficulty of · Terraces and other physical and biological planting trees in the dry areas, where survival structures to prevent soil erosion of seedlings and germination rates are low. · Contour planting Unfortunately, development of agroforestry · Hedgerows and living barriers · Low tillage technologies and their promotion in the arid and · Mulches and cover crops including biological semi-arid areas has been limited ­ compared to nitrogen fixing legumes the more humid areas (Ryan and Spencer, · Water harvesting practices 2001; Ajayi, et al., 2005). Soil fertility management · Manures and composts · Biomass transfer and green manures · Agroforestry 8. Improving smallholder yield is also · Integrated soil fertility management critical for slowing Nigeria's rapid land Crop establishment · Planting pits conversions. While forest and woodland · Intercropping conversions have driven much of Nigeria's · Alley cropping agricultural growth, the country now has the Controlling weeds and pests world's highest deforestation rate of primary · Intercropping and rotation (diversity) · Integrated pest management forests. From 2000 to 2005 the country lost 56 Source: Tripp, 2006 percent of its primary forests (FAO 2005). Nigeria also has Africa's highest rate of total forest loss -- 2.8 percent compared to a Sub-Saharan average of 0.8 percent. The forest cover is now less than a third of what it was in the 1960s (World Bank 2005). From 1990-1995, cropping expanded at an annual rate of 1.5 percent of the country's total land area, with roughly 70 percent of this expansion at the expense of relatively carbon-rich areas such as woodlands and forest (World Bank 2005). The so-called forest reserves extend over 9.6 million hectares but have to a large degree been so degraded as to remain reserves in name only, extensively deprived of tree cover and, in some areas, well advanced towards desertification. Much of the remaining forest is secondary forest, either re-growth on abandoned farm land or planted tree crops such as cocoa or rubber (World Bank 2009). The agriculture sector, therefore, has a prominent role to play in reducing on-going ad-hoc conversion of forest land to other uses by improving productivity on existing crop and range systems. 30 9. The Government recognizes that land productivity is a key to achieving poverty alleviation, food security, ecological and climate stability, and the Millennium Development Goals (MDGs), and that further effort is urgently needed. Nigeria's 7 Point Agenda specifically includes land degradation,19 and the Country Partnership Strategy (CPS) notes that from mid-70s to mid-90s there was a nine-fold increase in degraded lands. It emphasizes that Nigeria's agricultural growth has resulted in expansion of area cropped and recommends that the sector must shift to intensification. To do that sustainably, improved land management practices need to be scaled up as part of an integrated approach to smallholder development (see box 1). 10. Many SLM practices have positive cost-benefit ratios in agro-ecologies throughout Sub-Saharan Africa (see appendix), yet adoption in Nigeria remains hindered by low awareness, lack of access to advisory services and credit, and insecure land tenure. Nigeria does have some best-bet practices; for example, alley cropping using the trees Gliricidia and Leucaena reduced soil erosion by 73 percent and 83 percent respectively, while providing additional fodder, fuel, and nitrogen fixation. Erosion is also managed in Nigeria using other mechanical methods or structures which serve as barriers using stones or vegetation installed along contour lines (Morgan 1995). As they operate as filters, they encourage sedimentation, increase infiltration, and facilitate the formation of natural terraces (Lal, 1990). The perennial Vetiver grass has served this purpose in many places in northern Nigeria (Malgwi, 1995) and is recommended as an appropriate soil conservation technology for semi-arid zones as it also withstands climate and land degradation risks such as denudation, fire, drought, and flood. These and other SLM practices can deliver improved yield while sequestering carbon in soil and biomass (see table 2). In western Nigeria, no-tillage combined with mulch application had a dramatic effect, increasing soil carbon from 15 to 32.3 tonnes per hectare in 4 years (Ringius, 2002). Not only is carbon sequestration critical for long-term climate stability, changes in carbon present in soil and biomass are considered proxy indicators for overall ecosystem function and land quality and therefore the services ecosystems deliver such as water filtering, biodiversity, soil formation and fertility, and so on. 19 For more on the government's strategy and objectives, see section 3 below. 31 11. Table 2. Impact of sustainable agricultural land management practices on food production and carbon sequestration in soils and above-ground biomass* FAO farm system category Average increase in Carbon sequestered (ton C/ha/year) crop yield (%) Smallholder rainfed humid 102.2 (±9.0) 0.46 (±0.034) Smallholder rainfed highland 107.3 (±14.7) 0.36 (±0.022) Smallholder rainfed dry 99.2 (±12.5) 0.26 (±0.035) Dualistic mixed 76.5 (±12.6) 0.32 (±0.023) Smallholder irrigated 129.8 (±21.5) 0.15 (±0.012) Wetland rice 22.3 (±2.8) 0.34 (±0.035) All projects 79.2 (±4.5) 0.35 (±0.016) Pretty et al. (2003, 2006). *Standard errors in parenthesis The response 12. Nigeria's flagship rural development operation, Fadama III, will contribute to safeguarding the ecosystem services provided by intact production systems such as floodplain cropping, grazing reserves, and other community defined areas, generating intertwined local and global benefits. Over 2.2 million households20 are targeted nationwide by the baseline Fadama III project. The GEF incremental grant under TerrAfrica's Bank-led Strategic Investment Program will strengthen this dimension. Environmental benefits are assumed to accrue from the uptake of locally selected SLM practices, each of which deliver a range of environmental and economic benefits centered on maintenance of vegetation cover and soil quality. These benefits vary depending on type of technology employed, the relative attractiveness of the SLM practices to participating communities, the local land degradation and climate risks faced by the communities, and the agro-ecological zone. Global environmental benefits to be delivered by the operation center on key primary ecosystem services from well- functioning production landscapes such as soil formation, carbon retention in soil and biomass, above and below ground biodiversity from improved crop and range management as well as avoided deforestation, improved ability of communities to adapt to climate change, and lastly, improved infiltration and freshwater availability in some transboundary situations. Local benefits to be delivered by the operation center on secondary ecosystem services that result from the primary ecosystem services and include food, fuel, fiber, fodder, and freshwater. B. Barriers to greater adoption of sustainable land management practices 13. The barriers to improved land and water management are centered on fragmented institutions and knowledge. A major obstacle in Nigeria is the lack of detailed knowledge about land degradation, soil productivity losses, depletion of grazing reserves, and deforestation rates. As a result, only limited progress has been achieved in developing and disseminating sustainable agricultural production technologies. Resource-conserving technologies such as use of crop rotations, agro-forestry practices, and integrated crop-livestock systems have had low rates of adoption, either because the technologies have been lacking, because farmer awareness has been low, or because incentives to adopt have been weak (World Bank 2009). (1) Fragmented institutional coordination, capacities, mandates, and policy have together resulted in frequent policy shifts and disincentives such as poor land access and overlapping or unclear ownership. These weaknesses are found at all levels, local to federal. For example, lack of farmer access to 20 The Project will reach approximately 2.2 million beneficiary households, both direct and indirect. In addition, it is expected that the Project could also affect an additional 2 million households, as members of communities not benefiting directly from sub-projects, and non-fadama communities will gain from the investments in public infrastructure and from additional income and employment effects. 32 the admittedly under-capacitated advisory services also hinders uptake. One effect of this fragmentation is that the capacity to implement SLM has been compromised, resulting in. among other things, relatively weak leadership from the Nigerian government on articulating its rural land management investment priorities across sectors. (2) Knowledge gaps and fragmentation are commonplace, sustaining the institutional underperformance and hindering methodical uptake of SLM. For example, no classification of land use capabilities exists, research and extension is isolated from investment and policy decision making, M&E is poor, and the evidence base of land degradation and climate risks is outdated or often anecdotal. Despite this, there is evidence of good SLM practices that can be scaled up in service of multiple sectors and themes prioritized by the country. These two barriers are discussed in turn below. B.1. Fragmented institutional coordination, capacities, mandates, and policy 14. Policy inconsistency and administrative changes in government. Inconsistencies owing to frequent change of government are one constraint to most programs and projects related to land use and management. This constraint manifests itself in lack of continuity and shifts in approaches by successive governments at various levels. Many policies were formed and scrapped within a short time period as a result of change of government. This leads to abandoned programs, projects, and policies. 15. Insecure land tenure can be a barrier to investment in land quality. The overlap between government and traditional authorities' land ownership could form a disincentive to investment in land quality in some areas but the data is inconclusive. The Federal Office of Statistics in 1999 identified land tenure as a key determinant in yields and on-farm land degradation; research in 2006 challenges this perspective but has a minority audience in the country. 16. In most agencies a past reliance on top-down, compartmentalized approaches has hindered participation of rural people in government programs. Lack of participation of rural people reduces policy effectiveness. Although this is changing with the recent uptick in the frequency with which communities are driving investment operations in the past decade in Nigeria, attitudes among communities and in government continue to evolve in favor of greater community voice in natural resource management and economic empowerment. 17. Lack of a coherent framework for coordination on policy and practice related to land use and management. Although there is some reason for optimism, the institutional arrangement for land and water management is inadequate, a phenomenon responsible for duplication of efforts by sectors as well as partners active in agriculture and natural resource management. This leads to inefficiency in resource utilization among ministries and organizations. Inter- institutional coordination and cooperation is minimal or non-existent, both vertically and horizontally. Similarly, inadequate monitoring and evaluation accounts for a mismatch existing between most SLM policies or programs and their goals. Land degradation and climate risks are seldom included appropriately in decision-making. Several ministries in Nigeria have taken a leadership role on land matters but move in somewhat different directions because of conflicting institutional jurisdictions on use of land resources. Another implication is the emergence of duplicating roles on the same issues by different ministries or parastatals, such as conflicting mandates of local and state institutions. 18. Poor implementation of policies and weak enforcement of SLM related legislation. Bureaucratic bottlenecks negatively affected SLM related projects in Nigeria by shifting their 33 focus away from the fundamental objectives of the project. Sound policies are usually supported with legislation, but most of them lack enforcement, possibly due to, among other reasons lack of funds and lack of technically trained personnel. The number of committed, capacitated staff in the federal, state and local government's ministries, agencies and parastatals related to environment is inadequate to address the scale of land degradation and climate risks, or the complexities inherent in multi-sector solutions that are necessary to protect land productivity and soil and water resources. For a variety of reasons, the activities of forestry and range land management staff are likely no longer as effective as in the 1960s and 1970s. Since then, for example, almost all state forestry departments abandoned any form of management of natural forests. Major barriers to up-scaling sustainable forest management include shortage of funds, inadequate public sensitization, limited stakeholder participation and ill-equipped forest guards. The agriculture sector, therefore, has a prominent role to play in reducing on-going ad-hoc conversion of forest land to other uses by improving productivity on existing crop and range systems. 19. Lack of coordination among partners working on land use and management issues including climate risk. Land management implementation, investment planning, and policy development are fragmented, falling across a range of federal and state agencies and involving countless stakeholders. Investment dialogues are fragmented, leading to projects working at times at cross purposes and bearing opportunity costs of synergies foregone. There is little coordination with universities, research institutes, or NGOs. Many researchers and academia are unaware of policy changes on agriculture or environment except when engaged directly with such ministries, which hinders implementation. Domestic policy dialogues and policy documents are insufficiently accessible to most citizens, which limits policy relevance and implementation. There is a need to expand the public sphere around policy and investment affecting rural areas. 20. Inappropriate economic policies including pricing. Although the policy thrust of NEEDS with regard to the environment is to ensure a safe and healthful environment that secures the economic and social well being of Nigerians on sustainable basis, not enough priority was given to the environment and science and technology when compared to other sectors. Empirical evidence shows an inextricable linkage between poverty and environmental degradation in Nigeria. The past antipoverty initiatives had some weaknesses including: (i) Ad-hoc and uncoordinated response to poverty; (ii) Absence of comprehensive policy framework; (iii) Excessive political interference; (iv) Ineffective targeting of the poor; (v) The unwieldy scope of programmes causing a thinly spread of resources across too many projects; (vi) Overlapping functions leading to institutional rivalry and conflict; (vii) Absence of sustainable mechanisms in programmes and projects; (viii) And lack of involvement of beneficiaries in projects design, implementation, monitoring and evaluation (FME, 2002; NPC, 2005; Ivbijaro et al, 2006). Issues related to land policy/reform and pricing policies and management of natural resources require greater financial commitment than is presently the case. 21. Lack of access to support services, farm inputs and credit. Most Nigerians live in rural areas and many live a peasant life which is a catalyst to mismanagement of land resources. For example the high energy prices in Nigeria, force many people to resort to the use of wood as a major source of energy. Similarly, Nigeria is characterized with predomination of small-scale farmers who depend heavily on rain-fed agriculture with inadequate supply of farm inputs; inadequate mechanization; inadequate finance and inadequate infrastructure. These consequently pose a threat to environment through desertification, uncontrolled grazing, bush burning, felling trees for fuel wood and other attending crises. Most communities engage in activities that 34 degrade the land resources partly due to lack of substitute or absence of subsidy for the environment friendly operations. B.2 Knowledge gaps and fragmentation 22. Inadequate access to information and knowledge by smallholders. Among farmers and extension services, there is a lack of sufficient information on SLM practices, including both agronomic techniques and land use approaches. Most rural farmers tend to adhere to traditional land use practices passed down through generations. Such practices may have been sustainable in a different era but with competing demands on the land resource, some practices exceed carrying capacity. Lack of access to good information, quality extension advice, weather forecasts, and farmer-to-farmer exchanges hinder land care and adaptive responses to climate change. Similarly, many communities are unaware of who is directly responsible for enacting laws that govern the use of any natural resource. 23. Knowledge is isolated and can be put into better use. Many research institutes and development partners have carried out several studies on SLM. However, this knowledge has remained on shelves and many of the potential beneficiaries are unaware. 24. Key knowledge gaps need to be filled. Lack of comprehensive data on the state of land resources and climate risks in Nigeria. Nigerian investments do not yet enjoy a comprehensive study on the causes and effects of different forms of land degradation. Most of the existing information is based on the expert-survey based 1990 GLASOD study, along with various case studies that remain isolated or limited in scope. A new generation of research coupled with a new generation of cost-effective remote sensing technologies can better quantify the extent and impacts of land degradation. The World Bank is now sponsoring research that is being carried out by IFPRI on the costs of land degradation and the benefits of SLM. Such renewed interest in the international community for agriculture, land management and climate change issues points to an eventual dismantling of this barrier, but dissemination will still be key. Within Nigerian institutions, sometimes the ability to conduct research is hindered by lack of financial or technical capacities and modern scientific equipment and laboratories. B. Government strategy and higher level objectives to which the Project contributes 25. To better address the barriers outlined above, the Federal Government recently formed the National SLM Technical Committee to improve investment programming across the many sectors and themes related to land management.21 The committee, active at technical and ministerial levels and currently chaired by FMARD, is actively building an integrated program-based approach to investment in climate-resilient land and water management by improving vertical and horizontal coordination of institutions and sectors involved in investment planning, analytics, and policy. Seeking to avoid duplications in rural investment, the Committee is bringing stakeholders together to develop an SLM Investment Framework to prioritize investments needed to bring SLM to scale to reduce risks from poor land management and climate variability. The SLM Investment Framework is being developed in the context of CAADP and the TerrAfrica partnership, with technical assistance from the World Bank under both TerrAfrica and the baseline Fadama III project. 21 Includes Federal Ministry of Agriculture and Rural Development (Committee Chair, and includes CAADP focal point), Federal Ministry of Environment, the Federal Ministry of Finance, the National Planning Commission, and NEPAD Nigeria. 35 26. The National Economic Empowerment and Development Strategy (NEEDS) explicitly recognizes the strategic importance of the agricultural sector and lists a number of special initiatives and targets that the federal government intends to pursue to promote increased productivity. 27. In addition to the strategic objectives outlined in the NEEDS, the Government has recently unveiled its seven-point agenda for economic development. The President's 7 Point Agenda prioritizes agricultural productivity while recognizing Nigeria's underperformance in raising productivity. The Program notes that to improve sector performance, action is needed to improve soil fertility, land tenure, predictability and efficiency of public sector funding, extension, environmental sustainability, and to resuscitate Nigeria's fight against land degradation. These findings and priorities are matched by an emerging body of analytics and research, although key gaps persist in quantifying land degradation pressures, states, and even responses, as well as a clear understanding of climate change on the productivity and sustainability of rural land use systems. The 7 point agenda accords with Nigeria's National Action Programme to Combat Desertification. 28. To help address these priorities and advance community-led rural development, the Government decided to formulate the baseline investment operation, Fadama III. The Fadama series has evolved over the years into a large-scale and deeply owned national rural development program quite different from the predecessor operations, which focused on floodplain agriculture in a limited number of States. The new program is vast, with a proven and robust implementation mechanism that enjoys nationwide reach and credibility ­ representing an important opportunity for mainstreaming SLM. 29. Bank Assistance Strategy. Both the baseline Fadama III project and this incremental GEF Project are in line with the Nigeria Country Partnership Strategy (Report No. 32412-NG), which is designed to support the implementation of Nigeria's economic growth and poverty alleviation strategy as outlined in the NEEDS. 30. Both the baseline Fadama III project and this incremental GEF Project support the government's strategic objective to enhance non-oil growth in order to achieve increased food security, reduce poverty, improve environmental sustainability, and create employment and improved opportunities in rural areas. Fadama III does so by: (i) financing community defined investments in productive community infrastructure to raise land and agricultural productivity and diversify sources of livelihood; (ii) building the capacity of community organizations to increase the stock of social capital; (iii) strengthening the capabilities of participating states and local governments to deliver services to the rural poor; and (iv) promoting socially-inclusive and environmentally sustainable management of natural resources. With GEF incremental support, the Project also contributes to achieving the goals of the New Agricultural Policy (NAP) and the Rural Sector Strategy (RSS) as well as the AU/NEPAD Comprehensive African Agriculture Development Program (CAADP) target of 6 percent agricultural growth, objectives of the TerrAfrica Partnership and its main investment activity: the multi-agency GEF Strategic Investment Program (SIP) for SLM in Sub-Saharan Africa, which is led by the Bank and NEPAD and is providing this incremental grant to the baseline Fadama III Project. 36 C. List of SLM practices appropriate for Nigeria's community-driven rural development 31. The objectives of including SLM practices among community driven investment options are to (i) incorporate SLM into local development planning and land use and (ii) increase uptake of SLM by local Economic Interest Groups or their larger apex Community Associations. In the context of the operation, options for SLM investment include: (i) profitable SLM activities that increase or maintain cropland and rangeland productivity and reduce incentives for land conversions from forest to other uses, (ii) profitable entrepreneurial activities that can help alleviate land degradation risk and land conversion pressure, or (iii) complementary land management practices that are advocated through the Project's sensitization and training activities yet not directly financed by the Project. In many cases, SLM practices offered or promoted via the operation should help communities to build resilience to the effects of climate variability and change. It should be recognized, however, that no blueprint technology can serve all of Nigeria's different agro-ecological zones. Local customization is needed. 32. Key criteria for inclusion of a given SLM practice in the menu of investment options under the Project are that they are profitable preferably but not exclusively within 1-2 years, scalable and appropriate to the different agro-ecological zones. Initial emphasis may lie on i) entrepreneurial activities that may reduce degradation of land, water, and forest resources through income diversification, as well as ii) agronomic and vegetative technologies that tend to result more rapidly in improved soil structure, moisture, and fertility and thus increased productivity. Examples for SLM technologies include: mixed cropping systems, grazing reserves, compost making, mulching, erosion control measures, orchards, nursery establishment, alley cropping with Leucaena or Gliricidia trees, etc. 33. While GEF incremental funding would help to promote the menu of sub-project options with a selection of viable SLM technologies, actual sub-project investments will be made via the existing demand-driven matching grant mechanism under the baseline Fadama III project (GEF support will be provided to some communities in the form of the Community SLM Award. See Annex 4). Most GEF resources will support knowledge dissemination, sensitization, monitoring and evaluation among stakeholders including an emphasis on participating communities and Project Facilitators, and extension, but also including local government authorities and State and Federal officials. 34. A table of technologies promoted in the Project is presented in Annex 4 para 17. For each technology, an indication is made for profitability and benefits related to climate adaptation, operating and maintenance costs and payback, and environmental benefits. Below are detailed summaries of major types of SLM practice that could be scaled up in Nigeria. Many o0f these technologies are being or will be promoted by the Fadama III program. Detailed summary of indicative best fit SLM practices for Nigeria 35. Mulching. This practice involves the use of organic or sometimes synthetic materials to cover the soil surface for a number of benefits which include reduced run-off, moisture retention, reduced loss of soil, regulation of soil temperature, suppression of weeds, etc. In Nigeria different types of material such as residues from the previous crop, brought-in mulch including grass, perennial shrubs, farmyard manure, compost, byproducts of agro-based industries, or inorganic materials and synthetic products can be used for mulching (Lal, 1990). 37 36. Composting. Compost is well-rotted vegetable matter which is prepared from farm refuse (straw, crop stubble, weeds and crop residues, etc) and house waste (sewage, sludge, street and dustbin, etc). Compost is prepared in trenches. It needs no skilled labor to make, and it uses locally available materials, so the cost is minimal. Compost is a good source of organic manure and its practice is wide spread among farmers in Nigeria. 37. Liming. Many of the farmer's fields in Nigeria are acidic. This could be caused by the nature of the parent material which influences the development of soil acidity (e.g. Quartz, Feldspars, Granite, Gneisses, etc) or be caused by the type of climate such as the humid regions which rapidly makes soils acid as a result of leaching away the bases or soils could be acid if acidifying fertilizers are used such as those with ammonium. Liming is a strategy used to bring acid soils back to production. There are a number of studies done in Nigeria in this respect. Chude et al (2005) have produced a Handbook on soil acidity and use of agricultural lime in crop production which can serve as a useful guide for Nigerian farmers. 38. Cover cropping. Some types of crops especially members of the legume family which usually grow fast and prostrate have been found to be very useful in improving the soil quality. Examples include P. phaseoloides, M. pruriens, Centrosema pubescens, Stylosanthes guianensis, and Phaseolus aconitifolius or the grasses Pennisetum purpureum, Brachiaria ruziziensis, and Paspalum notatum (Lal 1995a). Their dense canopy prevents rain drops from detaching soil particles and this keeps soil loss to tolerable limits, so cover crops play an important role in soil conservation (Okigbo and Lal, 1977; Lal, 1978; Ahaneku 1985). 39. Improved fallow. Fallowing is still a common practice in some parts of Nigeria although the rapid population increase has led to the reduction in the years of fallow never the less where it is practiced a lot of advantage can be derived when inter-sown with some beneficial crops. Juo and Lal (1977) showed that fallows with Guinea grass (Panicum maximum) provide much organic matter to the soil. Shrubs of woody plants such as pigeon pea (Cajanus cajan) are advantageous in improving the physical soil conditions due to the penetration of their rootlets into deeper soil layers Jaiyeoba (2003), Salako and Kirchhof (2003). 40. Agro-forestry. Agro-forestry is a collective name for a land use system in which woody perennials are integrated with crops and/or animals on the same land management unit (Junge et al, 2008). The integration can be either in a spatial mixture or in a temporal sequence (Rudebjer et al, 2001). Several studies have been conducted by researchers in various parts of Nigeria on alley cropping with promising results. Trees or shrubs such as Leucaena leucocephala, Gliricidia sepium, and Senna siamea are planted as contour hedges between strips of cropland generating a reduction in soil erosion and other benefits. The reduction of soil erosion by alley cropping obviously depends on the spacing between the hedges and the species. The 4-m spacing was adequate for erosion control with L. leucocephala and 2-m spacing for G. sepium. The age of the perennials is also important as most species become effective sediment traps about two to three years after planting (Lal, 1990). Young (1989) attributed the potential of agroforestry as an erosion control measure to its capacity to supply and maintain a good soil surface cover by the tree canopy and the pruning material. Another potential is the effect of a runoff barrier when trees are planted across the slope. As the intensive rooting by the woody perennials also improve the structure and infiltration rate of the soil, the amount of runoff and hence soil loss are reduced. 38 41. Some tree species such as Leucaena leucocephala have been proven in Nigeria to generate multiple additional benefits in two years, including nitrogen fixing, fuel, fodder, and construction material. The International Institute for Tropical Agriculture (IITA) in Ibadan has for several years developed a method for planting giant Leucaena as an intercrop with corn, yams, and rice. In the growing season the trees are kept cut and pruned so they do not shade nearby crops. The resulting twigs and leaves are used as nitrogen-rich mulch, the larger branches for poles or relatively clean-burning charcoal fuel. In dry season, the trees are allowed to re-grow and draw nutrients from deep soil. The benefits build up over time. On an infertile, sandy soil on an IITA research plot, this approach has given corn yields of more than 3-5 tons per hectare in the second season, without added fertilizer. This is four times Africa's average corn yield. 42. Gliricidia septum is a small leguminous tree currently used on farmers' fields in several locations in Oyo State, western Nigeria, where it seems farmers value this introduced woody legume in restoring soil fertility. Despite its widespread use, and farmers' acceptance, there is hardly any study or account of this woody legume in Nigeria. During a field survey in the Ibadan area, it was determined that leaf protein content was calculated to be 23.6 per cent and soils under G. septum fallow had higher nutrient status than comparable sites under natural bush fallow. 43. Intercropping or strip cropping. Intercropping is the system of growing two or more crop species simultaneously in the same field during a single crop growing season. For sustainability often the companion crop in the mixture should be a legume because of its nitrogen fixing ability. In the typical Nigerian farming systems the legume is shorter and spreading (e.g. cowpea) while the other crop is taller (e.g. maize). The dense ground cover reduces erosion, lowers evaporation and increases water infiltration. The crops should have different rooting profiles to avoid competition for soil nutrients and moisture, and should mature at different times. An improvement over the traditional system is the use of strip cropping. This is the growing of two or more crops simultaneously in different strips wide enough to permit independent cultivation but narrow enough for the crops to interact agronomically. This system has advantages over the mixed intercropping common with the farmers. 44. Contour ploughing. Plowing along the contour (across the slope, rather than up and down) helps slow run off and prevent gullies from forming. Tillage, planting and other farm operations are done along the contour thereby impeding the down slope flow of water, allowing the water to infiltrate and avoiding erosion. Contour farming on slopes of 4 to 6 percent can reduce water loss (runoff) by 50 percent soil loss by about 50 percent compared to up and down hill cultivation (FAO, Water Conservation; Constantinesco, 1976). 45. Terraces and contour bunds. Junge et al (2008) described contour bunds as made of earth or stones or terraces that consist of an excavated channel and a bank or ridge on the downhill side for cultivating crops which are permanent erosion control technologies (Morgan, 1995; Lal, 1995). The first are installed across slopes of low gradients, the latter at right angles to the steepest slope in hilly areas. Research on contour banks was conducted by Couper (1995), who considered these measures to be useful to prevent gully erosion, the most spectacular type of erosion. He also prepared an implementation guide for farmers including the description of the design and construction of graded contour banks. Field trials on terraces made by Lal (1995) in Ibadan showed that the mean soil loss from a catchment without any erosion control measures was 2.3 t ha-1 and from a terraced catchment, 0.7 t ha-1. Terraces were also built in Mokwa (Palmer, 1958), in the Pankshin area on the Jos Plateau (Longtau et al., 2002), and at Maku near Udi-Nsukka (Igbokwe, 1996). The records state that permanent structures of these kinds are effective soil conservation technologies as excessive soil loss and silting up of the fields are 39 reduced. However, high labor intensity, time-consuming regular inspections, high consumption of scarce farmland, and the large amounts of construction material required are factors that stop farmers from installing or maintaining terraces (Junge et al, 2008; Igbokwe, 1996). 46. Other erosion control structures. Erosion can also be managed using other mechanical methods or structures which serve as barriers using stones or vegetation installed along contour lines (Morgan 1995). As they operate as filters, they may not reduce the runoff amount but retard its velocity and hence encourage sedimentation, increase infiltration, and facilitate the formation of natural terraces (Lal, 1990). The Vetiver (Vetiver zizanioides), a perennial grass with a deep, fibrous root system has served this purpose in many places in northern Nigeria (Malgwi, 1995). He recommends this grass as an appropriate soil conservation technology for semi-arid zones as it also withstands climate and land degradation risks such as denudation, fire, drought, and flood. 47. Ridging/Ridge tying. Ridge tillage is the practice of planting or seeding crops in rows on the top, along both sides or in the furrows between the ridges, which are prepared at the beginning of every cropping season. Tied ridging or furrow diking includes the construction of additional cross-ties in the furrows between neighboring contour ridges (Lal, 1990). These practices are common in Nigeria but the latter is most often seen in the semi-arid part of northern Nigeria. The ridges (along the contour) encourage water to infiltrate. Rainwater is trapped in the furrow between the ridges (i.e. the furrows are dammed with small `ties', forming small basins). Tied ridges decrease the run-off and increase storage. In normal and dry years they may con- tribute to yield increases up to 300 percent. However, during high rainfall years water may stream above the `ties' and destroyed them. They are best applied in areas of 500 to 800 mm annual rainfall on level or slightly inclined land on soils with low water infiltration rate, but can be applied on any type of soil. To avoid the risk of damage the furrows should be on gentle grade to assist run-off if the ties fail (FAO, Water Conservation). 48. Minimum till. The increase in population and the changing attitude to agriculture has resulted in increased intensification and mechanization of farming activities. Significant problems can arise from soil tillage using heavy implements and animal traction which include soil compaction, erosion and runoff. Thus, because of the negative consequences of frequent tillage in many tropical soils, there is the new concept of reduced tillage i.e. minimum or zero tillage, which has been highly successful in Brazil, the US, Zambia, and elsewhere. Minimum tillage describes a practice where soil preparation is reduced to the minimum necessary for crop production and where 15 percent to 25 percent of residues remain on the soil surface (Morgan, 1995). No-till or zero-tillage is characterized by the elimination of all mechanical seed bed preparation except for the opening of a narrow strip or hole in the ground for seed placement. The surface of the soil is covered by crop residue mulch or killed sod (Lal, 1983). 49. Depending on local conditions, reduced tillage can increase soil moisture and organic matter while generating increased yields. Its main objective is that, under continuous cultivation, soil regeneration is faster than soil degradation so that intensification of agricultural production is economically, ecologically and socially sustainable (FAO Land and Water Bulletin 8). Investigations focusing on the influence of different tillage methodologies performed manually or mechanically on soil properties and crop yields are numerous in Nigeria (Junge et al, 2008). In particular, Lal carried out many field experiments in Ibadan and stated that soil surface management is the key for solving problems associated with the transition from traditional farming to more productive land use systems in the tropics (Lal 1982, 1983). He developed a tillage guide based on factors, such as soil moisture regime and texture, to assess the applicability of tillage and no-till practices for different tropical soils (Lal, 1982) and specified tillage-based technological packages for sustainable soil management on small-scale and 40 medium-sized farms in the tropics (Lal, 1991). According to these studies, no-till and mulch farming are sustainable management technologies for the humid and sub-humid tropics, whereas rough plowing, tied ridging, and mulching are appropriate techniques for the semi-arid area (Junge et al, 2008). However, in some instances the use of tillage is necessary, for example Takken et al. (2001) recorded that the use of tillage implements was more effective than no-till for each level of compaction. According to him, the germination and yield of cotton were higher on compacted plots treated by disk harrowing or plowing than on plots without any tillage. Aeration of clayey soils with poor drainage conditions or during wet periods is also improved by ridging and especially supports the production of root and tuber crops (Kowal and Stockinger, 1973). Eziakor (1990) recommends ridge tillage also for shallow soils, where hardpan seriously restricts root development and crop production. 41 Appendix 1: Summary of Nigeria's land degradation situation 50. The President's 7 Point Agenda reports that agriculture is the fastest growing sector in the non-oil economy. In 2005, it contributed 6.8 percent out of the 8.2 percent growth rate recorded by the entire non-oil sector. The Agenda, however, prioritizes agricultural productivity while recognizing Nigeria's underperformance in raising productivity. The Program notes that action is needed to improve soil fertility, land tenure, predictability and efficiency of public sector funding, extension, environmental sustainability, and to resuscitate Nigeria's "greenbelt programme" against land degradation. These findings and priorities are matched by an emerging body of analytics and research, although key gaps persist in quantifying land degradation pressures, states, and even responses, as well as a fuller understanding of climate change on the productivity and sustainability of rural land use systems. Appendix 1: Ta ble 1 Appendix 1 : Table 1: Status of land degradation in Nigeria Consequence Pressures, States, Impacts Loss of Over 27 percent of land had suffered some form of degradation in Nigeria (GLASOD 1990). productive Crosson (1997) associates land productivity loss in Nigeria with different degradation levels. Areas lightly potential of degraded are assumed to have lost 5 per cent of their original productivity; areas with moderate degradation land resources lost 18 per cent; and areas strongly or extremely degraded are assumed to have lost 50 per cent of their original productivity. Improper agricultural practices are common in every part of the country. Soils are not adequately protected by cover crops; crop rotation is hardly practiced (FME, 2006). Population pressure, over grazing and the continuous exploitation of marginal lands have aggravated drought and desertification. Entire villages and major access roads have been buried under sand dunes in the northern portions of Katsina, Sokoto, Jigawa and Borno States (World Bank 2006). Irrigated cropping has led to severe land degradation due to waterlogging, salinization or alkalinization from a number of irrigation projects such as Bakolori, South Chad, and Hadejia-Jamaare; over a third of Nigeria's irrigated land suffers from salinization (UNCCD NAP 1997) Loss of forest Nigeria has the world's highest deforestation rate of primary forests and Africa's highest rate of total forest resources loss. Between 2000 to 2005 the country lost 55.7% of its primary forests, an annual rate of 11.1% (FAO 2005). The forest cover is now less than a third of what it was in the 1960s (World Bank, 2005). Deforestation is pronounced in the rainforest zone of eastern and western Nigeria. Annual deforestation rate is estimated at 3.5%, which translates into more than 400,000 of lost hectares. This tends to open up the lands for soil degrading catalysts such as water erosion and flooding with its attendant washing away of the fertile top soils as well as leaching. The situation is more pronounced within the Guinea savannah area. In the case of the savannah area of the middle belt, deforestation is combined with bush burning to open up the already sterile soils for further degradation, thereby paving way for further reduction of fertility, agricultural productivity and yield per area. (FME 2006). There are numerous causes for this mass-scale deforestation: high population growth rates resulting in the expansion of agriculture, high urban and rural demand for wood and fuelwood, commercial logging, weak institutions and policy in most states (World Bank, 2005). The value of net depletion in the timber wealth of the country due to deforestation in 2002 was between $106 and $964 million, equivalent to 1.15 per cent of GDP (World Bank, 2005). Flooding and Erosion poses the greatest threat to Nigerian soils and affects over 80% of the land. Wind, sheet, gully, mud erosion and beach erosion affect different parts of the country in varying intensities (Ogunlela 2006). Annual 35 million square meters lost to gulley erosion (Mbagwu 2000). Particularly severe in Cross River, Plateau, Adamawa and southeastern Nigeria. While wind erosion is confined to the arid north, sheet erosion is ubiquitous throughout Nigeria (NNP 2006). Areas most prone to sheet wash are areas where farming has cleared the original vegetation, generally turning the area into scrubland. Flooding in Nigeria has been due to natural and artificial factors. The unevenly distributed rainfall in term of amount of duration, and the climatic variability resulted in abnormal runoff generation (NNP 2006). 42 Appendix 2. Costs and Benefits of Selected Land Management Options in Nigeria The following is an extract from a draft report from on-going analytical work. 51. This analysis is aimed at providing empirical evidence for advising on the type of SLM technology investments in three States in Nigeria representing three diverse agro-ecological zones (north, central, south). Since land degradation and investment and returns to SLM can be long-term processes, time series data are required to effectively conduct benefit-costs analyses (BCA) of SLM. Additionally, there are both on-farm and off-farm costs of land degradation and benefits of SLM. Assessment of the off-farm costs and benefits is complicated and difficult to measure (Berry, et al., 2003; Hein, 2006). Hence there has been a limited number of studies that have assessed the on-farm and off-site costs and benefits of land degradation and SLM investment. This analysis is carried out using fairly simple methods and approaches that can be easily replicated in other studies. The approach compares profit of agricultural production with and without SLM practices. Overall, preliminary results (Jan 2010) suggest that land management practices that combine organic and inorganic fertilizers and crop residues are more sustainable than those which use either one of them alone. The analysis is on-going. 52. The tables below show that a combination of crop residues, soil organic matter (manure and compost) and fertilizer has the largest yield and average net benefit for rice and maize. The maize and rice yields for plots receiving 40kgN/ha, 1.67 tons/ha manure and 50 percent crop residue, which produced more realistic yield estimate, was higher than treatment not integrating all three land management practices. The results also show that a combination of all land management practices has a benefit-cost ratio above the practices that use any practice alone. Additionally, the average returns to labor day are more than N300, which is the rural daily wage rate22 for all practices. This suggests that land management practices included in the simulation are competitive in the rural labor market. This is consistent with other socio-economic studies which have shown that land management practices that strategically integrate organic and inorganic soil fertility management practices (Integrated soil fertility management, or ISFM) (Vanlauwe and Giller, 2006; Tittonnell, 2008) are more profitable than practices using either mineral fertilizer or organic soil fertility management practice alone (e.g. Doraiswamy, et al., 2007; Sauer and Tchale, et al., 2007; Mekuria and Waddington, 2001). Adoption rate of the ISFM practices is low. Only 11 percent and 4 percent of sampled plots received fertilizer and manure in the low market access and high market access villages respectively. The constraints leading to the low adoption of the ISFM ­ despite their high returns ­ include poverty, lack of cattle and poor extension services (Akramov, 2009; Nkonya, et al., 2010b). Consistent with Tittonell, et al., 2008, farmers with no livestock are less likely to use ISFM due to the lack of household production of manure and animal power for transportation of the bulky input. 22 Minimum wage in Nigeria is also Naira 7500/month, which is about Naira 300 per 25 working days. 43 Appendix 2: Table 1: BCA of paddy rice production in Niger and Sokoto states Returns Net NPV to labor CO2-eq benefit (million BC 000 Yield balance Land management practice 000 N N)1 ratio N/day tons/ha tons/ha2 All zero 13.32 - 9.21 1.02 1.12 10.5 Crop residues 100% 23.04 1.03 24.55 2.56 2.79 11.4 Compost 1.67 tons/ha, 50% crop residues 17.21 -0.69 9.98 1.40 1.77 11.0 Manure 1.67 tons/ha, 50% crop residues 19.18 -0.55 11.45 1.82 1.98 11.0 Compost 1.67 tons/ha, 100% crop residues 24.50 0.13 28.81 2.98 3.26 11.5 Manure 1.67 tons/ha, 100% crop residues 30.99 0.59 38.11 3.91 4.28 11.6 40kgN/ha, manure 1.67tons/ha & 50% crop residue 38.35 1.25 20.75 3.73 4.33 11.3 80kgN/ha, 100% crop residue 78.97 3.59 20.37 8.18 9.49 12.4 80kgN/ha, 5 tons/ha compost, 100% crop residue 44.23 1.22 12.66 3.31 3.95 10.4 80kgN/ha, 5 tons/ha manure, 100% crop residue 89.03 4.06 22.30 4.66 10.24 12.5 1 The 100% crop residue only treatment is compared with the all zero treatment. All other treatments are compared with the 100% crop residue treatment. 2 Nets out the emission due to manufacturing, transportation and application of fertilizer and emissions from manure, compost & crop residues. 53. Using a baseline incorporation of 100 percent of crop residue as a benchmark, we computed the Net Present Value (NPV) in order to determine the long-term benefits and costs of each land management practice.23 The results show a similar pattern that practices that combine crop residues, organic matter and fertilizer were more profitable for rice and maize than practices that either management alone. NPV and average net benefit for millet practices that include incorporation of all crop residues do better than those which harvest 50 percent or all crop residues. Land management practices using compost ­ with a lower percent of nitrogen than manure ­ also have low profitability. This is largely due to the high labor required to prepare and apply compost. For cowpea in which no fertilizer organic matter yield response was simulated, yield was not comparable across all land management practices considered: 100 percent, 50 percent and 0 percent crop residues. 23 For the 100% crop residue management practices, the benchmark treatment was the one where 100% of crop residues are harvested. 44 Table 2: BCA of different land management practices for millet production in Niger and Sokoto States NPV Returns to CO2 equiv. Net benefit million labor (000 Yield Balance (000 N/ha) N BC ratio N/day) (tons/ha) (Tons/ha) Nothing 9.50 4.7 0.86 0.71 12.7 Crop residue 100% 12.71 3.70 8.9 1.48 1.22 13.1 Compost 1.67 tons/ha, 50% residue 11.63 -1.20 7.6 1.19 1.07 13.0 Manure 1.67 tons/ha, 50% residue 13.22 1.30 9.3 1.55 1.27 13.1 Compost 1.67 tons/ha, 100% residue 13.37 0.90 10.2 1.68 1.38 13.3 Manure 1.67 tons/ha, 100% residue 14.56 3.00 8.2 1.96 1.61 13.4 40kgN/ha, 1.67tons/ha manure, 50% crop residues 9.62 11.80 3.5 1.38 1.38 5.8 80kgN/ha, 100% residue 10.65 -2.50 2.7 1.19 1.22 2.8 80 kgN/ha, compost 5 tons/ha, 100% residue 10.77 -2.80 2.3 1.47 1.66 3.3 80 kgN/ha, manure 5 tons/ha, residue 100% 15.54 5.10 3.7 2.12 2.31 3.5 Table 3: CBA of cowpea, Cross River, Niger and Sokoto states Net benefit BC Returns to labor Yield CO2-eq. NPV Land management practice (000 N /ha) ratio (000 N /day) tons/ha tons/ha (million N) Niger and Sokoto states Zero crop residues 21.68 1.60 0.29 1.57 0.39 - 50% crop residues 21.72 1.61 0.29 1.57 0.40 8.33 100% crop residues 21.79 1.61 0.29 1.58 0.40 19.33 Cross River state Zero crop residues 19.07 1.41 0.26 1.43 0.41 19.33 50% crop residues 19.03 1.41 0.26 1.43 0.41 8.33 100% crop residues 18.97 1.40 0.26 1.42 0.40 19.33 54. Due to the high energy requirement for manufacturing and transporting fertilizer and the consequent CO2 emission, the carbon balance for maize and millet land management practices that use fertilizer are lower than those which do not use fertilizer (Table 15 and 18). However, the carbon balances for rice are comparable across all land management practices considered. However, when area saved due to intensification using fertilizer is considered, land management practices that use fertilizer more than compensates the CO2 emissions due to fertilizer manufacturing and transportation and application. For example, maize farmers who use only 100 percent crop residues will need 3.3 ha to produce 4.33 tons/ha achieved on plots receiving 80kgN/ha, 5 tons/ha of manure and 100 percent crop residue. If the farmer clears shrublands (carbon density of 12.7 kgC/ha) to plant maize (cropland density of 5.3 tons C/ha), approximately 24.33 tons C/ha will be lost. The CO2 -equivalence of this is far too higher than any carbon balance of land management practices that do not use fertilizer. 45 55. Overall, our results show that farmers using organic soil fertility will realize higher profits and carbon sequestration than those using fertilizer alone or those not using fertilizer or organic matter. The results also demonstrate the potential of ISFM to mitigate climate change through carbon sequestration. Table 4: BCA of maize, Niger and Sokoto states NPV CO2-eq. Net benefit (million N) BC Returns to labor Yield balance (000 N /ha) ratio (N 000/day) tons/ha tons/ha All zero 41.02 - 1.71 2.71 1.03 13.0 100% residue 58.90 1.37 2.45 3.45 1.32 13.0 Compost 1.67 tons/ha, residue 100% 70.01 0.98 2.92 3.92 1.49 13.3 Manure 1.67 tons/ha, residue 100% 89.83 4.43 3.74 4.74 1.81 13.3 Compost 1.67 tons/ha, residue 50% 54.78 -0.84 2.00 3.42 1.30 13.2 Manure 1.67 tons/ha, residue 50% 72.31 2.34 2.65 2.82 1.58 13.3 40kgN/ha, manure 1.67 tons, 50% residue 175.42 21.95 5.86 8.31 3.26 8.2 80kgN, residue 100% 236.02 38.13 6.59 10.83 4.32 3.4 80kgN/ha, compost 5 tons/ha, residue 100% 226.79 36.18 4.93 4.28 4.33 3.6 80kgN/ha, manure 5 tons/ha, residue 100% 227.35 37.22 4.97 4.35 4.33 3.6 56. BCA of cassava in Cross River State. Table 19 shows that cassava is a profitable crop in both sites, with average net benefit above Naira 50,000 per ha. The NPV, which measures the long-term flows of benefits and costs also shows that the recommended rate of fertilizer of 20kgN/ha and 5 kgP/ha (Aduayi, et al., 2002) is profitable even though fertilizer application increases yield by only 9%.24 This shows a poor response of cassava varieties to fertilizer. The results could also be due to poor calibration of the EPIC model, which gave yields much lower than farmer yields (Table 13). The results however demonstrate the reason for the low adoption of fertilizer use on fertilizer. Only 2 percent of farmers used fertilizer on cassava and 3.38 percent used either manure or fertilizer (Nkonya, et al., 2009). Table 5: BCA of cassava in two sites of Cross River state Site 1 Site 2 All sites Net benefit (N 000) 32.53 34.16 33.34 With fertilizer (20KgN/ha, 5kgP/ha) & manure (1.67tons/ha) 4.90 4.96 5.02 With fertilizer (20KgN/ha, 5kgP/ha) 67.63 68.14 67.89 No fertilizer 65.69 65.28 65.48 Net present value (million Naira) Fertilizer & manure Net present value (Million Naira) Fertilizer only 0.038 0.094 0.066 Returns to labor (N 000) 24 Difference in yield of fertilized and unfertilized plots for all sites, i.e.% yield increase = (4.4-4.02)/4.02)*100 46 Fertilizer & manure 367.52 387.14 377.33 With fertilizer (20KgN/ha, 5kgP/ha) 0.65 0.73 0.69 Without fertilizer 0.61 0.70 0.66 Benefit-cost ratio With fertilizer and manure 1.24 1.30 1.27 With fertilizer (20KgN/ha, 5kgP/ha) 2.94 2.97 2.95 Without fertilizer 3.98 3.96 3.97 Average yield (tons/ha) With fertilizer & manure 4.90 4.96 5.02 With fertilizer (20KgN/ha, 5kgP/ha) 4.65 4.36 4.40 Without fertilizer 4.15 3.68 4.02 Which Land Management Practices are Sustainable? 57. We evaluated the trend of crop yield over the 30 year simulation period, taking estimated rainfall and temperature into account, to determine sustainability of the land management practices considered in this study. As discussed in the introduction, SLM has a broad definition but we narrowly define it in this case using crop yield trend over the 30 year period used. A land management practice is not sustainable if it leads to a downward yield trend and is sustainable if the yield trend is constant or is increasing over the long-term. We used the average yield of the last 10 years and first 10 years of the 30-year simulation period to define sustainability as follows: S = Y2 ­ Y1 Where S = sustainability; Y2 = average yield in the last 10 years; Y1 = average yield in the first 10 years 58. Land management is sustainable if S0 and land management is not sustainable if S<0. Consistent with Tittonell, et al., (2008) and Vanlauwe and Giller (2006), Figure 8 shows that for maize and rice, land management practices that combine crop residues and organic and mineral fertilizers are more sustainable than those which use either one the three alone. For cassava all land management practices are not sustainable. This could be due to the poor calibration of the EPIC simulation model, which predicted lower yield than farmers' yields. However, since sustainability is determined using the first difference, the calibration error is netted out and may not have a significant impact on the yield trend. The major reason for the downward yield trend for cassava could be the poor response of cassava yield to fertilizer and other inputs. We observe a similar pattern for millet, where only plots receiving 80kgN/ha, 5 tons/ha of manure and 100 percent crop residues show an upward yield trend. Millet varieties with poor response to fertilizer could have contributed to the downward trend for land management practices combining organic and inorganic fertilizer and crop residues at lower rates. 47 59. All land management practices for cowpea are sustainable, highlighting the significance of nitrogen fixation that leaves considerable soil nitrogen even when all crop residues are harvested. 60. Overall, the results suggest that land management practices that combine organic and inorganic fertilizers and crop residues are more sustainable than those which use either one of them alone. Figure 1: Sustainability of land management practices, 30-year trend 3.0 (a) Yield difference: last 10 yrs first 10 yrs (c) Cassava yield difference: 2.5 first 10 years last 10 years Rice 0 2.0 Crop residue 20kgN/ha, 20kgN/ha, Yield difference (tons/ha) 100% 5kgP/ha, 100% 5kgP/ha, 1.67 Maize 1.5 0.2 crop residues tons manure, 100% crop residues 1.0 0.4 Difference (tons/ha) 0.5 0.0 0.6 50% crop residue, 1.7 tons/ha 40kgN/ha, 1.7 tons/ha manure, 100% crop residue 50% crop residue 80kgN/ha, 100% residue 80kgN/ha, 5 tons/ha manure All zero 0.5 0.8 50% crop residue 1.0 manure 1.5 1 1.2 (d) Cowpea yield difference: (b) Millet yield difference: last 10 years first 10 years last 10 years first 10 years 0.3 0.8 0.3 Difference (tons/ha) 0.6 0.2 0.4 0.2 difference (tons/ha) 0.2 0.1 0.0 0.2 0.1 0.4 0.0 0.6 100% crop 50% crop 0% crop residues residues residues 0.8 Niger Cross River 1.0 48 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Completed CDD type projects in Nigeria Project Total Credits + Grants Closing date Coverage Community-based Poverty $60 million + $20 million Dec 2008 Abia, Cross River, Ekiti, Kebbi, Reduction Project (CPRP) Kogi Yobe, Kwara and Ebonyi + Zamfara, Gombe, Edo, and Osun ­ supported by AfDB Local Empowerment and $70 million + ($8 million Jun 2009 Adamawa, Bayelsa, Bauchi, Benue, Environmental GEF) Katsina, Imo, Oyo, Niger, and Enugu Management Project (LEEMP) Second National Fadama $100 million in 18 States Dec 2009 Adamawa, Bauchi, Gombe, Imo, Development Project + ($10 million GEF in 6 (closed earlier Kaduna, Kebbi, Lagos, Niger, Ogun (FADAMA II) of these states) as 87% has been Oyo, Taraba and FCT + Borno, disbursed as of Plateau, Katsina, Kogi, Kwara and Dec 2007) Jigawa supported by AfDB. 49 Current IDA Credits and GEF Grants IDA GEF PROJECT CLOSING Commitment Grant ID PROJECT NAME DATE (US$M) (US$M) Local Empowerment and Environmental Management P071817 Project FY10 8 P097692 National Energy Development Project GEF MSP FY11 1 Avian Influenza Control and Human Pandemic P100122 Preparedness and Response Project for Nigeria FY11 50 Second National Fadama Development Critical P073686 Ecosystem Management Project FY12 10.03 Third National Fadama Development Project (Fadama P096572 III) FY14 250 P096648 Commercial Agriculture Development FY15 150 P072644 Rural Access and Mobility Project (RAMP) FY15 60 Proposed IDA Credits PROJECT Proposed ID PROJECT NAME IDA (US$M) P095003 Rural Access and Mobility Project (RAMP) Phase 2 100 P118760 Agricultural Productivity and Competitiveness Integrated Animal and Human Health Management P118854 Project West Africa Agricultural Productivity Program APL P117148 Phase 2 50 Annex 3: Results Framework and Monitoring NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Note: Includes only those incremental results for which the GEF incremental support is accountable, given that its implementation hinges upon already established and functioning implementation structures. Development and Global Indicators Use of Monitoring Information Environment Objective To improve the enabling 1. Stakeholder perception of the enabling To assess improvements or deterioration in the environment for scaling up environment for sustainable land management.* enabling conditions for driving adoption of sustainable land management sustainable land management (SLM) in participating communities 2. Direct project beneficiaries. (institutional capacities, policy, knowledge). To assess the capacity of stakeholders to reduce the threat of land degradation and climate risk via SLM practice. Intermediate Outcomes Indicators Use of Monitoring Information Component A: Capacity Building, Communication and Information Support 1. Improved participation of 1. Participating communities that have selected 1. Confirms community interest in self- communities in management SLM sub-projects for inclusion in their Local managing the use of their natural of natural resources. Development Plans (LDPs). resources. 2. Improved capacity of 2A. Community Associations reached through 2. Helps target information and training stakeholders to advise on or training and/or communications on SLM efforts. implement SLM. practice/planning 2B. People reached through training and/or communications on SLM practice/planning 3. Strengthened capacity of participating Local 3. Local Government Areas trained in rural land 3. Informs local investment prioritization and Government Areas for use planning. resource use decisions. participatory planning. 4. State governments participating in development 4. Measures the ability of Government to 4. Improved capacity of Federal of Nigeria's multi-sector SLM Investment convene knowledge and stakeholders to and State institutions to Framework. improve investment programming and coordinate on rural land and resource use decisions related to rural land water management across productivity and climate resilience. sectors. Component B: Monitoring, Evaluation and Knowledge 1. Knowledge on SLM is 1. Improved monitoring tools developed to track Informs knowledge on drivers and rate of increasingly accessible to adoption of SLM practices and changes in land adoption of SLM practices and the impacts on stakeholders. productivity. land resources. 2. Key stakeholders trained in applying the To assess progress on consolidating fragmented monitoring tools. knowledge on climate-smart soil and water conservation. 3. SLM Information System developed 51 Results Monitoring Arrangements Indicators Baseline Target Values Data Collection and Reporting Value Dec 2010 Dec 2011 Dec 2012 Dec 2013 Frequency Data Collection Responsibility for of Instruments Data Collection reporting Development and Global Environment Objective To improve the enabling Stakeholder perception of the Score: Score: Score: Score: Score: Annually Tracking NFCO M&E environment for scaling enabling environment for 0.323* 0.323 0.400 0.500 0.600 survey of specialist, with up sustainable land sustainable land management.* experts and SFCO M&E management in actors specialists participating communities (Note: reported as an increase (i.e., in score** on tracking survey: Composite Composite Index for the Index for the Enabling Environment for Enabling Sustainable Land Management) Environment for SLM) Direct project beneficiaries** 0 25,900 77,700 155,400 259,000 Annually Administrative NFCO M&E (% female) (cumulative) (% female) (% female) (% female) (% female) (% female) Records specialist, with SFCO M&E specialists Component A: Capacity Building, Communication and Information Support 1. Improved participation Participating communities that 0 1% 3% 6% 10% Annually Administrative SFCO/M&E of communities in the have selected SLM sub- Records specialists management of natural projects for inclusion in their (= 74 (= 222 (= 444 (= 740 resources. Local Development Plans FCAs) FCAs) FCAs) FCAs) NFCO (LDPs) (cumulative % of aggregates communities) (Note: avg of 350 people in each FCA. Total of 7400 Community Associations participating in Fadama III.) 52 Indicators Baseline Target Values Data Collection and Reporting Value Dec 2010 Dec 2011 Dec 2012 Dec 2013 Frequency Data Collection Responsibility for of Instruments Data Collection reporting 2. Improved capacity of Community Associations 0 200 5000 2200 0 Annually Administrative SFCO/M&E stakeholders to advise reached through training and/or Records specialists on or implement SLM communications on SLM practice/planning (# per year): NFCO aggregates People reached through Annually Administrative SFCO/M&E training and/or communications Records specialists on SLM practice/planning (# per year): NFCO a) Community facilitators a) 0 a) 80 a) 2000 a) 420 a) 0 aggregates (total 2500) b) 0 b) 37 b) 370 b) 370 b) 37 b) Extension & advisory staff c) 0 c) 50 c) 250 c) 250 c) 150 c) Local govt staff d) 0 d) 50 d) 250 d) 150 d) 50 d) State govt staff e) 0 e) 50 e) 50 e) 50 e) 50 e) Federal govt staff 3. Strengthened capacity Local Government Areas 0 0 20 40 62 Annually Administrative SFCO/M&E of participating Local trained in rural land use Records specialists Government Areas for planning (cumulative #). participatory planning. NFCO aggregates 4. Improved capacity of State governments participating Terms of Cross River 5 total 10 total 20 total Annually Administrative NFCO/M&E Federal and State in development of Nigeria's Reference State + states + states + states + Records specialist, with institutions to multi-sector SLM Investment approved federal federal federal federal National SLM coordinate on rural land Framework (cumulative # of by govt govt govt govt Committee and water management State governments) Governmen across sectors t's National SLM Committee 53 Indicators Baseline Target Values Data Collection and Reporting Value Dec 2010 Dec 2011 Dec 2012 Dec 2013 Frequency Data Collection Responsibility for of Instruments Data Collection reporting Component B: Monitoring, Evaluation and Knowledge 1. Knowledge on SLM is Improved monitoring tools 0 0 2 0 0 Annually Administrative NFCO/M&E increasingly accessible to developed to track adoption of Records specialist stakeholders. SLM practices and changes in land productivity (# tools) Key stakeholders trained in 0 0 25 25 25 Annually Administrative NFCO/M&E applying the monitoring tools Records specialist (# per year) SLM Information System No (does No (under Yes Yes Yes Annually Administrative NFCO/M&E developed (yes/no) not exist) developme Records specialist nt) * Note: These scores break down into the following categories: Less than 0.10: The enabling environment in aggregate undermines scaling up of SLM. 0.10 - 0.49: The enabling environment in aggregate does not adequately support scaling up of SLM. 0.50 ­ 0.69: The enabling environment in aggregate fairly supports scaling up of SLM. 0.70 ­ 1.00: The enabling environment in aggregate strongly supports scaling up of SLM. * * Note: The # of direct project beneficiaries is calculated as follows: An average of 350 people in each FCA, and a total of 740 Community Associations are estimated to adopt SLM practices through outreach efforts under the incremental GEF support to the baseline Fadama III operation. 350(740) = 259,000. 54 Annex 4: Detailed Project Description NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Project Approach and Scope 1. Scaling Up SLM Practice, Knowledge and Coordination is a three-and-a-half-year incremental GEF grant of $6.8 million to the Federal Republic of Nigeria focused on mainstreaming sustainable land management (SLM) in an existing nation-wide rural development flagship program, the Third National Fadama Development Project (Fadama III -- referred to here as the baseline project). The GEF incremental grant will be fully integrated into it. 2. Fadama III is a Specific Investment Loan (SIL) designed to assist the Government in increasing rural income and reducing poverty in rural areas. The baseline project became effective in March 2009 and has a closing date of December 2013. The baseline project is of national scope and will thus operate in all 36 Nigerian States and the Federal Capital Territory (FCT). It builds on previous community development initiatives covering a limited number of States. Fadama III is $450 million, financed by $250 million IDA and the rest covered by counterpart financing. Of this $450 million, $99.1 million is considered direct co-financing for the purposes of the GEF incremental grant. 3. The Fadama series has evolved over the years into a large-scale national community- driven rural development program different from the predecessor operations, which focused on floodplain agriculture in a limited number of States. The project directly reaches 2.2 million households, or 12 million individuals, with a proven government-led implementation mechanism with nationwide reach and credibility. The operation is an important opportunity for mainstreaming SLM to secure long-term sector goals. The existing Fadama III operation aims to increase the incomes of users of rural land and water resources through demand-driven investment and empowerment of local community groups to improve productivity. Fadama III has six components: (i) capacity building, communications and information support, (ii) small- scale community infrastructure, (iii) advisory services and inputs, (iv) extension services (ADPs), research and on-farm demonstrations, (v5) asset acquisition for economic interest groups (EIGs), (vi) Project management and M&E. The Fadama III PAD explicitly notes that SLM is part of the overall Project strategy. It further notes that this incremental GEF grant will be fully integrated to help support the work on SLM. 4. The GEF grant described below provides incremental support to Fadama III components and 1 and 6 to improve the enabling environment for up scaling climate-smart SLM, particularly: knowledge fertilization, environmental and institutional monitoring tools, institutional capacity building at federal, state and local levels, and outreach and advocacy on SLM practice and policy. This incremental support will help Nigeria upscale improved land and water management, and set the stage for expanding SLM practice beyond the life of the Project, especially as current climate variability will likely affect Project and sector aspirations. 5. However, GEF financed activities implemented at the state level will not cover all 36 States of Nigeria. Instead, GEF support will focus only on those 30 States plus the FCT that do 55 not yet have institutional structures for cross-sectoral coordination and rural land use planning in place. In the six other States (Imo, Kebbi, Kwara, Kogi, Ogun, and Bauchi), state-level watershed committees, which also serve as sub-committees to the National SLM Committee, have already been established. Consequently, these six States are excluded from additional GEF investments in an effort to avoid duplication of existing external funding support related to capacity building for mainstreaming of SLM at State level. Basis for selection of activities financed by GEF 6. The project activities funded by the GEF incremental grant have been collaboratively designed to assist the Government in improving the enabling environment for SLM and mainstreaming SLM practice in rural development. The GEF incremental grant specifically aims at: Facilitating the establishment of a community of practice on SLM, supported by awareness raising, capacity building, knowledge and M&E services, and consistent with local development planning processes (Incremental funding for Components 1 and 6). Strengthening institutions charged with management of land resources, at Federal, State, and local government level, including by reinforcing Nigeria's cross-sectoral coordination platform for investment and policy on land use and management (Incremental funding for Components 1 and 6). 7. Through this work the Project aims to support the higher level goal of securing the productivity and climate resilience of Nigeria's land, water, and forest resources that underpin rural and agricultural development. Beneficiaries 8. The primary beneficiaries of the GEF incremental grant are rural community groups25 exposed to the socio-economic and environmental impacts of land degradation and climate variability. In the baseline Fadama III project, which the GEF supports, an estimated 2.2 million rural poor households will potentially benefit from improved management of land resources, resulting in enhanced land productivity, income generation, and global and local environmental benefits. Secondary beneficiaries include public and private practitioners at Federal, State, and local government levels that enable SLM up-scaling. Project Components 9. The GEF support is fully integrated into Fadama III and reinforces its existing components 1 and 6. Each component is incremental to the respective Fadama III component. The text below describes the GEF incremental support only. For more details on the components of the existing baseline Fadama III Project, see annex 17 below and/or the approved PAD for Fadama III. 10. There are two components in the GEF project: 25 Communities are organized in economic interest groups (EIGs), which together form registered Community Associations -- an apex organization that represent the collective interests of the EIGs. 56 Component A: Capacity Building, Communications and Information Support (US$6.00m GEF, integrated into Component 1 of Fadama III) Component B: Monitoring, Evaluation, and Knowledge (US$0.80m financed by GEF, integrated into Component 6 of Fadama III) GEF Component A: Capacity Building, Communications and Information Support (US$6.00m GEF, integrated into baseline Component 1) 11. Background: The existing Component 1 of Fadama III is building the underlying capacity at federal, state, and local government levels to support innovations in local development planning and provide the support structures for delivery of community demand-driven investments in rural development. Communities are mobilized to form viable Economic Interest Groups (EIGs) that are organized into a network of registered Community Associations nationwide. Communications and training programs will empower communities to prepare Local Development Plans (LDPs). Capacities of Local Governments and other stakeholders such as advisory service providers will be strengthened to better respond to the needs of their communities and to improve decision-making, local development planning, and governance. 12. Incremental GEF funding will support the following activities: (A1) Capacity Building Support for Community Organizations for Local Development Planning (US$1.29m GEF) 13. The objective of incremental funding to this sub-component is to strengthen local development processes towards a more holistic view of rural development, including consideration of land degradation threats and climate risks. The aim is to increasingly mainstream SLM approaches and technologies in the implementation of Local Development Plans, specifically in prioritized investments in agricultural production systems in order support communities to control land degradation and adapt to climate change. To achieve this, capacity and awareness on SLM technologies will be built at all levels of the facilitation structure that supports delivery of community driven rural development. Capacity building activities will target a wide spectrum of stakeholders, including policy makers at national level, technical staff at State level, development planners and project facilitators at local government level, national extension services (ADPs), and land users organized in EIGs and Community Associations. 14. More specifically, incremental support will be provided to develop a detailed SLM training program and production of training material, customized for the specific awareness and capacity building needs of the different stakeholder groups described above. GEF will finance the competitive recruitment of six SLM trainers at zonal level for the delivery of the SLM training sessions, including production and dissemination of training material. GEF-financed SLM trainers will complement training and capacity building personnel provided for under the baseline project. The cost of organizing and facilitating training for the wide audience of stakeholders to be trained will be covered by co-financing from the baseline Fadama III project. GEF resources will thus cost-effectively dovetail with the planned capacity building program under the baseline project. 15. Incremental GEF funding to install six SLM trainers at zonal level follows a "train-the- trainers" model to deliver the various capacity building activities within the planned baseline 57 Project's training program. These trainers will work with a broad audience including: State Project Environment Officers and Local Project Desk Officers seconded to the project, ADP's public subject matter specialists and extension officers, as well as community facilitators employed under the baseline project to engage with communities on SLM. The training will focus on supporting the operationalization of community sub-project investments under the existing matching grant facilities of Fadama III. Guidelines will be developed and disseminated as a tool for embedding and consolidating SLM practice into planned investments in agricultural production systems prioritized in LDPs. Community facilitators, extension services, service providers, and local government desk officers will then be better capacitated to boost understanding and knowledge within EIGs on the multiple benefits of SLM, including climate adaptation benefits. Community facilitators and LGA desk officers will further play a critical role in mobilizing communities to integrate SLM and climate risk considerations into prioritized land production investment as identified in LDPs. Transferring knowledge on promising SLM technologies to local community groups will empower them to better secure livelihoods, manage lands more sustainably, and adapt better to the risks of climate change and variability. 16. The six zonal SLM Trainers will further serve as knowledge resource persons to service stakeholders at both State and local government levels in responding to the SLM information and knowledge needs of their constituencies. 17. Specific activities that will be financed include: (A1.1) Development of a SLM training program on land, water, and forest resources: The training program will be structured according to the different target groups: (i) Capacity building activities for policy makers and supporting technical staff at national and state level will focus on land related policies and necessary reforms as well as cross sectoral investment planning. Corresponding training of state level officials will be grouped according to agro-ecological zones; (ii) Capacity building for State Environment Officers (37), Community Facilitators (approximately 2500), Local Desk Officers (approximately 1500), and Subject Matter Specialists and extension officers (approximately 800) will focus on technical understanding of SLM practices (see table 1 below) and their economic and environmental returns over different timeframes, applicability of specific practices in the different agro-climatic conditions, climate change adaptation potential of different technologies, etc. Capacity building will further include operational aspects of adopting different SLM practices at the farm level. Consideration will be given to include farmer-to-farmer exchanges as part of the training program, as some practices, such as incorporating Gliricidia and Leucaena trees into farming systems, have been successfully adopted in one part of Nigeria but not in another. A number of traditional practices are extremely beneficial and should not be abandoned. (A1.2) Development of SLM training material: Training material will be developed to support the capacity building activities outlined above. Training material will be customized to the needs of the different target audiences: Policy briefs and general SLM reference material will be developed for national and state level capacity building. SLM technology handbooks will be developed for Community Facilitators, National Extension Service staff, as well as community-level audiences. SLM technology handbooks will provide detailed profiles on each SLM technology and will be organized according to the three major agro-ecological zones (see Annex 1, and also Annex 4 para 17 for table of 58 eligible SLM practices). All training material will build on extensive knowledge and publications available in the country and globally (e.g. through the TerrAfrica Knowledge Base), as well as country-specific analytical work that is currently sponsored by the World Bank as a contribution to the TerrAfrica platform (e.g. Nigeria case studies of SLM approaches to mitigate and reduce vulnerability to climate change in SSA (IFPRI, ICRAF, ICRISAT); Key institutional, financing, and economic elements for scaling up SLM in Mali and Nigeria (IFPRI, ICRISAT), which includes a review of land management costs, benefits, and public expenditures in Cross River, Sokoto and Niger States). (A1.3) Training of trainers program: Six competitively selected SLM trainers will be contracted as consultancies to lead capacity building efforts for SLM in the six different project zones. They will deliver a series of capacity building and learning events specific to SLM practices and technologies and serve as SLM knowledge focal points in each of the project zones. The main purpose of the six SLM trainers will be to transfer knowledge on viable SLM investments to key stakeholders in the CDD-sub-project cycle, in particular: Community Facilitators and extension officers working at the community level, as well as Local Desk Officers, and State Environment Offices at LGA and State level, respectively. Facilitation represents an important element for overall project success and sustainability of community-selected activities and investments in a CDD project. As such, the baseline project is employing approximately 2500 Community Facilitators, which together with approximately 800 public extension officers employed under the ADP, will facilitate and guide the CDD sub-project process. The facilitation process is sequenced in: community mobilization; participatory community needs assessments; consequent development of investment activities that are presented, prioritized, and budgeted in Local Development Plans (LDPs), and subsequently, development of detailed sub-project proposals for each of the investment priorities eligible for funding support under the Project. 59 Table 1. SLM practices promoted in the Project Returns accrue in short term Returns accrue in long term Returns accrue in med term Agro ecology Possible climate Possible environmental SLM related activity Forest adaptation benefit benefit Sudan/Sahel Savannah 1 Orchards Forest Livelihoods diversification Reduces pressure for agricultural Sudan/Sahel land conversions, more biomass, Savannah reduced erosion, agro-biodiversity 2 Vegetative barrier / live Forest Income and livelihoods Increased soil fertility, reduced fencing (border hedges Sudan/Sahel diversification erosion, more biomass, carbon, or trees, etc.) Savannah greater land productivity 3 Traditional/updated Forest Income and livelihoods Increased soil fertility, more mixed cropping Sudan/Sahel diversification biomass, carbon, greater land systems Savannah productivity, rainfall infiltration 4 Planting pits Sudan/Sahel Soil moisture retention Soil fertility, soil carbon, reduced (sometimes called zai Savannah erosion or tassa) 5 Woodlots Forest Alternate source of fuel and Reduces deforestation and forest Sudan/Sahel building materials degradation, carbon sink retained Savannah 6 Nursery establishment Forest Alternate source of seed, fuel, Reduces deforestation and forest Sudan/Sahel fodder, and building materials degradation, carbon sink retained Savannah 7 Mulch Forest Soil moisture and retention, Increased soil fertility, soil carbon, production/application Sudan/Sahel livelihoods water infiltration Savannah 8 Compost Forest Soil moisture, livelihoods Increased soil fertility, soil carbon, production/application Sudan/Sahel water infiltration Savannah 9 Physical soil/water Forest Soil retention and fertility, water Reduced soil loss and siltation, conservation measures: Sudan/Sahel availability and infiltration more biomass, more carbon, soil and stone bunds, Savannah greater water infiltration, greater trash lines, bench land productivity terraces, grass strips or other vegetative barriers and live fencing, low- till, small dams, planting pits, ridging, ridge tying, furrow, improved fallowing) 10 Flood control measures Forest Reduced flooding threat from Reduced soil loss and siltation Sudan/Sahel more intense rainfall Savannah 60 12 Stock routes and/or Sudan/Sahel Improved access to watering Reduced pressure on land, reduced rotations Savannah points and pasture deforestation 13 Grazing reserves and/or Sudan/Sahel Improved access to watering Reduced pressure on land, reduced rotations Savannah points and pasture deforestation, reduced range to crop conversions 14 Common watering Sudan/Sahel Greater resiliency of stock to Reduced trampling of crops and points on rangeland Savannah drought conflict over natural resources, (micro dams, tube reduced trampling of pasture wells, but no boreholes vegetation without impact analysis on water table) 15 Small earth dam Sudan/Sahel Greater access to water for More biomass and soil carbon Savannah agriculture, improved soil moisture 16 Agroforestry: Gmelina Forest Income and livelihoods Increased soil fertility, reduced arborea Sudan/Sahel diversification, wood, fuel, erosion, more biomass, carbon, Savannah additional fodder land productivity, rainfall infiltration 17 Agroforestry: Leucaena Forest Income and livelihoods Increased soil fertility, reduced Savannah diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration 18 Agroforestry: Gliricidia Sudan/Sahel Drought tolerance, income and Increased soil fertility, reduced Savannah livelihoods diversification, wood, erosion, more biomass, carbon, fuel, additional fodder, land productivity, rainfall medicines, land reclamation infiltration 19 Agroforestry: Irvingia Forest Income and livelihoods Increased soil fertility, reduced gabonensis Savannah diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration 20 Agroforestry: Treculia Forest Income and livelihoods Increased soil fertility, reduced africana Savannah diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration 21 Agroforestry: Acacia Sudan/Sahel Income and livelihoods Increased soil fertility, reduced albida diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration 22 Agroforestry: Acacia Sudan/Sahel Income and livelihoods Increased soil fertility, reduced senegal diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration 23 Agroforestry: Neem Forest Income and livelihoods Increased soil fertility, reduced Sudan/Sahel diversification, wood, fuel, erosion, more biomass, carbon, Savannah additional fodder land productivity, rainfall infiltration 24 Agroforestry: Forest Income and livelihoods Increased soil fertility, reduced Eucalyptus Sudan/Sahel diversification, wood, fuel, erosion, more biomass, carbon, Savannah additional fodder land productivity, rainfall infiltration 25 Agroforestry: Bamboo Forest Income and livelihoods Increased soil fertility, reduced Sudan/Sahel diversification, wood, fuel, erosion, more biomass, carbon, Savannah additional fodder land productivity, rainfall infiltration 61 26 Agroforestry: Jatropha Sudan/Sahel Income and livelihoods Increased soil fertility, reduced diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration 27 Agroforestry: Tectona Forest Income and livelihoods Increased soil fertility, reduced grandis Savannah diversification, wood, fuel, erosion, more biomass, carbon, additional fodder land productivity, rainfall infiltration (A2) Capacity Building for Local Governments for Rural Land Use Planning (US$1.51m GEF) 18. The objective of incremental funding to this sub-component is to build capacity of local governments to carry out rural land use planning that balances the need for maximization of productivity and long-term sustainability of land, water and forest resources. Due to the limited GEF funding envelope, 62 local governments (2 per State for all eligible 30 States plus FCT) among the existing participating LGAs will be selected based on agreed criteria (i.e. readiness, level of land degradation threats, etc.). These criteria will be decided jointly by the SFCO and NFCO (including Zonal Coordinators).Few, if any, LGAs are currently engaged in rural land use planning or natural asset mapping. Incremental funding will provide for the underlying capacity building support to LGAs, for carrying out consultative spatial planning, and for a small package of geographic information system equipment. Ideally, existing local knowledge on land capability and ecosystem resilience to climate variability will inform the development of rural use plans. 19. Specific activities that will be financed include: (A2.1) LGA capacity building: Six training workshops on rural land use planning will be carried out at the zonal level and will involve at least 2 participants (in particular Development Planners, Land Officers and Surveyors) of the 62 selected LGAs. Capacity building of LGA staff will focus on community-based land use planning, mapping and ground-truthing, as well as more effective involvement of Land Allocation Advisory Committees in land use planning. (A2.2) LGA rural land use planning support package: Each of the 62 participating LGAs will be supported with a small equipment package to strengthen institutional capacity for rural land use planning including natural resource asset mapping (data transformation image analysis, etc.). (A2.3) Development of rural land use plans: Each of the 62 participating LGAs will be supported with the development of rural land use plans. Activities feeding into the development of rural land use plans will include: i) consultations with local community authorities (local councils) to define a common vision on land use profiles and key trends in local land and natural resource assets, ii) participatory appraisal of draft land use maps including zoning profiles for specific resource systems, such as forest areas, grazing reserves, key watersheds, agricultural land, protected areas, waste lands, etc., iii) GIS application including data transformation and image analysis at the level of the LGA, iv) follow-up and monitoring activities for updates of rural land use plans. 62 (A3) Communications and Outreach ($0.81m GEF) 20. The objective of incremental funding to this sub-component is to heighten awareness of stakeholders at all levels on SLM as a pragmatic way increase land quality and productivity, control land degradation, and reduce climate change risks. These stakeholders include those active in Fadama III implementation including extension and advisory service providers, community facilitators and groups, Local Governments, etc. The communication activities, in tandem with capacity building activities described above, will play an important role to mobilize and incentivize land users to invest in sub-projects for sustainable land and water management under the existing demand-driven matching grant facility. Incremental funding will support mainstreaming of SLM practice in the overall sensitization campaign to be delivered under the baseline project. SLM communication and training modules will be developed and integrated into the communication and training programs of Fadama III. The communication modules will target land users, local authorities, and the general public via media such as radio and TV, newspapers and other print media, etc. The Project will finance development, production, and dissemination of the SLM related communication and information material, some of which will need to be adapted to the specific characteristics of the different agro-ecological zones of Nigeria as well as the specific needs of the different States. 21. Specific activities that will be financed include: (A3.1) A national awareness seminar targeting policy makers will be held to raise awareness of key land degradation threats and climate change risks in the different agro- ecological zones of Nigeria, and build a common understanding on the important opportunities of SLM for securing agricultural productivity, food security, as well as climate and other environmental benefits. The workshop will be initiated through the SLM Steering Committee and will review land-related policies to identify a strategic reforms were necessary. The seminar will provide a high profile venue for the FGN to continue to strengthen cross-sectoral coalition building. (A3.2) A National communication strategy for SLM will be developed including a detailed annual program of communication activities that are aligned with other communication events and efforts carried out under the baseline project. The Communication Strategy will be presented to the National Fadama Technical Committee as well as the National SLM Committee for review and approval. It will be updated at midterm review and before project completion. The Communication Activity Program, which represents the operational part of the National SLM Communication Strategy, will be updated annually. All updates to the Communication Package will be presented to the National SLM Committee for review and validation. As a key part of the communication package, a set of ready-to-use communication messages will be developed. These will be of different length, thematic depth, etc. in order to meet the needs of different target audiences and the specifics of different communication media (print, audio, visual, multi- media, etc.). The resulting communication toolbox will serve to create a harmonized message on SLM nationwide and will form the basis for locally adapted communication activities at the State level. 63 (A3.3) A set of communication and broadcasting material (Posters, flyers, good practice manuals, radio and TV features etc.) will be produced. To the extent possible communication material will be developed for national distribution. However, a share of the communication budget will be channeled to the State level to enable locally appropriate customization of communication material, i.e. a focus on locally relevant land degradation threats and locally adapted response strategies that take into account local production systems, social factors, etc. (A4) National and State Coordination on Land and Water Management (US$0.48m GEF) 22. The objective of this fully GEF funded subcomponent is to increase the effectiveness, capability, transparency, accountability, and responsiveness of government and other stakeholders to convene evidence and knowledge and improve investment programming on climate-smart land and water management, and help mainstream SLM practice and policy into State and National development planning. To guide this process, the Federal Government established the multi-sector National SLM Committee, chaired by FMARD (see Annex 16 for details). This sub-component includes a suite of activities that build on the government's on- going actions to develop a "public sphere," including the public sector, media, civil society, academia, and producer and community associations. This approach can lead to a change in the way that projects and programs are selected, designed and deliberated. It advocates for greater participation, transparency and accountability. This is seen as a major vehicle for scaling up SLM practices such as low tillage, agroforestry, grazing rotation and reserves, erosion control, rural land use planning including watershed planning, natural asset mapping, forest protection, and small irrigation in order to improve development outcomes. 23. More specifically, this sub-component will strengthen and equip the National SLM Committee to continue developing and implementing its emerging SLM Investment Framework. This activity will form part of the country's CAADP investment program, and is in line with the President's 7 Point Agenda, NEEDS, SEEDS, sector strategies, and the TerrAfrica partnership under which support has already been provided. The SLM Investment Framework is a suite of prioritized on-going, pipeline, and future investments, and is accompanied by other institutional support such as a knowledge and information systems26, M&E tools, and associated institutional development at State and Federal levels. This effort is already embedded into the national policy dialogue. The SLM Investment Framework allows the country to articulate a more focused investment agenda on cross-cutting land issues including agricultural productivity, climate change, watershed management, and forest. 24. Support will also be provided to continue sensitization among state governments and other actors with the aim of expanding the alliance and advancing evidence-based investment decisions and policy-oriented dialogues to address land degradation and climate risk threats. So far the national SLM Committee has met with governments, academia and other stakeholders in all 36 States to build the national alliance on land and identify initial priorities. 25. Incremental financing will further help to advance the analytical discussion related to rural land use and land use change by convening national experts, supporting national learning events and capacity building programs related to land use and watershed planning, quantitative 26 See more details for this activity funded under Component B. 64 methods to assess benefits from sustainable land management (cost-benefit, modeling, etc.), climate risk management, etc. 26. Specific activities that will be financed include: (A4.1) Coalition Building: At the national level, incremental funding will support the on- going process of coalition building and networking for improving investment programming on SLM and mainstreaming this into the national policy and investment planning process as per detailed work program of the National SLM Committee. This will include: (i) sponsoring of cross-state learning and communications events aimed to strengthen partnership and implementation among research, extension, producer organizations, media, NGOs, project teams, and the state and national SLM committees, (ii) policy workshops under the lead of the National SLM Committee, (iii) capacity building of representatives on the National SLM Committee, as well as selected SLM focal points in government and non-government entities, (iv) back-stopping technical support for development and nurturing of State-level SLM Committees, (v) operational support to track progress on the overall implementation of activities led by the state-level SLM committees. At the State level, support will be provided for technical assistance and incremental operating cost related to establishment of State-level SLM Committees in 30 States that do not yet have cross-sectoral committees in place. This will complement six existing watershed committees that can also function as SLM committees in the remaining 6 States. Incremental operating cost will cover advocacy and communication activities in support of mainstreaming SLM in policy and decision making and fostering inter-sectoral collaboration initiatives. (A4.2) Knowledge Management and Information Support: A comprehensive Nigeria SLM Information System is planned. This will have three elements: (i) a National SLM gateway website for practitioners and policymakers, (ii) a Technical SLM Knowledge Base, and (iii) a mapping function for visualizing spatial data. The first element, the development of a National SLM website, will be financially supported under this sub- component (the Technical SLM Knowledge Base and mapping function will be supported under Component B). The National SLM website will be a gateway to information related to land, agriculture, forest, water, and climate in Nigeria, as part of the effort to strengthen an emerging community of practitioners around sustainable land use and management. Elements will include stories on land related Project and non- project activities, events and updates from the national SLM investment platform and associated State level platforms/committees, news, simple interactive maps (i.e., simplified GIS), a contacts function, featured high profile analytical and diagnostic work, and reporting on a small set of shared national key program-level M&E indicators for the investment platform. The SLM website will be integrated with the second element of the SLM Information System, the Technical Knowledge Base, which focuses primarily on dissemination among practitioners of a wide array analytics, diagnostics, detailed maps, and experiences on land use and management (funded under Project Component B). Training for website development and maintenance as well as data management and overall maintenance will be provided to technical and secretarial staff involved in the 65 National SLM Committee, as well as key stakeholders active in the national coalition. Training will ensure that the knowledge management and information support systems are adequately maintained and updated over time, and used to improve investment programming inside and outside the Project. (A4.3) Investment Alignment and Institutional Capacity: This Project will financially support Nigeria as it continues to prepare a Strategic Investment Framework for SLM. Work has already begun in Cross River State. This national investment plan, owned by the FGN and participating States, will include a suite of costed investment priorities on SLM related to agriculture, forest, natural resources and climate change. Interventions will draw upon land management successes, including some supported via the Fadama operation. The Investment Framework is being developed through a phased process that will gradually bring in more stakeholders and States around one shared investment and policy dialogue on improving land productivity and reducing climate risks. Development of the Investment Framework includes: (i) Technical assistance with diagnostics and stocktaking exercises to provide quality information for SLM investment prioritization, (ii) A deeply collaborative process of priority setting in terms of thematic, geographic, and operational investment needs, (iii) Consultation and validation workshops on the draft Investment Framework with a wider range of stakeholders at all levels, (iv) Finalization and dissemination of the Investment Framework, (v) Implementation (supported by other Project activities mentioned above including knowledge management, M&E tools, sensitization, coalition building, and institutional capacity development), and (vi) Periodic updating of the Investment Framework by Nigeria's emerging SLM coalition. To support the preparation process, the National SLM Committee will be supported with secretariat functions, technical advisory services, workshops and communications. (A5) Community SLM Award (US$1.91m GEF) 27. The Community SLM Award is a grant facility, funded entirely by the GEF, to reward existing participating communities that are successfully implementing community SLM sub- projects that have been financed under component 2 of the Fadama III operation, and which have community involvement and visible public goods. These sub-projects include grazing reserves, soil and water conservation, etc. (See Annex 1 or table 1 above in para 17 for the list). Each award comes in the form of an additional complementary SLM sub-project that a community then becomes eligible to implement, up to a value of $10,000 (with no counterpart funding required). A total of 185 communities will receive the award, five from each State and the FCT. The efforts of communities successfully implementing SLM sub-projects will be visibly recognized through this additional award by linking to the communications and outreach efforts. 28. Rationale. SLM activities are in the positive list of the Fadama III project and may be included by community groups as part of their Local Development Plans (LDPs). However, unless land degradation and climate risks are current and visible threats, choosing SLM activities is not always attractive to communities because the SLM activities do not always bring immediate income and can be perceived to generate mostly public goods. There are some incentives that will be put in place with GEF support to encourage adoption of SLM by communities, focusing on knowledge fertilization and capacity building. This could translate into 66 greater adoption of SLM practices or/and more SLM activities included into LDPs. The Community SLM Award adds to these incentives by helping consolidate practitioners at the local level and indentifying which interventions are working that could be scaled up. 29. Selection. Selection will be made in two stages. The first stage will be through nominations made by the community facilitators already in place under the Fadama III project, working with the Local Governments' existing Fadama desk officers. The facilitators and officers will nominate those community-level SLM sub-projects that are under good implementation according to existing sub-project standards and have good communal benefits. These projects must have been financed through the Fadama III project and must be eligible SLM activities (see Annex 4 para 17 for table of SLM activities). Criteria for selection are: The sub-project is clearly in the approved Local Development Plan. Community members are actively involved in the implementation of the sub-project (at least as members of Community Association or EIG). The sub-project is owned by the Community Association or EIG. The sub-project has transparent financial management (such as construction of notice board containing sub-project information). The activity can easily be replicated and has clear communal benefit, generating public goods. Community members are willing to share their experiences with neighboring communities and other project participants nationwide. 30. These nominations will then be passed on to the second stage. A Committee composed of three staff from the given SFCO plus a representative of the NFCO will select the final 5 SLM community sub-projects in each state from among the nominated SLM sub-projects forwarded by the facilitators and local government desk officers. This final selection will apply the same criteria as above. 31. Making and monitoring the award. An award ceremony will be held in each of the six Zones to recognize the efforts of these communities, and forge linkages on knowledge and practice across States, Local Governments, and land users. Each winner will be presented with a certificate and a promissory letter to fund additional an identified SLM activity up to $10,000. 32. Each award grant will fund an additional SLM sub-project identified by the communities, following the normal procedures under component 2 of Fadama III. A difference from the normal procedure is that counterpart payments will not be necessary as would normally be required. Subsequently, the implementation will be monitored by the SFCO as usual. 33. Specific activities to be financed include: (A5.1) Grant award facility for grants for up to $10,000 for each of five Community Association awards for each of 36 States plus the FCT (37 in total). The award is in the form of one additional 100% GEF financed SLM sub-project to be implemented under component 2 of the Fadama III baseline project. (A5.2) Awareness raising, TA and administration for the grant facility, including: (i) State, Zone, and Federal level showcasing of best community sub-projects, for 67 knowledge sharing and awareness raising purposes; (ii) communications and outreach, and (iii) facilitation and organization of the Community SLM Award. GEF Component B: Monitoring, Evaluation, and Knowledge (US$0.80m financed by GEF, integrated into baseline Component 6) 34. Background: Component 6 of the existing Fadama III project will finance the cost of project management and coordination, monitoring and impact evaluation, as well as the cost of screening and ensuring EMP compliance. 35. Incremental GEF funding will support the following activities (none include project administration, which is already fully covered by the baseline project): 36. The objective of incremental funding to this sub-component is to enhance the SLM dimensions of the M&E system and Management Information System (MIS) established under the baseline project. Incremental funding will cover development and application of indicators, tracking tools, an SLM knowledge base and capacity building and technical assistance for implementing them. 37. There is IDA financing in place for a baseline survey carried out in 2009. This survey will provide information on household/community perceptions of land quality and risk reduction measures, adoption rates of SLM practices, as well as other field-based data. Overall, local land users are participating in the monitoring process to ensure local ownership and understanding of socio-economic and environmental benefits. This baseline survey forms the start of a process of carrying out an impact evaluation on Fadama III. By funding the activities described below, the GEF incremental support will ensure that the impact evaluation includes analysis of the SLM dimensions of the integrated IDA and GEF support to Fadama III. 38. Limited incremental funding will further serve to strengthen technical expertise within the NFCO. Three staff positions within the NFCO technical support team are set to expire in 2011. In order to ensure adequate technical input, coordination support and M&E accountability beyond 2011, GEF will finance technical support to NFCO related to (i) GIS and land use mapping, (i) facilitation of SLM activities and technology guidance, and (iii) SLM M&E for the final two years of the project. (B1) Monitoring tools (US$0.66m GEF) 39. These monitoring tools will allow stakeholders within the project and also beyond the project to help the government measure overall land productivity trends as well as changes in the enabling environment important for scaling up climate-smart sustainable agriculture and integrated land and water management. This will strengthen and help sustain post-project impact. The NFCO has responsibility for these tools. 40. Specific activities to be financed include: (B1.1) Refining and implementing the Composite Index for the SLM Enabling Environment (CI). The CI is used for the key performance indicator that tracks progress toward the Project's development and global environment objective. It was developed 68 and applied during project preparation as a simple and low-cost perception based survey among experts on the extent to which the enabling conditions for SLM (institutions, financing, knowledge, etc) are improving or deteriorating. Because Fadama III has nationwide reach and is itself mainstreamed into Federal, State, and Local governments, this tool is applicable as an indicator for this project, as well as more generally to track Nigeria's capacities to implement SLM over time. Similar tools are successfully used in the health and education sectors but have not yet been translated and operationalized for agriculture and NRM. Definition The average score given to a national SLM effort by a defined group of knowledgeable individuals asked about progress in a number of individual elements, grouped into six major components. What it measures The CI allows monitoring of a set of key variables and results on the relative strength of governance and policy dimensions conducive to SLM mainstreaming and scale up. It is made up of six components: i) political support, ii) policy formulation such as land tenure, decentralization, and multi-sectoral planning, iii) organizational structure, iv) financial resources such as public expenditure trends, v) knowledge, monitoring and evaluation, and vi) legal and regulatory environment. How to measure it The CI uses key informants from a designated mix of institutions to give opinions about central areas of SLM, including political commitment, enabling environment and programming, compiling an index out of scores given in various areas. The CI can be used as a baseline, diagnostic and performance monitoring tool. In Fadama III it should be used annually. The values below were aggregated by State/FCT and theme, and then these aggregations were again aggregated to arrive at a total score for the Composite Index for the Enabling Environment for SLM. The scores break down into the following categories: Less than 0.10: The enabling environment in aggregate undermines scaling up of SLM. 0.10 - 0.49: The enabling environment in aggregate does not adequately support scaling up of SLM. 0.50 ­ 0.69: The enabling environment in aggregate fairly supports scaling up of SLM. 0.70 ­ 1.00: The enabling environment in aggregate strongly supports scaling up of SLM. The targets for the Composite Index are as follows. Baseline value Target values May 2010 Dec. 2010 Dec. 2011 Dec. 2012 Dec.2013 Score: 0.323 Score: 0.323 Score: 0.400 Score: 0.500 Score: 0.600 (B1.2) Develop a monitoring tool to track adoption rates of specific SLM practices. This indicator, "land area with SLM practices," will be tracked by this project to report on the Country Partnership Strategy II, baseline Fadama III operation, as well as the regional TerrAfrica SIP SLM umbrella that provides this GEF financing. Adoption rates and hectares affected can be estimated from the on-going comprehensive baseline household 69 survey being carried out for the Fadama III project, which will be repeated at mid-term and at project close. GEF incremental support will be provided to compile the baseline data (and follow-on surveys at mid-term and project close) to quantify adoption rates of SLM practices in the project area nationwide and estimate land area benefitting from the SLM practices identified table 1 in para 17 above. This indicator will be reported as a national aggregate of local and state level figures, broken down by: agro-ecological zone, type of SLM practice, community level and household level. The GEF support is focusing on improving the enabling environment and, as such, aims to influence adoption rates. Due to the fact that the investments in SLM on the ground are financed by IDA and counterparts, the GEF support cannot be held directly accountable for greater adoption rates. Instead of attributing greater adoption to the GEF support, the contribution from the GEF to greater adoption of SLM must be recognized and quantified to the extent possible. For this reason, the targets above will be tracked as a project activity to help determine what is working, where, why and how. This information will then be fed back into the nationwide knowledge base described below. That in turn will help solidify the merging national community of practice on integrated land and water management. This indicator will be reported as a national aggregate of local and state level figures, broken down by: agro-ecological zone, structural/vegetative activity, enterprise activity, community level and household level. (B1.3) A third monitoring tool will be developed to estimate the global and local environmental benefits from the SLM practices tracked above. The patterns in the adoption rates tracked using the tool described above will be used to quantify estimated global and local environmental benefits accruing from the improved land management practices. These estimates will be derived from co-efficient factors to be developed for each type of land management activity in each major agro-ecology. Co-efficients will be identified for environmental benefits such as carbon and nitrogen balances, biodiversity, and others as data and assumptions allow, based on existing best available science including from on-going quantitative analytical work by the Government and the World Bank. To the extent possible, these co-efficients will be aggregated to estimate project impact in terms of land degradation and climate risk threat reduction, as well as overall ecosystem function and delivery of global environmental benefits as required by the GEF. This tool will allow Project environmental and M&E officers to estimate, project, and report on local and global environmental impacts at local, State and Federal levels. This will provide a coarse but cost-effective operational approach to estimating impact from adopting SLM practices. (B1.4) A fourth monitoring tool to be refined and applied will track changes in land productivity, land degradation, and overall ecosystem function nationwide. This tool will use freely available satellite data to track net primary productivity to estimate overall land degradation trends in rain-fed environments. Net primary productivity, reported in amount of carbon, is based on the commonly known NDVI, which tracks changes in vegetation cover. Net primary productivity is more applicable for monitoring land degradation and basic land productivity trends because carbon is considered a proxy for overall ecosystem performance. The project will allow the government to apply this 70 indicator tool to the Nigerian context and develop capacity to use it across land use related sectors. It will also help validate the estimates described above in the activity- based approach to estimating environmental impacts. (B2) SLM information system and knowledge base (US$0.14m GEF) 41. The objective of incremental co-funding to this sub-component is to finance the development of a comprehensive national technical knowledge base and dynamic information system on climate-smart soil and water conservation specific to Nigeria's agro-ecological zones. The aim is to overcome the highly fragmented nature of knowledge available in the country and serve as a "one-stop shop" for knowledge and information on rural land and water management practices including best-fit technologies, planning approaches, and so on. The Knowledge Base will provide substance for the training, communications, information support, and capacity development work described under Component A. It would aim to serve policy makers, technical staff including extension services and private advisory service providers, as well as community practitioners. The knowledge base will further facilitate improved investment programming as well as learning. As part of the knowledge base, a simple geospatial tool for a general audience will be developed and applied. This will provide timely information on climate and land risk factors (erosion, temperature, rainfall, etc), land use, land use change, and other parameters. As the FMARD continues to digitize its soil erosion maps, and climate assessments get underway, this work becomes increasingly important and useful to inform Project management and also future investment programming. These functions will be linked to the existing project's Management Information System, as well as databases, websites, and knowledge repositories of key agencies (ADP, etc). Lastly, capacity support will be provided to ensure that the knowledge base is integrated into government decision making and extension across sectors. 42. Specific activities to be financed include: (B2.1) The Technical Knowledge Base includes financing under the baseline project and additional GEF support will focus on: (i) Developing a GIS function that includes mapping Project interventions and SLM Investment Framework priorities, (ii) An on-line and physical inventory and cross-referencing of sub-national diagnostic work and planning documents in the knowledge base (e.g. rural land use plans that will become available as project implementation progresses, SLM technology manuals, products from the research and extension communities, etc.). Other aspects of the Technical Knowledge Base are covered under the baseline IDA funding. 71 Annex 5: Project Costs NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Local Foreign Total Project Cost By Component and/or US US US Activity $million $million $million A. Capacity Building, Local 5.07 0.93 6.00 Government, and Communications and Information Support B. Monitoring, Evaluation, and 0.58 0.22 0.80 Knowledge Total Project Costs1 5.65 1.15 6.80 1 Identifiable taxes and duties are US$m 0.46, and the total project cost, net of taxes, is US$ 6.34. Therefore, the share of project cost net of taxes is 93%. Cost by Project Cost by Disbursement Components Year ($m) Category ($m) Community Grants Equipment/goods Operational Cost Workshops Training& Services TOTAL Title Yr1 Yr2 Yr3 Yr4 A. Capacity Building, Local Government, and Communications and Information Support 1.50 1.01 2.39 1.10 1.52 1.52 0.62 0.49 1.85 6.00 B. Monitoring, Evaluation, and Knowledge 0.25 0.17 0.22 0.16 0.65 0.04 0.11 0.80 TOTAL COST 1.75 1.18 2.61 1.26 2.17 1.55 0.73 0.49 1.85 6.80 72 Annex 6: Implementation Arrangements NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION 1. Project implementation period. The GEF incremental grant will be implemented from July 2010 to December 2013. 2. Arrangements for the GEF incremental grant: Implementation of the GEF incremental grant is fully integrated into the overall conceptual design and the existing implementation arrangements of the baseline Fadama III project and no additional institutional structures or lines of accountability will be created. Essentially, the GEF incremental grant provides an additional financing source for a number of incremental activities mainly pertaining to capacity building, communication and awareness raising, knowledge transfer, and technology guidance, all of which are aimed to improve the enabling environment for scaling up SLM within the context of community-driven rural development supported by the Fadama III project. As such, implementation arrangements for the GEF incremental grant simply build on the implementation arrangements in place for the baseline Fadama III project with the GEF grant providing for additional technical expertise and human resources input. 3. Components A and B of the incremental GEF grant reinforce existing components 1 and 6 of the baseline Fadama III project, respectively. The only two sub-components that are conceptually additional to the design of the baseline project are Component A4, National and State Coordination on Land and Water Management, and Component A5, Community SLM Award. However, no additional implementation or institutional structures are necessary for implementation of either sub-component: Activities under sub-component A4 support the process of investment programming for rural land management, including coalition building and knowledge management. The multi-sector National SLM Steering Committee spearheads all activities under this sub- component with support from the National SLM Technical Committee, which serves as its technical level coordination body. Annual work plans for Sub-Component A4 will be developed by the National SLM Technical Committee, chaired by the FMARD, and submitted to NFCO. NFCO will hold overall implementation responsibility for this sub- component in terms of procurement, disbursement, and project and safeguard reporting responsibilities. Component A5 provides for a community grant mechanism additional to the baseline Fadama III Project's existing community-driven sub-project financing mechanism. The selection and grant award process for the Community SLM Award builds on existing project implementation structures at the community (FCAs), local government (Fadama Desk Officer), state (SFCO) and federal level (NFCO). Administration and coordination support functions will be provided by the NFCO. See further details in the detailed Project Description (Annex 4). 4. All activities financed under the GEF incremental grant will be implemented through the existing implementation structures put in place under the baseline Fadama III project. Implementation arrangements for Fadama III are organized by level of intervention (e.g. federal level, state level, local government level, community level) and presented in a summarized 73 version further below. The following table summarizes implementation responsibilities for each sub-components of the GEF incremental grant: Project Component/Sub- Implementation responsibility component Component A: Capacity Building, Communication and Information Support (1) Capacity Building for Implemented at federal/zonal level by NFCO (using the Community Organizations for training of trainers approach) Local Development Planning (2) Capacity Building for Implemented at local government level with support from Local Governments for Rural LFD (in 62 selected LGAs only) Land Use Planning (3) Communications and Implemented at federal level by NFCO and at State level by Outreach SFCO (4) National and State Implemented at federal level by NFCO and at State level by Coordination on Land and SFCO. Annual work plans are prepared by the National SLM Water Management Technical Committee and submitted to NFCO. (5) Community SLM Award Implemented at community level by EIGs/FCAs with support from LFD. Sub Project Agreements are signed between NFCO and FCAs27. Award ceremonies at zonal level will be carried out by NFCO in coordination with SFCO. SFCO will monitor implementation of awarded sub-projects. Component B: Monitoring, Evaluation, and Knowledge (1) Monitoring tools Implemented at federal level by NFCO (2) SLM Information system Implemented at federal level by NFCO and Knowledge Base 5. Implementation overview for the baseline Fadama III project. The Fadama III Project utilizes the existing institutional structure of the FMARD, its federal and state level coordination offices as well as state ministries of agriculture, without creating an add-on project implementation unit. Project management is based on a decentralized, demand-responsive structure that grants community organizations as much decision-making authority as possible, and promotes community ownership of and responsibility for operations and maintenance of infrastructure investments. 6. Overall project execution responsibility. The FMARD holds overall responsibility for execution of the Project through the National Program for Agriculture and Food Security (NPAFS)28. This Program is entrusted with responsibility for coordinating the implementation of all agricultural sector projects, including those that are externally-funded. Most of the Project's administrative, financial and implementation arrangements are decentralized and demand-driven, and critical decisions take place at the community level within the FCAs and the 27 Due to the limited number of community SLM awards that will be implemented in each State, Sub-Project Agreements for the SLM Awards will be entered into between the NFCO and the FCAs and not between SFCOs and FCAs, as is the case for SPAs under the baseline Fadama III Project (see paragraph 14 of this Annex). 28 Under the new harmonized and consolidated arrangement for multilateral donor assisted projects, the National Program for Agriculture and Food Security (NPAFS) of the FMARD now has responsibility to coordinate Fadama III and all other sector operations including the GEF incremental grant to Fadama III As such, the NPAFS now performs the Project implementation role previously carried out by the National Food Reserve Agency (NFRA). 74 various EIGs, which constitute them. Since no new coordination structure has been created under the baseline Fadama III Project, the NPAFS delegates the functions and responsibilities of day-to-day implementation coordination to the National Fadama Coordination Office (NFCO). Administratively, the NFCO reports to the supervising ministry through the NPAFS. Project Coordination and Oversight 7. At the Federal level: As is now the case with the Fadama III operation, the NPAFS through NFCO coordinates Project activities on behalf of FMARD. At the highest level in FMARD, a small advisory committee called the National Fadama Technical Committee (NFTC), which is a sub-committee of the Federal Agricultural Development Program Executive Committee (FADPEC), is responsible for project oversight, overall policy guidance, coordination with other projects, strategic direction and review and approval of the annual work program and budget of NFCO. It reviews project progress, reviews and approves work plans and budgets. The NFTC is chaired by the Permanent Secretary of the supervising ministry (FMARD). It comprises Permanent Secretary level representation from the participating/relevant Federal Ministries, including Finance (FMF), Environment (FME), Cooperative Affairs, Commerce and Industry, Women Affairs and Youth Development; the National Planning Commission, two representatives of Federations of Farmers, a representative of the private sector and a representative of civil society. The NFTC convenes at least every six months or as determined by the chair to review progress in implementation and review and approve work plans and budgets. NFCO serves as the secretariat for NFTC and is responsible for day-to-day overall implementation coordination. In the performance of this function, the NFCO is responsible for ensuring that Bank guidelines and procedures are followed on procurement, disbursements, auditing and overall financial management, and that the environmental and social guidelines are followed in both developing and implementing components. The Federal Government is in the process of establishing Federal Project Financial Management Division (FPFMD). NFCO's responsibilities for financial management will be adjusted so to reflect the establishment of FPFMD in due time. 8. NFCO is headed by a National Fadama Coordinator (NFC), assisted by a core team comprising: Senior Technical Operations Officer (national); Senior Community Development Officer (national); Procurement Specialist (national), Financial Officer/Accountant (national), Environmental Officer (national, through secondment); Senior M&E Officer (national); M&E Advisor (international, 2 years plus part time thereafter); plus the current technical support team. NFCO staff has been recruited under terms and conditions satisfactory to the Bank. The same team will be responsible for the implementation of the incremental GEF grant. Detailed responsibilities of the NFCO are listed in the PIM for Fadama III. 9. Three staff positions within the NFCO technical support team are set to expire in 2011. In order to ensure adequate technical input, coordination support and M&E accountability beyond 2011, GEF will finance expanded technical support to NFCO for the final two years of the project related to (i) GIS and land use mapping (GIS officer), (i) coordination of SLM activities and technology guidance (SLM officer), and (iii) SLM M&E (Land monitoring specialist). 10. At the State level, the State Ministry of Agriculture has delegated day-to-day implementation and coordination of the Project to the State Fadama Coordination Office (SFCO), while the oversight, policy, and strategic orientation functions of the Project is 75 performed by the State Fadama Technical Committee (SFTC), which is a Sub-Committee of the Agricultural Development Project Executive Committee (ADPEC). The SFTC is chaired by the Permanent Secretary of the State Ministry of Agriculture, and meets every six months, to review and approve work plans and budgets. The state's annual work programs and budgets are subject to review and approval by the Bank. SFCO reports every six months to the SFTC. Membership of the SFTC comprises the Permanent Secretary representatives of the participating line ministries and state agencies, two representatives each of civil society and the private sector and a representative of the NGOs operating in the state. SFCO has recruited, trained, and deployed a team of Facilitators who, in turn, provide technical assistance and training support to beneficiary groups in the participating communities. The Facilitators assist in the formation and awareness raising of groups, assist communities in the preparation of LDPs and in the planning, designing and implementation of their selected sub-projects. SFCO is responsible for supervision and monitoring of the Facilitators, recruiting consultants to design and implement training programs both for the Facilitators and the communities, facilitating linkages of the FCAs with other support agencies, including local banks. The roles and responsibilities of SFCO and SFTC are detailed in the PIM. 11. Each SFCO has a support team, comprising: (i) State Fadama Coordinator; (ii) M&E Officer, (iii) Community Development, Gender and Youth Officer, (iv) Rural Finance and Livelihoods Officer, (v) Environment Officer, (vi) Training and Technical Assistance Officer, (vii) Procurement Officer, (viii) Communications Officer and (ix) Project Accountant (on Secondment from the State Accountant General's Office). 12. At the Local Government level, a Local Fadama Desk (LFD) and Local Fadama Development Committee (LFDC) have been established. The LFDC and the LFD are responsible for local level review and approval of the LDPs and associated sub-projects. The LFD comprises one or two civil servants with qualifications and experience satisfactory to the SFCO, seconded to the Project to play the role of a clearing house for LDPs. The LFD screens LDPs to ensure that they meet a basic set of criteria as spelled out in the PIM and calls for meetings of the LFDC to review and approve the plans. Decision-making on sub-project investment proposals emanating from the communities is delegated by the state government to the LFDC. Government representation in the LFDC is limited to one-third of the committee's total membership in order to ensure a majority representation of the stakeholder-beneficiary groups: the FCAs, civil society and the private sector groups. Further, at least one-third of the total membership of the LFDC is required to consist of women. The LFDC is chaired by the chairperson of the local government council or his/her representative and a traditional or community leader serves as the deputy chairperson. The LFDC is also responsible for monitoring community mobilization efforts and ensuring that the needs and priorities of fadama resource users are reflected in the LDPs. The Project finances technical assistance and consultant services to enhance the quality of work of the LFDC. The LFDC seeks to build consensus on priorities and approves community proposals in the context of an indicative annual budget determined by the state. After the committee's recommendations have been reviewed by SFTC/SFCO to determine consistency with state development strategy and compliance with the guidelines in the PIM, funds are disbursed to settle invoices for services delivered to the FCAs and copies of the transactions are, thereafter, forwarded to NFCO for information and monitoring purposes. Responsibilities of the LFD are listed in the PIM, as are those of the LFDC which also includes membership criteria. 76 13. At the Community level, critical decisions take place within the FCAs and the various economic interest groups (EIGs, or FUGs as they are equivalent terms), which constitute them. The Fadama Community Associations (FCAs) are apex organizations of EIGs, which have a common interest in deriving their livelihood from the shared natural resources of the fadama areas. They identify, prepare, execute, supervise, operate and maintain their sub-projects, assisted by a team of facilitators and technical specialists contracted through their SFCO or directly, and through technical assistance and training made available by the Project. 14. The number of FCAs in a particular Local Government Area (LGA) depends on the size of the fadama area, the population of the area and the number of FUGs. The role of the FCAs is to link FUGs with the Project and facilitate access to project-funded support in capacity-building, advisory services and investment financing of their development activities. To gain such access, FCAs must meet specific eligibility criteria and follow specific procedures, as outlined in the PIM. Once sub-projects are approved by the Local Fadama Development Committee, FCAs can access a share of the costs for design and implementation. Sub-project Agreements (SPAs) are signed between the SFCO and FCAs. These agreements spell out the terms and conditions for the funding, execution, ownership, operation and maintenance of the approved sub-projects. Resources are then transferred directly from the state level Special Account (PFMU) to settle the project's share of the costs of services/works provided to the various sub-projects of the FCAs/FUGs, upon proper certification of delivery of services and/or completion of work/s. 15. The team of facilitators and other specialists has been deployed to provide related and necessary technical assistance and training support. In order to access project resources, an FCA must be legally constituted as civic and non-political association, recognized by both state and local government law. The FCA establishes a management committee consisting of: a chairperson, secretary, treasurer, community development officer (including disadvantaged groups), and communications/public relations officer as the core management team who are democratically elected, and three ex-officio members from the subcommittees on procurement, maintenance and operations of productive investments, and supervision and M&E. Consistent with the Project's emphasis on a balanced treatment of gender, at least one-quarter of the total membership of the FCA management committee is expected to be women. The management structure includes rules, procedures and guidelines for performance incentives and penalties as well as a system of checks and balances to prevent possible abuse of public trust. The FCAs identify, prepare, implement, operate and maintain their sub-projects assisted by Facilitators and technical specialists whom they contract either through SFCO or directly and by technical assistance and training made available by SFCO. Disbursements to the FCAs will occur through LDPs and SPAs as described in the PIM. The management team of the FCAs, the Facilitators, the Desk Officers and approved consultants for the LFDC receive training on sub-project preparation, execution, procurement, quality control, accounting and financial reporting, governance, and O&M requirements, and responsibilities in the context of the project's CDD approach. The responsibilities, membership and democratic procedures of the FCAs are outlined in the PIM. 16. Members of Fadama User Groups (FUGs, also known as Economic Interest Groups or EIGs) are the primary beneficiaries of the Project. A user group will be defined by the members 77 themselves. The size of a Fadama User Group is usually between twenty and thirty households and as such, may comprise anywhere from about 150 to 350 individuals.29 17. To promote partnerships in rural development, the Project follows an approach based on contracting of professional public/private support services required for implementing demand- driven productive and income generating sub-projects and advisory services activities. These service providers include approved consultancies, NGOs, quasi-public agencies, and the private sector. 18. For a detailed description of the sub-project cycle, refer to the detailed project document of the baseline project. Implementation Chart Review & approve annual work programs & budgets of NPAFS NPAFS FEDERAL NFTC GEF NFCO/DA Review & approve annual work programs M&E & budgets of SFDO ADP OSAG STATE SFTC SFCO PFMU/DA M&E Review and approval of sub-projects Contracting Facilitators LOCAL GOVT LFDC LFD M&E Advisory Service Local development plans Providers Sub- projects contracting COMMUNITY Fadama Community Associations LFDC: Local Fadama Development Committee NPAFS: National Program for Agriculture and Food LFD : Local Fadama Desk Security, of the Federal Ministry of Agriculture and NFCO: National Fadama Coordination Office Rural Development NFTC: National Fadama Technical Committee PFMU: Project Financial Management Unit OSAG : Office of the State Accountant General DA: Designated Account SFTC: State Fadama Technical Committee SFCO: State Fadama Coordination Office Dotted red lines represent flow of funds 19. Project Implementation Manual. Overall implementation of the Project follows detailed procedures defined in the PIM for the existing baseline Fadama III Project. An addendum to the existing PIM has been prepared for the purpose of the incremental GEF Grant. This addendum provides a) further details on SLM specific technology options, and b) further details on the modalities of the GEF-financed Community SLM Award and other GEF-financed activities. 29 This number is derived from estimates of the size of Fadama User Associations active in the first Fadama Project. 78 20. Supervision. Supervision for the incremental GEF grant and the baseline Fadama III project will be carried out as one unified exercise in line with the fully integrated nature of the GEF-financed activities. A strategic and comprehensive Supervision Plan is outlined in Annex 6B of the baseline Fadama III project. 79 Annex 7: Financial Management and Disbursement Arrangements NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Introduction The financial management assessment was carried out in line with the Financial Management Practice Manual (1 March 2010) of the FM Sector Board. The objective of the assessment was to determine whether the implementing entities have acceptable financial management arrangements, which will ensure: (i) that funds are used only for the intended purposes in an efficient and economical way; (ii) the preparation of accurate, reliable and timely periodic financial reports; and (iii) safeguarding of the entities' assets. The FM arrangement in participating states is based on the PFMU, a robust multi-donor and multi-project FM platform, which was established in all states from 2002 through the joint efforts of the Bank and the government. The PFMUs feature strong and robust systems and controls that are not otherwise possible in individual ring-fenced project FM arrangements. The PFMUs were assessed by the Bank and found to be acceptable for the implementation of Bank-assisted projects. Because they are responsible for the FM arrangements of on- going projects, they are reviewed regularly and strengthened as necessary e.g. by way of training on an ongoing basis. At the federal level, NFCO is presently implementing a Bank-assisted project i.e. Fadama III, and has acceptable FM arrangements based on past supervision mission reports. Recent reviews showed that these arrangements are adequate for the implementation of this Project at the federal and state level. The residual risk for the Project, however, is assessed as moderate. This will be mitigated by the strong PFMU arrangement, robust FM arrangement at FMD/NFCO and implementation of the FM action plan (Table in para 6 below), as well as substantial follow up and implementation support. The Federal Government is in the process of establishing Federal Project Financial Management Division (FPFMD), which would call for some adjustments in these arrangements in future. Country Issues The Public Expenditure Management and Financial Accountability Review (PEMFAR), of 2006 showed that the Federal Government has made significant efforts to advance the reform of Public Financial Management (PFM) system since 2003. There is, nevertheless, much more to be done and PFM initiatives and reforms are articulated in the Government's Poverty Reduction Strategy Program (NEEDS), which are supported under the CPS, specifically through the three Bank-assisted projects; EMCAP ­ closed December 2007, SGCBP and the ERGP. Major achievements so far have been: (i) the adoption of an oil-based fiscal rule that has greatly improved the quality of macroeconomic management; (ii) launching of significant steps toward increased transparency of the budget process; (iii) more efficient cash management; (iv) procurement reforms; (v) updating the legal framework for PFM; (vi) reallocation of budget resources in support of MDG-related 80 government functions; (vii) strengthening monitoring and evaluation; and (viii) introducing a more strategic longer-term focus in budget management. This has clearly helped to reduce waste of public resources, particularly on the capital budget and the payroll. The impact of these early measures is also evident in significantly improved fiscal and broader macroeconomic outcomes. Risk Assessment and Mitigation Risk Risk Risk Mitigating Measures Incorporated into Project Conditions Residual Rating Design for Risk Negotiation, Rating Board or Effectiveness Inherent Risks 1 Country Level H The Country Partnership Strategy (CPS) that supports None S Funds may not be used Nigeria's NEEDS aims to achieve improved transparency in an efficient, and accountability for better governance which minimize accountable and opportunity for corrupt practices. This has translated into transparent way. various projects, including the ERGP and the SCGBP at the federal and state levels, respectively, focusing on improving accountability, good governance, transparency and fighting fraud and corruption. Reforms in budgeting, FM systems, procurement and auditing are being supported. Robust financial management arrangements have been established for the project and these were designed to mitigate the Country level risk. 2 Entity Level S The Project will be implemented in the state by the SFCO in None S Weak institutional the SMOA. SFTC will perform oversight functions over capacity to implement Project implementation progress. At the Federal level, the Project components NFCO will coordinate Project activities and NFTC will and to effectively perform oversight functions, overall policy guidance, monitor progress and coordination with projects, strategic direction and review embrace full and approval of the annual work plans and budget of the accountability for NFCO. results. The robust FM arrangements at the state level include procedures to handle CDD operations, and staff of PFMU has experience in managing CDD financial flows and reporting. 3 Project Level Presence of prior M Adequate training of FM staff will be arranged as needed. None M experience and familiarity with the NFCO and SFCO (formerly called NFDO and SFDO) implementation of presently perform similar functions under the Fadama III Bank-assisted project Project. 81 Risk Risk Risk Mitigating Measures Incorporated into Project Conditions Residual Rating Design for Risk Negotiation, Rating Board or Effectiveness Control Risks 4 Budgeting M Budget execution to be monitored through quarterly Quarterly L Failure to properly unaudited Interim Financial Reporting. interim prepare comprehensive financial and realistic budget Computerized system which includes budget modules. reporting and effectively monitor (IFR) budgets regularly. arrangements and formats have been discussed and agreed by Project Negotiations stage. 5 Accounting M Robust FM arrangements at NFCO and PFMU. None L Failure to account for Project funds Accounting and internal control procedures established and adequately and provide documented in project Financial Procedures Manual (FPM). full supporting documentation. Qualified accountants are already in place and managing the Lack of accounting Fadama III financial matters in a satisfactory manner. Any capacity may additional accounting staff required will be recruited compromise the quality competitively to boost the existing capacity. accounting practice and information/data Independent and effective internal audit function that is focused on risk management and help to enhance compliance with set procedures and standards. 6 Internal S Internal control is strengthened by using the existing FM None S Control arrangement at the NFCO ­ the arrangement features strong Inadequate controls. documentation of transactions, including Robust FPM, and staff are familiar with this FPM. non-retirement of advances. Independent and effective internal audit and risk management. Lack of mechanism or Adequate follow up by Bank staff on issues as well as management's good training for project staff. will to enforce rules and procedures and the Oversight arrangements in place to ensure management application of applies rules and procedures and to enforce sanctions as sanctions needed 8 Funds Flow M FMD is familiar with the preparation of withdrawal None M Delays in requesting applications and disbursement requirements of the Bank. for withdrawal of Grant proceeds from Funds flow procedures to communities are fully the Bank documented in the FPM and staff are familiar with this Delay in funds flow to procedure. the States. Funds for approved State level activities will be disbursed through bank electronic transfer from Current draw-down account in Naira to the State's bank account, on the basis of information to be included in their funding request. 9 Financial Reporting S Project reporting guidelines included in FPM. None S Accountability and Strict monitoring of implementing States and PFMUs will reporting difficulties as be pursued a result of the Project's complexity in view of Implementation to be monitored by NFCO. 82 Risk Risk Risk Mitigating Measures Incorporated into Project Conditions Residual Rating Design for Risk Negotiation, Rating Board or Effectiveness multiple implementing States and the need to Use of the flexible FMS more effectively to generate reports account for funds and account for project activities. disbursed to them to meet the set reporting FMD staff has adequate experience in Bank reporting deadlines for unaudited requirements. IFRs. Delayed Finalization and submission of annual financial statements 11 Auditing M Reliance on the Internal Audit Units of the NFCO to None M Delay in the enhance internal control system. Private sector accounting submission of firms will be hired as external auditors to carry out an acceptable audit independent audit of the project financial statements based reports on TOR acceptable to IDA. Overall FM Risk S M Rating H-High S-Substantial M-Moderate L-Low Strengths and Weakness Strengths: The use of existing FM arrangement in the FMD/NFCO and PFMUs in all the participating states is a significant FM strength in the project. Staff of the FMD/NFCO and PFMU are experienced in the implementation of Bank-assisted projects, they are trained in Bank fiduciary requirements, are professionally qualified and the FMD/NFCO and PFMUs are equipped with computerized FM systems and FPM. The NFTC will be responsible for Project oversight, overall policy guidance, coordination with other projects, strategic direction and review and approval of the annual work program and budget of the NFCO. SFTC will exercise similar oversight functions as NFTC at the state level. Weaknesses: internal control weaknesses (identified in the current audit report of NFCO), includes not maintaining cash book for the DA, non-preparation of reconciliation statement and over drawn project account. The DA cash book and reconciliation statement are now in place. The Table below indicates the actions to be taken for the project to further strengthen its financial management system and address the identified weakness. Action Plan Ref Action Date due by Responsible No. 1 Agreement on formats of the unaudited Interim Completed NFCO with support Financial Report (IFR) and the Annual Financial and guidance of IDA Statement. task team 2 Expand contract of the current external auditor for Within 90 days after NFCO Bank-assisted projects in NFCO to include GEF and Effectiveness revise the audit TOR in this regard. 3. Agreement on Memorandum of financial services and Completed SFCO/PFMUs service standards between PFMUs and the Agencies. 83 Ref Action Date due by Responsible No. 4. Addendum to NFCO FPM: Strengthen monitoring and Annex available within 2 NFCO supervision arrangements in NFCO to ensure bank months of effectiveness reconciliation and management of the cash books are done in accordance with the FPM. During project implementation Implementing Entities The proposed Project, being integrated to and coordinated with the baseline Fadama III project, will utilize the existing institutional structure of the FMARD, its federal and state level coordination offices as well as state ministries of agriculture, without creating an add-on project implementation unit. See Annex 6. The Financial Management Department of the NFCO is expected to manage the financial arrangement of the proposed GEF Project. The existing capacity already established at NFCO for financial management and disbursement is adequate and will be used to implement the GEF program. The GEF incremental grant will be a fully integrated part of the baseline project in terms of implementation. The GEF financed activities implemented at the state level will not cover all 36 States of Nigeria. Instead, GEF support will focus only on those 30 States plus the FCT that do not yet have institutional structures for cross-sectoral coordination and rural land use planning in place. In the six States not covered by this grant (Imo, Kebbi, Kwara, Kogi, Ogun, and Bauchi), state-level watershed committees have already been established. These state committees will operate as sub-committees to the National SLM Committee; consequently, these six States are excluded from additional GEF investments in an effort to avoid duplication of existing external funding support related to capacity building for mainstreaming of SLM at State level. Planning and Budgeting Cash budget preparation will reflect financial projections and cash forecasts for the life of the Project (analyzed year by year) will be prepared on an annual basis. In addition, the, PA (in consultation with key members of the implementing unit) will prepare the cash budget for the coming period based on the work program and the procurement plan. The cash budget should include the figures for the year, analyzed by quarter. The cash budget for each quarter will reflect the detailed specifications for project activities, schedules (including procurement plan), and expenditure on project activities scheduled respectively for the quarter. All annual cash budgets will be sent to the TTL at least two months before the beginning of the project fiscal year. Detailed procedures for planning and budgeting are documented in the NFCO's FPM. Internal Control and Internal Auditing Internal control comprises the whole systems of control, financial or otherwise, established by the NFCO and PFMUs in order to: 84 (i) carry out the project activities in an orderly and efficient manner; (ii) ensure adherence to policies and procedures; (iii) safeguard the assets of the project; and (iv) secure the completeness and accuracy of the financial and other records. Project activities will also be periodically reviewed by the Internal Audit Unit (IAU) of the NFCO. The Head of Internal Audit Unit in the NFCO will report to the NFC and at a minimum they will (i) carry out periodic reviews of project activities, records, accounts and systems; (ii) ensure effectiveness of financial and accounting policies and procedures, as well as compliance with internal control mechanisms; (iii) review SOEs; (iv) physically verify purchases and assets; and (v) carry out other functions as stated in the approved charter. Financial Procedures Manual. The NFCO has a Financial Procedures Manual (FPM) for the Fadama III project. An addendum will be prepared to reflect issues that are specific to the GEF project. Accounting GEF Funds will be accounted for by the Project on a cash basis, augmented with appropriate records and procedures to track commitments and to safeguard project assets. Accounting records will be maintained in dual currencies (i.e. Naira and $). The Chart of Accounts will facilitate the preparation of relevant monthly, quarterly and annual financial statements, including information on the following: Total project expenditures; Total financial contribution from each financier; Total expenditure on each project component/activity; and Analysis of total expenditure into civil works, various categories of goods, training, consultants and other procurement and disbursement categories. Annual financial statements will be prepared in accordance with relevant International Public Sector Accounting Standards (IPSAS). All accounting and control procedures are documented in the FPM and the addendum which will be prepared. The FPM is a living document and it will be regularly updated by the Project Accountant and shared with the Bank and the Government. Financial Reporting Within the NFCO, the project coordinator will ensure that the project officer prepares unaudited Interim Financial Reports (IFR) i.e. monthly and quarterly and Annual Financial Statements, on a timely basis to be submitted by the FMD. In compliance with government reporting requirements, Monthly returns will be made to the Federal Accountant General for incorporation in the government accounts, as described in the 85 FPM. Quarterly and Annual reports are to be submitted respectively to: (i) NFCO, FMF; and (ii) The Bank ­ for the purpose of monitoring project implementation. Details of the Monthly Reports, Quarterly Reports and Annual Financial statements are documented in the FPM. Indicative formats for the reports are available in a Bank guideline called "Financial Monitoring Reports: Guidelines to Borrowers." Auditing The Grant Financing Agreement will require the submission of audited Annual Financial Statements for the project, within six months after year end. A qualified, experienced and independent external auditor acceptable to the Bank that is appointed by NFCO will audit the project activities based on TOR acceptable to the Bank. Besides expressing an opinion on the Annual Financial Statements in compliance with auditing standards acceptable to the Bank, the external auditor will prepare a Management Letter giving observations and comments on the control framework, etc, and provide recommendations for improvement in accounting records, systems, controls and compliance with financial covenants in the Grant Financing Agreement. Financial Management Supervision Plan FM supervision will be consistent with risk-based guidelines applicable in the region, and will involve a collaborative approach within the Bank's team. The first FM review will be carried out within 6 months of Grant effectiveness. This detailed review will cover all aspects of FM, internal control systems, overall fiduciary control environment and tracing transactions from the bidding process to disbursement. Thereafter, the on-site supervision intensity will be based initially on the PAD FM risk rating and subsequently on the updated FM risk rating during implementation. Additional supervision activities will include desk review of quarterly IFRs, quarterly internal audit reports from FMD and IAU respectively and the annual audited Financial Statements and the management letters. In addition there will be timely follow up of issues arising, and updating the financial management rating in the Implementation Status Report (ISR) and the Portfolio and Risk Management System. The Bank project team will play a key role in monitoring the timely implementation of the action plan. Fund Flows and Disbursement Arrangements The project funding will consist of GEF Grant financing. The Bank will disburse the Grant proceeds through a US$ denominated Designated Account (DA) which will be managed by the FMD/NFCO under the same supervisory rules as the main baseline IDA funded Fadama III Project. Funds for approved State level activities will be disbursed through bank electronic transfer from Current draw-down account in Naira 86 to the State's bank account, on the basis of information to be included in their funding request. The current account in Naira at SFCOs will be managed by PFMUs. Specific funding, banking and accounting arrangements are as follows: A US$ denominated DA to which the advances from GEF Grant will be lodged; A Current (Draw-down) Account in Naira at NFCO with the designated commercial bank at SFCOs to which draw-downs from the DA will be credited once or twice per month in respect of incurred eligible expenditures, maintaining balances on this account as close to zero as possible after payments. A Current Account in Naira with a designated commercial bank at SFCOs into which funds for State level activities would be credited. All bank accounts will be reconciled with bank statements on a monthly basis by the FO. A copy of each bank reconciliation statement together with a copy of the relevant bank statement will be reviewed monthly by the designated officials who will expeditiously investigate any differences arising. Detailed banking arrangements, including control procedures over all bank transactions (e.g., check signatories, transfers, etc.) will be documented in the addendum to FPM. Additionally, the FO will maintain a GEF Ledger Loan Account in US Dollars/Naira/SDR to keep track of withdrawals from the GEF Grant, The account will show (i) deposits made from the GEF Grant, (ii) direct payments from the GEF Grant proceeds by the bank, and (iii) the opening and closing balances. The FO will maintain a cumulative record of draw-downs from the GEF Grant that will be reconciled monthly with the Disbursement Summary availed by the Bank through the client connect link. The FO will be responsible for preparing and submitting to the Bank applications for withdrawal, as appropriate. Appropriate procedures and controls, documented in the FPM and the addendum to FPM to be prepared, will be instituted to ensure disbursements and flow funds are carried out in an efficient and effective manner. 87 Funds Flow Diagram Source of Funds (World Bank) GEF GRANT Commercial Bank Accounts DA in US Dollars Commercial Bank Current (Draw Down) Account in Naira Federal level State Level Expenditures (NFCO) Expenditures (SFCO) Disbursement Arrangements The Project will adopt the Transaction-based Disbursement Procedure (as described in the World Bank Disbursement Handbook). The various disbursement methods described in the Handbook i.e., advances, direct payment, reimbursement, and special commitments will all be available for use. Where the unaudited IFRs are found to be adequate and produced on a timely basis, there are no serious financial and accountability issues and if the recipient requests for conversion to report-based disbursements, the Bank will undertake a review of the entity's capacity to determine if the report-based disbursement procedure could be used for the project. Minimum Value of Direct Withdrawal Applications The Minimum Value of Applications for reimbursement and direct payment is USD 100,000. 88 Reporting on Use of Grant Proceeds The supporting documentation for reporting eligible expenditures paid from the DA should be a summary report of the Statement of Expenditures (SOE) and records evidencing eligible expenditures for payments against contracts valued more than US$100,000 for individual payments of expenditure financed by Community grants under Category 5; more than US$ 200,000 for operating expenses or expenses on training and workshops; more than US$ 300,000 for payments against contracts with consulting firms and more than US$ 50,000 for individual consultants and a list of payments against contracts that are subject to the Bank's prior review. The supporting documentation for requests for direct payment should be records evidencing eligible expenditures (copies of receipt, supplier's invoices, etc). All supporting documentation for SOEs will be retained by the FMD/NFCO and must be made available for review by periodic Bank missions and internal and external auditors. Designated Account The currency for the DA will be United States Dollars. Monthly Replenishment Applications The DAs will be replenished through the submission of Withdrawal Applications on a monthly basis by the FMD/NFCO and will include reconciled bank statements and other documents as may be required until such time as the recipient may choose to convert to report-based disbursement. Disbursements by category Table 3 below sets out the expenditure categories and percentages to be financed out of the Grant proceeds. Allocations to disbursement categories have been made based on the project's work plans. Disbursements will be based on the work plans agreed annually with the Bank. With regard to Withdrawal Conditions and Withdrawal Period: (b) for payments to be made with respect to category (4) expenditures to any Participating State unless the Recipient has furnished to the World Bank evidence satisfactory to the World Bank that the concerned Participating State has: (i) duly established its FCAs in form and substance satisfactory to the World Bank; and (ii) the Subsidiary Agreement between the Recipient and the concerned Participating State has been duly executed by the parties thereto in form and substance satisfactory to the World Bank. In order to provide maximum flexibility and disbursement based on implementation performance, all disbursement categories have been lumped as one category consisting of goods, consultancy services, SLM Award Grants, Operating Costs and Training in the legal agreement and will be financed at 100 percent of eligible expenditures, inclusive of taxes, in accordance with the work plan and budget for the respective fiscal year. 89 Table 3. Disbursement Categories Category Amount Percentage of in US$ expenditures to be financed (1) Equipment/goods 488,000 100% (2) Consultants' services 2,169,000 100% (3) Training and workshops 733,000 100% (4) Operating costs 1,556,000 100% (5) SLM Award Grants 1,854,000 100% Total Amount 6,800,000 Concluding Statement The Financial Management Assessment conclusion is that subject to the recommended mitigation measures and the recommended action plan being implemented as per the agreed time frame, the project has met the minimum FM requirement in accordance with OP/BP 10.02. Further, this objective will be sustained by ensuring that strong and robust financial management arrangements are maintained for the project throughout its duration. Detailed Financial Management reviews will also be carried out regularly, either within the regular proposed supervision plan or a more frequent schedule if needed, to ensure that expenditures incurred by the project remain eligible. 90 Annex 8: Procurement Arrangements NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION A. General 1. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 and revised in October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 and revised in October 2006 and May 2010, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 2. Procurement of Goods and Small Works: Goods procured under this project would include: SLM Training Materials, Guide Books, SLM Technology Source Books, Computers, Mapping Software, etc. Small works would include erosion control and drainage structures, etc. The procurement will be done using the Bank's SBD for National Competitive bidding procedures. Procurement for readily available off-the-shelf goods that cannot be grouped, or standard specification commodities for individual contracts of less than US $50,000 equivalent, may be procured under shopping procedures as detailed in paragraph 3.5 of the "Guidelines: Procurement under IBRD Loans and IDA Credits" May, 2004, and revised in October 2006 and May 2010; and the Guidance on Shopping Memorandum" issued by IDA, June 9, 2000. 3. Selection of Consultants: Consultancy Services which include Advisory Services, Technical Assistance, etc., will be available for which, consultant firms, individual consultants, public and private research institutions and centers will compete to provide problem-solving oriented research and technology transfer services to Fadama users. Consultant Services to be selected under this project would include: Development of SLM training Programme: land, Water Forest Resources, Training the Trainer Program, Communication and Information, Support National and state Coordination on land and Water management, Knowledge Management and Information, Investment alignment and Institutional Capacity Building, Monitoring & Evaluation, National Technical Knowledge base, etc. These services will be selected using Request for Expressions of Interest, short-lists, and Bank's Standard Requests for Proposal where required by Bank's Guidelines. .Short lists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Research institutes, public training institutions, and NGOs may be hired to carry out specific researches, training, distribution and monitoring services in accordance with paragraph 1.11 (b ­ d) and 3.16 of the Consultant Guidelines. 4. Operating Costs. The operating costs shall include staff, travel expenditures and other travel-related allowances with prior clearance from IDA; equipment rental and maintenance; office rental and maintenance, materials and supplies; utilities and communication expenses; and 91 bank charges. Operating costs financed by the Project will be procured using the implementing agency's administrative procedures which shall be acceptable to the Bank. 5. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for goods procured, are presented in the Fadama III Project Implementation Manual, Procurement Manual and the equivalent documents. C. Procurement capacity Assessment of the Agency and Mitigating Measures for the Procurement Risks 6. The Fadama III project utilizes the existing institutional structure without creating an add-on project implementation unit. An assessment of the procurement capacity of Fadama III was carried out in accordance with procurement services policy Group Guidelines dated August 11, 1998. The assessment reviewed the organizational structure for implementing the project and the roles of the key actors in the project implementation. Key issues and risks concerning procurement in the implementation of the project were discussed with the project team and action plan to address them were put in place before its effectiveness. Since Fadama III has qualified procurement specialists with adequate experience and skills to carry out full implementation of the Project, fresh procurement capacity assessment is no longer required. 7. The existing Fadama III FMARD/NPAFS/NFCO has the responsibility to implement this incremental GEF grant, and as such has the procurement and contract administration procedures that are considered to be generally of good quality, reliable, timely, and transparent with few corrective actions needed by the Bank as indicated in the Procurement Action Plan below. The Overall Risk Rating is considered Moderate. 92 Table 1: Procurement Action Plan Action Responsibility Due Date Remarks 1 Procurement Plan for the first 18 months prepared NFCO By Appraisal Draft developed. and agreed with the Bank (done) Finalized and agreed for Negotiation. 2 Preparation of Project Implementation Manual PIM NFCO and the By Negotiation NFCO to adopt the including adoption of the Generic Procurement Bank. (done) Fadama III documents manual for Bank financed Projects in Nigeria. 3 Adoption of the Bank Standard Bidding Documents NFCO and Bank By Appraisal First set of NCB bidding for use under NCB in lieu of lack of National done) document to be prepared Standard Bidding Document by NFCO and reviewed by the Bank before effectiveness. 4 Establish a central complaint NFCO Before To reduce the risk of database/website/internet and or hot-lines Effectiveness misuse of project funds. 5 Establish proper procurement filling system and NFCO Before To ensure easy retrieval develop procurement tracking system. effectiveness of information/data. 6 Publication of Contract awards and list of grant to NFCO On quarterly basis On a continuous basis. beneficiaries 7 Conduct Independent Technical Audit (separate Bank Annually To reduce the risk of from annual external financial audit misuse of project funds. D. Procurement Plan 8. The Borrower, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team at Appraisal and at Negotiation will be made available in the National Fadama III Coordination Office, Abuja. It will also be available in the project's database and in the Bank's external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. E. Frequency of Procurement Supervision 9. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended two (2) supervision missions to visit the field to carry out post review of procurement actions every year. All relevant actions required to support procurement supervision are as applicable under Fadama III. F. Details of the Procurement Arrangements Involving International Competition 93 I. Goods and Works and non-consulting services. 1. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement: Procurement Method Prior Review Threshold Comments 1. ICB and LIB (Goods) >=750,000 All Contracts 2. ICB (Works/Supply & Installation) >=5,000,000 All Contracts 3. ICB (Non-Consultant Services) >=750,000 All Contracts 4. Direct Contracting All Values All Contracts 5. NCB (Goods) <750,000 None 6. NCB (Works) <5,000,000 None 7. Shopping <=50,000 None (a) List of contract Packages which will be procured following ICB and Direct contracting. (b) ICB Contracts estimated to cost above US$750,000 (Goods) and US$5,000,000 (Works / Supply & Installations) equivalent or more per Contract and all Direct Contracting will be subject to prior review by the Bank. 2. Prequalification.­NONE- 3. Proposed Procedures for CDD Components (as per paragraph. 3.17 of the Guidelines: NONE 4. Reference to (if any) Project Operational/Procurement Manual: (i) Project Implementation Manual; (ii) Procurement Manual 5 Any Other Special Procurement Arrangements: NA 6. Procurement Packages with Methods and Time Schedule 1 2 3 4 5 6 7 8 9 Ref. No. Contract Estimated Procurement P-Q Domestic Review Expected Comments (Description) Cost USD Method Preference by Bank Bid-Opening (yes/no) (Prior / Date Post) GEF/ Production of SLM 200,000.00 NCB NA POST 9/8 /2010 List of Items to SLM/GDS/ training materials, determined 01 guide books, SLM technology source books, etc. GEF/ Computers, Mapping 260,000.00 NCB NA POST 17/8/2010 List of Items to SLM/GDS/ Software for 62 determined 01 LGAs. Total 460,000.00 94 II. Selection of Consultants 1. Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants: Selection Method Prior Review Threshold Comments 1. QCBS (Firms) >=200,000 All Contracts 2. QBS >=200,000 All Contracts 3. Individual Consultants (IC) >=50,000 All Contracts 4. Single Source (SS) Firms/Individuals All Values All Contracts 5. Training All Values All contracts 6. CQS <100,000 None 7. LCS <100,000 None 2. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than US$200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 3. Any Other Special Selection Arrangements: None 4. Consultancy Assignments with Selection Methods and Time Schedule Ref No. Description of Assignment Estimated Selectio Review Expected Comments Cost n by Bank Proposals Method (Prior or Submission Post) Date Development of SLM Training Programme: land, water forest resources FAD/GEF Development of SLM training 01 programme and content of training material services IC Prior 27/8/2010 68,000.00 Training The Trainers Program FAD/GEF 6 Zonal SLM Trainers Services CQBS Prior 12/ 10/2010 02 300,000.0 0 Capacity Building Support for local governments: rural land use planning in 60 prioritized LGAs FAD/GEF Trainers/Facilitators for workshops IC POST 29/ 10/2010 03 16,500.00 Communication and Information Support National Level communication FAD/GEF Production of communication strategy, 04 including contents of communication message for different media channels IC Prior 24/9//2010 60,000.00 FAD/GEF Annual updates of communication 05 strategy and program IC Post 22/9/2010 14,500.00 Downstream Communication and Information FAD/GEF Radio/Television Slots CQ Post 8/10/2010 06 90,000.00 95 FAD/GEF Leave lets Posters print media CQ Prior 1/11/2010 07 108,000.0 0 Support National and state coordination on land and water management FAD/GEF Technical assistance back-stopping SLM 08 committee IC Post 27/10/2010 10,000.00 Knowledge Management and information FAD/GEF SLM Website Development and 09 maintenance IC Post 7/11/2010 15,000.00 Investment Alignment and Institutional Capacity Building FAD/GEF TA-Diagnostics CQ Post 15/10/2010 010 24,000.00 FAD/GEF Finalization of Investment Framework IC Post 5/11/2010 011 24,500.00 FAD/GEF Dissemination and Updates of Investment 012 Framework CQ Post 3/11/2010 6,000.00 M&E: SLM dimension FAD/GEF Track Composite Index IC Post 2010/2010 013 40,000.00 FAD/GEF Track SLM Adoption Rates IC Post 24/9/2010 014 20,000.00 FAD/GEF Develop Indicator Tool for local and 015 global environmental benefits CQS Post 14/10/2010 30,000.00 FAD/GEF Track Environmental benefits IC Post 4/9/2010 016 40,000.00 FAD/GEF Develop tool for tracking vegetation CQ Post 30/8/2010 017 cover and land degradation (NDVI or 30,000.00 NPP) FAD/GEF Track NDVI or NPP IC Post 15/9/2010 018 40,000.00 FAD/GEF TA-training, peer-review, advice on M&E IC Post 2/10/2010 019 15,000.00 National Technical Knowledge Base FAD/GEF Integration of geospatial tools in KB CQBS Prior 23/9/2010 020 117,000.0 0 Total 1,178,000. 00 III. Implementing Agency Capacity Building Activities with Time Schedule 1. In this section the agreed Capacity Building Activities (some items could be from CPAR recommendation) are listed with time schedule: To Be Determined S/ Dept Description of Partici- Designation Venue Perio Tuition Transport DSA Total Remarks N training pants d fee fare Cost 1 NFCO 6 Zonal SLM 36 SLM To be 3days ­­ ­­ ­­ 8,000 To be done Trainers: Start Coordinators deter- throughout up and midterm mined the year National workshop for National Coordination of 96 SLM Training of trainers program 2 NFCO Training 12 SLM Abuja 2 days ­­ ­­ ­­ 150,000 Period ­ workshops on Coordinators to be rural Land use determined planning at the Zonal level 3 NFCO National 6 Zonal Policy TBD 12 ­­ ­­ ­­ 30,000 To be done Awareness officers Makers. days throughout Workshops the year 4 NFCO Ratification of 6 SLM TBD 5 days ­­ ­­ ­­ 15,000 To be done the Coordinators throughout communication the year package 5 Annual program 6 SLM TBD 5 days ­­ ­­ ­­ 2,500 To be done review and Coordinators throughout approval the year ratification 6 NFCO Cross-learning 12 Zonal Within 3 days ­­ ­­ ­­ 16,000 and Coordinators the communication communicati State events on officers. 7 NFCO Policy workshop 12 NPC, Policy TBD ­­ ­­ ­­ ­­ 10,500 Period ­ to Makers be determined 8 NFCO Capacity 18 SLM TBD 3 days ­­ ­­ ­­ 7,000 Building for Committee SLM Committee & focal and focal points points 9 NFCO IT Training 3 IT Officials. TBD 3 days ­­ ­­ ­­ 5,000 10 NFCO Priority setting 6 SLM Within Variou ­­ ­­ ­­ 30,000 consultations Committee Nigeria s 11 NFC O Validation of 6 SLM Within 3 days ­­ ­­ ­­ 14,000 Investment Committee Nigeria Framework 12 NFCO Capacity 6 M&E TBD 5 days ­­ ­­ ­­ 60,000 building on Officials M&E tools Total 347,000 97 Annex 9: Incremental Cost Analysis NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Project approach, Global Environment Objectives and Expected Outputs 1. The global environment objective of the GEF incremental grant is to reinforce capacities of stakeholders to reduce the threat of land degradation and climate risks on ecosystems in participating communities.30 2. Nigeria has approximately 76 million rural land users that depend directly on livestock, rain-fed agriculture, forestry, and other rural land use for their livelihoods. These livelihoods are severely affected by degradation of land, water and forest resources and associated effects on land productivity. This is thought to amplify with climate change and variability. The 1990 Global Assessment of Soil Degradation31 estimated that 27 percent of Nigeria's land had degraded sufficiently to affect productivity. Yields have indeed remained stagnant since then, with Nigeria's agricultural growth coming predominately from conversions of forest, wetlands and woodlands into cropland. Land degradation is further undermining ecosystem services provided by productive lands. (See detailed analysis on the status of land degradation in Nigeria and the importance of land productivity in Annex 1). 3. As a signatory to the UN Convention to Combat Desertification (UNCCD), and the United Framework Convention on Climate Change (UNFCC), and the Convention on Biological Diversity (CBD), the Government of Nigeria has committed to sustainable management of land, water, forests, and other natural resources and to safeguard ecosystem services that underpin the livelihoods of rural land users in the country. Earlier efforts of the Government to respond to the threats of land degradation experienced major obstacles related to fragmented institutional coordination, inadequate capacities, overlapping mandates, and incoherent policy coupled with gaps in resource knowledge and inadequate access of land users to quality advisory and extension services for land use practices and techniques. (See detailed barrier analysis in Annex 1). 4. Recognizing the importance to invest in the maintenance and improvement of land quality as an asset for securing agricultural productivity, rural livelihoods, and non-oil economic growth, the Government of Nigeria entered into a dialogue with the Bank to devise a more strategic approach to address the intertwined risks related to land degradation, food security and climate change. The Government is now actively engaging a broader coalition of line Ministries and other partners across sectors to develop a more coordinated and harmonized approach for financing and scaling up SLM, with technical assistance from the TerrAfrica partnership, in which the GEF has played a key role in funding the Strategic Investment Program for SLM in Sub-Saharan Africa (SIP). The proposed GEF incremental grant, funded out of the SIP envelope, 30 The project development objective of the existing approved credit (with which the GEF incremental support will integrate) is to increase the incomes of users of rural land and water resources. 31 The Global Assessment of Human Induced Soil Degradation (GLASOD) was conducted by the International Soil Reference and Information Centre (ISRIC) at Wageningen University, Netherlands, commissioned by UNEP. Soil scientists were asked to categorize soils degraded over the past 45 years due to human intervention. GLASOD is one of the most widely cited analyses on land degradation available. 98 supports the development of the country's emerging investment platform on SLM, anchored in Nigeria's strategic investment framework for SLM. 5. Scaling Up SLM Practice, Knowledge and Coordination will be an incremental GEF grant focused on mainstreaming SLM in Nigeria's agricultural sector by improving the enabling environment for SLM. The Third National Fadama Development Project (Fadama III) is the baseline operation, which is a $450 million investment project that is increasing rural income and reducing poverty in rural areas nationwide via community-driven smallholder agricultural development and alternative livelihoods. This project has evolved into a large-scale national community-driven rural development program different from the predecessor operations, which focused on floodplain agriculture in a limited number of States. 6. Of this $450 million, $99.1 million is considered direct co-financing to the GEF increment. (see table below). Fadama III directly reaches 2.2 million households, or approximately 12 million individuals, with a proven government-led implementation mechanism with nationwide reach and credibility. Fadama III is an important opportunity for mainstreaming SLM to secure long-term sector goals, and it is this aspect that the GEF support will focus on, while still leveraging a small amount of community driven micro-projects that can help strengthen a community of practice around SLM. The GEF grant will be fully integrated into and coordinated with the existing baseline Fadama III operation. The two projects share the same structure, institutional set-up, and implementation mechanisms. Project management costs are co-financed entirely by the baseline operation. This approach was taken to avoid any parallel implementation structures and to strengthen strategic mainstreaming of SLM in the government structures at all levels. 7. The GEF grant focuses squarely on improving the enabling environment necessary for greater adoption of SLM practices. This approach includes building capacity and awareness for SLM practice and policy at national, state, and local levels in order to stimulate demand for on-the-ground investments in the baseline operation that will improve or protect land productivity. In particular, the nearly four-year GEF incremental grant funds the development of a knowledge support network and SLM information system, strengthens the institutional environment for investment programming at local, State and Federal levels, improves monitoring of land productivity and adoption of SLM practice, raises capacity of 62 local governments to carry out land use planning, supports a communications program on SLM, and promotes inclusion of SLM practices and alternative livelihoods strategies into the Local Development Plans (LDPs) of at least 10 percent of communities. The GEF increment also establishes a new innovative grant facility that reinforces awareness raising and mutual learning via community driven micro-projects. This facility is the Community SLM Award, which provides grants (in the form of a follow-on micro-project for those communities with proven implementation success with a first round of projects funded under the baseline loan) for up to 185 participating and eligible communities that successfully implement an existing SLM micro- project identified in their LDPs. 8. Consistency with GEF programming. The Project will directly contribute to the implementation of the GEF-4 Land Degradation Focal Area Strategy as listed below: SO-1: An Enabling Environment will place SLM in the mainstream of development policy and practice at regional, national and local levels; 99 SO-2: Mutual benefits for the global environment and local livelihoods through catalyzing SLM investments for large-scale impact. SP-1: support to sustainable agriculture and rangeland management 9. In accordance with the GEF LD strategy, the focus is to mainstream and upscale sustainable land management practices as part of a program of investments in rural livelihoods by using a proven demand-driven delivery mechanism and by supporting local development planning and capacity building for SLM across local, state and national institutional support structures. 10. This project incorporates the principles set out in the Strategic Program 1 of the GEF Land Degradation Focal Area Strategy, and seeks to build a policy and institutional environment conducive to prevention and control of land degradation and effective actions on the ground, that protect ecosystem functions, such as carbon stocks and fresh water availability, and simultaneously improving livelihoods of rural land users including their ability to adapt and cope with the effects of climate change impact. 11. Consistency with the GEF Strategic Investment Program for SLM in Sub-Saharan Africa (SIP). The GEF financing will be drawn from the envelope secured for Sub-Saharan Africa by the Bank-led multi-agency SIP, which is a key activity of the AU-NEPAD TerrAfrica partnership. As such, the Project conforms to the SIP principles32 and delivers on the SIP goal, objectives, and SIP intermediate results 2, 3, and 4, as follows: · Alignment with SIP result 1 (upscaling SLM on the ground): Financing for this is covered by IDA and counterpart resources under the baseline loan, and not GEF resources in this incremental project. GEF support will stimulate uptake of SLM by communities by improving the enabling environment, access to knowledge, and ecological monitoring of land resources. · Alignment with SIP result 2 (enabling environment): Institutions at federal, state, and local levels are better equipped to manage SLM programs and projects, plan and monitor across sectors on integrated approaches, and partner with communities to implement SLM. · Alignment with SIP result 3 (extension): Advisory services have greater capacity to promote SLM practice. · Alignment with SIP result 4 (knowledge and M&E): Better support given for benchmarking, and decision-making at all levels, via the development and implementation of an integrated knowledge management and M&E system with associated monitoring tools, and communication/dissemination strategy and materials. Incremental Analysis 32 The SIP principles are: (i) Country has demonstrated commitment to the SLM related objectives of NEPAD's environment and agriculture programs (CAADP, EAP) and the ECOWAS Implementation Action Plan; (ii) The operation contributes to reaching SIP results; (iii) The operation commits to using harmonized indicators and benchmarks to measure SLM scale up and progress toward established goals at regional program level; (iv) The operation exceeds the 1:4 financial leveraging ratio for SIP operations (GEF: non-GEF). The SIP is a key activity in the TerrAfrica joint work program, in which the Bank, Nigeria, GEF and NEPAD actively participate. 100 12. Baseline Scenario: The baseline loan would not adequately address the root causes and main barriers in the enabling environment that have thus far limited the scaling up of SLM knowledge and practices in Nigeria and dampen efforts to counter the ongoing trend of land degradation, which is being amplified by climate variability. The development priority of the baseline scenario is to increase the income of rural land users by delivering demand-driven resources for livelihood activities, mostly agricultural, and by empowering local community groups to better access extension support and advisory services aimed to increase rural productivity. However, as a result of the single sector approaches that would be applied under the baseline scenario, the environmental sustainability dimension of increased rural productivity would be limited. Focus of investments would lie on income-generation and livelihood improvements, social capital development, physical infrastructure development for productive use, food security, and related transfer and adoption of technological know-how. Yet, there would be insufficient stimulus to adopt a more integrated and holistic approach for investments in sustainable agricultural, livestock, or agroforestry production systems and thus little impact in reversing or preventing existing land degradation threats to cropland, rangeland, and woodlands. Knowledge fragmentation would continue to limit opportunities for adoption of improved land management practices at local level. Instead, community-driven investments would likely concentrate on acquisition of productive assets, promotion of post-harvest technologies for value addition, as well as support for improved market access. 13. Without GEF support, awareness of SLM as a solution to land degradation and climate risks would remain under the radar as they currently are now. Insufficient focus would be placed on building an enabling environment at national, state and local levels. As 2.2 million communities across the country prepare their Local Development Plans under the baseline project, SLM will likely not feature as strongly as it could. 14. Without GEF support, current fragmentation and weaknesses of knowledge and data, policies, stakeholders and investments would continue to undermine efforts to secure sustainable tangible and intangible ecosystem services from more integrated approaches to land and water management or efforts to protect the soil and vegetation cover. This challenge would continue to face communities in diverse settings and agro-ecologies nationwide, from Sahelian systems in the Northeast to tropical forest in the Southeast. A strong community of practice on SLM would likely not emerge without GEF participation, and chances for arresting land degradation by scaling up SLM practice using proven community-driven approaches would recede. 15. Although the community demand-driven design of the baseline project in principle does not prohibit opportunities for channeling investments into land sustainability, very limited investments would be expected, as the baseline project was not designed to remove key barriers limiting the current enabling environment for SLM, and SLM investments can take more than two growing seasons to realize return on investment ­ which undermines incentives for adoption by poor smallholder farmers. As such, GEF support is needed to amplify awareness building, knowledge fertilization, and so on described below in order to influence community demand for SLM. As confirmed by a barrier analysis carried out during project preparation (see Annex 1 for more details), fragmented institutional coordination, awareness, profitability, and knowledge gaps constitute major impediments for increased uptake of SLM activities or other profitable entrepreneurial activities that would help to alleviate land degradation impacts. 101 16. GEF Alternative Scenario: The response to threats to Nigeria's land resource has previously fallen short of the country's expectations due to an entrenched set of barriers in the enabling environment that prevented addressing land degradation at meaningful scale. Land degradation challenges are expected to amplify in the face of on-going climate change and variability (see Annex 15). This issue will be addressed under the GEF alternative by enhancing capacities and knowledge to promote greater adoption of SLM practices than would otherwise be the case under the baseline loan without GEF involvement. 17. The GEF Alternative was strategically designed towards maximum mainstreaming and leveraging impact related to the CDD investment mechanism of the baseline rural development project. Incremental project activities of this partially blended operation respond directly to the barriers identified and will assist the Government in improving the enabling environment for SLM investments. Specific objectives of the GEF incremental grant include: 18. Facilitating the establishment of a community of SLM practitioners, supported by awareness raising, capacity building, knowledge and M&E services, and consistent with local development planning processes (Incremental funding for Components 1 and 6). 19. Strengthening institutions charged with management of land resources, at Federal, State, and local government level, including by reinforcing the Nigeria's cross-sectoral coordination platform for investment and policy on land use and management (Incremental funding for Components 1 & 6). 20. Incremental GEF activities are by and large geared to promote uptake and implementation of SLM investments nationwide. In particular, the GEF incremental grant will: promote rural land use planning, support identification of income generating options to conserve or rehabilitate production land, mainstream SLM practices in planned investments in agricultural production systems, finance a competitive community-driven grant facility to reward successful implementation of communities' SLM sub-projects financed under the baseline project. This will help raise awareness on the benefits of SLM practices, embed additional SLM activities into Local Development Plans (a key strategy of the baseline loan), and to increase land investments that secure public environmental goods, build a network of community practitioners that can serve as agents of change and foster increased interest in viable SLM activities, improve land quality monitoring at the local and national level, and enhance institutional capacities to carry out multi-sector investment programming. As a result, incremental support will further enrich the environmental agenda of the existing baseline project as well as strengthen the baseline loan's long-term replicability and sustainability post-Project. 21. At the policy and planning level, GEF support will help catalyze the emergence of a national SLM platform over time, with state level platforms. Together this will form the nucleus of a nationwide partnership on land that would be well positioned inside the agricultural productivity and climate change agendas that are now receiving very high visibility domestically and internationally. This will help to mainstream SLM and consolidate the currently fragmented enabling environment for SLM described above. The National SLM Committee, chaired by the agriculture ministry and involving finance, planning, environment, and met services, is liaising downstream with all State governments to promote the process of establishing SLM Sub- Committees at the State level. This emerging SLM platform is an excellent vehicle to advance and finance good experience learned from within this Project and in other projects. 102 Global Environmental Benefits 22. GEF financed activities will leverage increased interest, understanding, and demand of communities for investments in land management practices that generate dual benefits in terms of improved livelihoods over the short-term, and improved maintenance of ecosystem functions that from the basis of sustained land productivity over the long term. With the focus of GEF investments on improving the enabling environment for SLM, the incremental reasoning of this Project relies mainly on the baseline project, Nigeria's well owned flagship rural development program, as a delivery mechanism for substantial investments in land productivity on the ground. 23. Mainstreaming SLM practices in community-driven rural development investments nation-wide will contribute to halt and reverse community-perceived trends of land, water, and forest degradation. This focus on the community is critical to successfully implement and achieve local and global benefits. The resulting global benefits will be based on improved ecosystem functions and services including off-site benefits of a public good dimension. 24. Global benefits will include the increase in carbon stocks in soil and vegetation as a result of improved soil conservation and integrated fertility practices, as well as from protection and more efficient use of biomass. Better vegetation cover in and around croplands and rangelands, as well as avoided deforestation in areas not yet under intensive productive use, largely but not only in the east, will further improve the infiltration capacity of the land and provide improved fresh water availability. Global benefits will cut across the different GEF focal areas, with improved above and below ground biodiversity in the productive landscape as a result of improved land management and vegetative cover. Transboundary benefits will be achieved in terms of reduced sedimentation of transboundary water courses and damage caused due to wind erosion and sandstorms in the north. 25. GEF support will further invest in enhancing knowledge of farmers related to adaptive land management practices as well as diversified livelihood systems, both of which will enhance the ability of communities to adapt to climate change and climate variability. Studies on climate risk perceptions (see details in Annex 15) demonstrated that increased access to climate adaptation information encouraged farmers to diversify livelihoods and to adopt SLM. On the ground, communities perceived climate variability in terms of changing weather patterns and land degradation incidence. For many community members, land degradation and climate risk are the same agenda. 26. Global environmental benefits generated will be closely intertwined with local economic benefits depending on the type of SLM practices selected by local beneficiary communities (see Annex 4 para 17 for the table of eligible SLM practices). Various SLM technologies have the potential to deliver viable economic returns in terms of food, fuel, fiber, or fodder produced that are competitive with other less sustainable production investment. The attractiveness of the different SLM practices varies according to the agro-ecological zone, the exposure to climate risks as well as the status of land degradation. As such, the key to successful up scaling of SLM practices is to provide capacity building and knowledge creation that is custom-tailored to the different agro-ecological zones and production systems of Nigeria and aligned with social standards in the different regions. Increased incomes may not only result from improved land 103 productivity, but also from added value from alternative and diversified income activities, which further increase climate resilience. Incremental Costs 27. The total project cost under the baseline scenario, where only the Fadama III project based on the IDA credit will be implemented, is US$99.10 million. The total cost under the GEF alternative is US$105.9 million. The incremental cost under the GEF alternative is, therefore, US$6.8 million, corresponding to GEF incremental financing of 6.42 percent of total project cost. Although the GEF contribution in such a large-scale project is relatively meager, the catalytic influence given to the GEF involvement to date in this operation has outsized the financial contribution, which bodes well for implementation. 104 Table 1: Incremental Cost Analysis Component Category Estimated Local Benefit Global Benefit Expenditures (US$ million) GEF Component A: Baseline 87.50 Improved social Reduced conflict amongst rural Capacity Building, capital through land users through social Local Government, mobilization of inclusion and community-driven and Communication communities in principles for development of and Information socially inclusive local development plans. Support community organizations. Corresponds to Increased capacity of baseline component 1: local governments to Capacity Building, respond to Local Government, community needs. and Communication Innovations in and Information community-level Support planning and integration of community plans in local government planning. With GEF 93.50 Same as above. Improved enabling environment Alternative for up-scaling of SLM resulting from: Increased awareness and knowledge of stakeholders at local, state, and federal level related to the benefits of SLM in terms of enhanced land productivity and sustainability as well as increasing adaptation capacity to climate change. More effective land use planning capacity at the local government level taking into account land capability and environmental sustainability aspects. Strengthened capacity of extension services to supply communities with knowledge and capacity building on SLM practices relevant for the different agro-ecological zones; Improved mainstreaming of SLM in policy dialogue and investment planning. More communities include SLM in their own Local Development Plans (LDPs), and as a result, more local governments include these (LDPs) in their economic planning. Greater grassroots control of the land agenda in Nigeria. Incremental 6.00 GEF Component B: Baseline 11.60 Improved project Improved availability of and Monitoring and (includes only management for access to knowledge on 105 Evaluation, and M&E and project productive and land Knowledge knowledge) implementation, conservation practices specific efficient to Nigeria's agro-ecological administration of zones as a result of the Corresponds to project funds, establishment of a Technical baseline component 6: improved Knowledge Base, reinforced Project Management, coordination with with a Management Information Monitoring and implementing System. Evaluation, and institutions, Knowledge monitoring of results indicators for project progress and impact With GEF 12.40 Same as above. Estimates of global Alternative environmental benefits (Note: no GEF generated available; including resources given carbon sequestration below and toward project above ground, biomass change, administration) and aggregate land degradation and climate risk threat reduction. SLM Information system institutionalized in government planning. Incremental 0.80 Total Baseline* 99.100 *includes $2.7m in preparation funds With GEF 105.900 Alternative Incremental 6.800 106 Annex 10: Safeguard Policy Issues NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Potential Long-term Impacts 1. This is a Category B project because, though the current program is likely to mostly involve moderate environmental and social impacts, some of the candidate sub-projects in the future may have significant adverse environmental impacts that are sensitive, diverse, cumulative, irreversible or unprecedented typical of Category A projects. However, during project preparation, the exact locations and potential impacts were not known in sufficient detail. Therefore, in December, 2009, the FGN reviewed, updated and disclosed Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF) and Pest Management Plan (PMP) that were prepared under Fadama III (which is the baseline Project that the GEF grant is incrementally supporting). The RPF addresses possible involuntary physical and economic displacement of the program's sub-projects. The ESMF outlines the process and procedure to be followed when a project has the potential to trigger any of the World Bank safeguard policies. The ESMF contains details of the existing environmental laws and regulatory framework in the country; World Bank safeguard policies, analysis of environmental and social impacts including alternatives; institutional arrangements for implementing the ESMF, capacity building needs; and public consultation carried out during project preparation. In addition, the ESMF contains a detailed checklist for screening all sub-projects for their potential environmental and social impacts to determine: (i) Environmental Assessment (EA) category; (ii) applicable World Bank environmental and social safeguards policy triggers; (iii) potential for environmental and social impacts liability; (iv) cultural or other sensitivities; (v) relevant stakeholders; and (vi) the nature and extent of engagement for each stakeholder category. Finally, the ESMF contains an annex on a generic ToR for conducting an ESIA if and when required. 2. The overall environmental and social impacts of the project are expected to be positive. However, since it is completely integrated with Fadama III, the incremental SLM Project has been classified as a B Category, meaning that the potential adverse environmental and social impacts are minor, site specific, non-cumulative, easily remediable and site-specific. The potential environmental impacts may occur on new community infrastructure development, small-scale irrigation, ground water extraction and horticultural and livestock production. In addition, Fadama III has potential for intensive agriculture and could result in increased use of pesticides and herbicides, thereby triggering the Bank's Pest Management Policy. Furthermore, while no large scale land acquisition is envisaged, nevertheless, project activities may lead to loss of land or prevention of access to usual means of livelihood. Thus, the Involuntary Resettlement Policy is also triggered by the incremental SLM project. 3. Under Fadama III, the following safeguards instruments were prepared: Environmental and Social Impact Assessment (ESIA); Pest Management Plan (PMP); and Resettlement Policy Framework (RPF). As part of the ESIA, an Environmental and Social Management Framework (ESMF) was developed with a checklist for screening sub-project activities in order to identify those sub-projects that will need to undergo a partial or full environmental and social assessment. During the preparation of the incremental SLM project, the ESMF and PMP were reviewed, 107 updated and re-disclosed countrywide in Nigeria and at World Bank InfoShop in December 2009. Project Location and Salient Physical Characteristics Relevant to the Safeguard Analysis 4. The incremental GEF grant is generally aligned with the national scope of the baseline project in terms of policy input, improved multi-sector investment planning, knowledge generation and dissemination, SLM technology guidance, and land quality monitoring. However, GEF financed activities implemented at the state level focus on those 30 States plus the FCT that do not yet have institutional structures for cross-sectoral coordination on SLM in place. The other six States not covered (Imo, Kebbi, Kwara, Kogi, Ogun, and Bauchi), already have state- level watershed committees in place, which serve as sub-committees to the National SLM Committee that is supported with the GEF incremental project. These six States are receiving GEF grant funding under a previous project phase and are thus excluded from additional GEF investments. Measures Taken by the Borrower to Address Safeguard Issues 5. At appraisal, the exact locations and potential adverse impacts were not known in sufficient details. The borrower reviewed, updated the ESMF, RPF and PMP that were prepared under Fadama III. These three safeguards instruments have been and re-disclosed countrywide in Nigeria and at World Bank InfoShop. The ESMF, RPF and PMP were prepared for the purpose of identifying and mitigating foreseeable negative environmental and social impacts during implementation. In particular, the ESMF was developed with a checklist to screen sub-project activities in order to identify those sub-projects that will need to undergo a partial or full environmental and social assessment. The RPF contains details of the principles and objectives governing resettlement action plan preparation, review and approval of RAPs, screening for Involuntary Resettlement, establishment of baseline and socioeconomic data, preparation of resettlement action plans, and the likely categories of project affected persons. In addition, the RPF also contains methods of identifying of project affected persons, including criteria and eligibility for compensation of various categories of project-affected persons, methods to determine the cut-off dates, institutional framework and methods of valuing affected assets in lieu of compensation and procedures for delivery of compensation. Compensation arrangements for those being involuntarily resettled, including possibilities for land exchange is outlined in the RPF. In particular, the RPF also contains mechanism for resolving disputes that may arise. Grievance Redress Mechanism 6. The grievance redress procedure provides a mechanism to mediate conflict and reduce lengthy litigation, which often causes delay in infrastructure projects. It will also provide people who might have objections or concerns about their assistance a public forum to raise their objections and, through conflict resolution, ensure issues are adequately addressed. The grievance procedure adopted for the incremental SLM project will be simple, and administered as far as possible at the local and State levels to facilitate access, flexible and open to various proofs, taking into cognizance the fact that most people are illiterate, and will entail a speedy, just and fair resolution of their grievances. Instructional Arrangement for Implementation of Safeguard Policies 108 7. The National Fadama PMU will be responsible for the implementation of the ESMF, RPF and PMP. Consultants will be recruited to prepare environmental management plans resettlement Action plan as and when necessary. The National Fadama PMU has an Environmental Specialist who is responsible and accountable for all safeguards issues of the project. At the State level, Environmental Officers in the Fadama offices responsible for safeguards compliance. They will be supported by consultants that will be engaged as and when needed. Additional guidance and capacity building will be provided by the environmental and social safeguard specialists in the World Bank team as required. Capacity Strengthening 8. Capacity strengthening for key participating institutions in the project will include best practices in EIA, EMP, RAP, integrated pest management procedures, conflict resolution and sustainable resource management. Monitoring and Evaluation 9. In accordance with Nigerian regulations and World Bank safeguards policies, monitoring and periodic environmental and social auditing will take place at every institutional level of the incremental SLM GEF project and its baseline Fadama III project. However, the monitoring will be cost effective and the major variables, such as, wetland integrity, soil quality and water quality and quantity as well as percentage of agricultural land under SLM will all be cost effective and efficient monitoring approaches. 109 Annex 11: Project Preparation and Supervision NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Planned Actual PCN review 02/28/2008 01/22/2008 Initial PID to PIC 03/09/2009 10/27/2009 Initial ISDS to PIC 03/09/2009 10/27/2009 Appraisal 03/29/2010 03/29/2010 Negotiations 05/08/2010 06/01/2010 Board/RVP approval 06/29/2010 Planned date of effectiveness 10/29/2010 Planned date of mid-term review 07/01/2011 Planned closing date 12/31/2013 Key institutions responsible for preparation of the project: Federal Ministry of Agriculture and Water Resources (FMAWR)33 Federal Ministry of Environment (FME) Federal Ministry of Finance (FMF) National Planning Commission (NPC) Bank staff and consultants who worked on the project included: Name Title Unit Simeon Ehui Task Team Leader (original) AFTAR Adubi Abimbola Task Team Leader (current) and AFTAR Sr. Agricultural Specialist Stephen Danyo Natural Resources Management AFTEN Specialist Lucas Akapa Senior Operations Officer AFTAR Amos Abu Sr. Environmental Specialist AFTEN Chukwudi Okafor Sr. Social Development AFTCS Specialist Africa Olojoba Sr. Environmental Specialist AFTEN Akinrinmola Oyenuga Akinyele Financial Management Specialist AFTFM Sunday Acheneje Procurement Specialist AFTPC Manush Hristov Sr. Counsel LEGAF Modupe Dayo Olorunfemi Team Assistant AFCW2 Ngozi Malife Team Assistant AFCW2 Chita Oje Team Assistant AFCW2 Azra Lodi Sr Program Assistant AFTAR Marie Claudine Fundi Language Program Assistant AFTAR Nina Doetinchem Consultant AFTEN Chika Ezeanya Consultant AFTEN 33 As of May 2010, the FGN is in the process of splitting the FMAWR into two entities. The new FMARD is now considered the implementing federal ministry for this Project as well as the baseline Fadama III Project. 110 Daniel Sellen Peer Reviewer AFTAR Foluso Okunmadewa Peer Reviewer AFTSP Bank funds expended to date on project preparation: 1. Bank resources: BBGEF: 130,385.22 BBFAO: 46,200.00 2. Trust funds: 0 3. Total: 176,585.22 Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$5,000 2. Estimated annual supervision cost: US$75,000 111 Annex 12: Documents in the Project File NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Project documentation 1. Fadama III Project Implementation Manual (2010) 2. SLM addendum to Fadama III Project Implementation Manual (Draft April 2010) 3. GEF Project Information Form (2008) 4. Project Cost Tables 5. Fadama III Supervision Plan Safeguard documents 6. ESMF 7. PMP 8. RPF 9. Riparian Notification and Non-Objection Studies 10. World Bank, Review of costs, benefits and public spending on land management options in Nigeria (2010) 11. World Bank, Managing Land in a Changing Climate: An Operational Perspective for Sub- Saharan Africa (Nigeria case studies) (2010) 12. NFCO, Community perception of weather variability and coping strategies (2009) 13. NFCO, Description of present day climatic conditions and summary and assessment of projected climate changes (2009) 14. NFCO, Communications Support for Sustainable Land Management at the Country Level 15. NFCO, Conducting Monitoring & Evaluation and MIS (2009) 16. NFCO, Indicator development: Household Welfare Assessment (SLM module) (2009) 17. NFCO, Indicator development: Soil quality (2009) 18. NFCO, Indicator development: Vegetation cover (2009) 19. NFCO, Assessment of SLM Enabling Environment (2009) 20. World Bank, Updated Baseline Figures and Targets for the Key Performance Indicator for SLM, Nigeria (2010) 112 Annex 13: Statement of Loans and Credits NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd P117088 2010 Fin Sec + Pub Fin Mgmt DPC 0.00 500.00 0.00 0.00 0.00 500.99 0.00 0.00 P090644 2009 NG-Comm. Social Dev. (FY09) 0.00 200.00 0.00 0.00 0.00 187.16 17.67 0.00 P096572 2009 NG-Fadama Development-III SIL (FY08) 0.00 250.00 0.00 0.00 0.00 226.34 32.69 0.00 P096648 2009 NG-Commercial Agriculture Development 0.00 150.00 0.00 0.00 0.00 156.27 0.85 0.00 P102119 2009 NG-HIV/AIDS Prog. Dev. II (FY09) 0.00 225.00 0.00 0.00 0.00 231.50 0.00 0.00 P106172 2009 NG-Electricity and Gas Improvement 0.00 200.00 0.00 0.00 0.00 206.87 0.00 0.00 P106280 2009 NG-Lagos Eko Secondary Education 0.00 95.00 0.00 0.00 0.00 99.14 3.33 0.00 (FY09) P090135 2008 NG-Federal Roads Development 0.00 330.00 0.00 0.00 0.00 315.42 8.87 0.00 P072644 2008 NG-Rural Access & Mobility - Ph. 1 0.00 60.00 0.00 0.00 0.00 56.31 4.71 0.00 P071340 2007 NG-Lagos Metropolitan Dev & 0.00 200.00 0.00 0.00 0.00 178.00 45.15 0.00 Governance P097921 2007 NG-Malaria Control Booster Project (07) 0.00 280.00 0.00 0.00 0.00 212.85 -4.68 0.00 P096151 2007 NG - State Edu Sector Project 0.00 65.00 0.00 0.00 0.00 47.38 19.61 -2.05 P074132 2007 NG-S&T Educ in Post-Basic Ed (FY07) 0.00 180.00 0.00 0.00 0.00 150.46 100.93 0.00 P100122 2006 Avian Influenza Emergency ERL (FY06) 0.00 50.00 0.00 0.00 0.00 8.81 5.58 -1.68 P090104 2006 NG-Natl Energy Dev SIL (FY06) 0.00 172.00 0.00 0.00 0.00 98.19 87.80 -0.96 P071391 2006 NG-Natl Urb Water Sec Ref SIM 2 (FY06) 0.00 200.00 0.00 0.00 0.00 151.86 64.80 0.00 P086716 2005 NG-Min Res Sustain Mgmt (FY05) 0.00 120.00 0.00 0.00 0.00 57.21 40.47 0.00 P088150 2005 NG-Econ Reform & Govern SIL (FY05) 0.00 140.00 0.00 0.00 0.00 87.32 71.48 6.60 P074447 2005 NG-State Governance & Cp Bldg TAL 0.00 18.10 0.00 0.00 0.00 10.46 10.09 10.07 (FY05) P083082 2004 MSME 0.00 32.00 0.00 0.00 0.00 16.91 14.45 6.59 P063622 2004 NG-Fadama SIL 2 (FY04) 0.00 100.00 0.00 0.00 0.00 3.50 -0.88 0.00 P071075 2004 NG-Urb Water Sec Reform 1 SIL (FY04) 0.00 120.00 0.00 0.00 0.00 43.90 36.30 0.00 P074963 2003 NG-Lagos Urb Trans SIL (FY03) 0.00 150.00 0.00 0.00 0.00 34.99 -30.68 15.98 P080295 2003 NG-Polio Eradication (FY03) 0.00 130.40 0.00 0.00 0.00 13.86 -85.92 -19.06 P070291 2002 NG-HIV/AIDS Prog Dev (FY02) 0.00 140.30 0.00 0.00 0.00 29.77 -36.54 5.55 P070290 2002 NG- Health System Dev. II (FY02) 0.00 217.00 0.00 0.00 0.00 86.53 -28.63 -28.19 P069901 2002 NG-Com Based Urb Dev (FY02) 0.00 110.00 0.00 0.00 0.00 62.70 64.30 36.79 P070293 2001 NG-Privatization Supt SIL (FY01) 0.00 114.29 0.00 0.00 0.00 39.08 17.95 18.00 Total: 0.00 4,549.09 0.00 0.00 0.00 3,313.78 459.70 47.64 113 NIGERIA STATEMENT OF IFC's Held and Disbursed Portfolio In Millions of US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1999 AEF Global Fabri 0.32 0.00 0.00 0.00 0.32 0.00 0.00 0.00 1999 AEF Hercules 1.30 0.00 0.00 0.00 1.30 0.00 0.00 0.00 2000 AEF Oha Motors 0.84 0.00 0.00 0.00 0.84 0.00 0.00 0.00 2000 AEF SafetyCenter 0.41 0.00 0.00 0.00 0.41 0.00 0.00 0.00 1995 AEF Vinfesen 0.00 0.00 1.00 0.00 0.00 0.00 1.00 0.00 1994 Abuja Intl 1.75 0.00 0.00 0.00 1.75 0.00 0.00 0.00 2005 Accion Nigeria 0.00 1.89 0.00 0.00 0.00 0.57 0.00 0.00 2003 Adamac 25.00 0.00 0.00 15.00 11.56 0.00 0.00 6.94 2000 CAPE FUND 0.00 6.17 0.00 0.00 0.00 5.76 0.00 0.00 2001 Delta Contractor 0.00 0.00 15.00 0.00 0.00 0.00 0.20 0.00 2000 Diamond Bank 0.00 0.00 2.00 0.00 0.00 0.00 2.00 0.00 2005 Diamond Bank 0.00 0.00 30.00 0.00 0.00 0.00 30.00 0.00 2006 Diamond Bank 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.00 2000 FSB 5.25 0.00 3.75 0.00 5.25 0.00 3.75 0.00 1992 FSDH 0.00 0.86 0.00 0.00 0.00 0.86 0.00 0.00 2000 GTB 6.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 2004 GTB 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2005 GTB 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2006 GTB 30.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 GTFP Access Bank 33.58 0.00 0.00 0.00 33.54 0.00 0.00 0.00 2006 GTFP Access Bank 0.00 0.00 15.00 0.00 0.00 0.00 0.00 0.00 GTFP Diamond Bnk 30.28 0.00 0.00 0.00 29.38 0.00 0.00 0.00 GTFP GTB Nigeria 20.41 0.00 0.00 0.00 20.41 0.00 0.00 0.00 GTFP IBTC Plc. 5.03 0.00 0.00 0.00 4.69 0.00 0.00 0.00 GTFP Zenith 32.18 0.00 0.00 0.00 32.18 0.00 0.00 0.00 2000 IBTC 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2006 IBTC 0.00 0.00 30.00 0.00 0.00 0.00 0.00 0.00 1981 Ikeja Hotel 0.00 0.06 0.00 0.00 0.00 0.06 0.00 0.00 1988 Ikeja Hotel 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 2002 MTNN 70.00 15.00 0.00 0.00 40.00 14.56 0.00 0.00 2002 NTEF 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2005 OCC 75.00 0.00 0.00 0.00 59.12 0.00 0.00 0.00 2006 SOCKETWORKS 0.00 0.00 2.50 0.00 0.00 0.00 1.88 0.00 2004 UPDC Hotels Ltd. 10.62 0.00 0.00 0.00 4.82 0.00 0.00 0.00 Total portfolio: 427.97 23.99 119.25 15.00 311.57 21.82 38.83 6.94 Approvals Pending Commitment 114 FY Approval Company Loan Equity Quasi Partic. 2006 UBA/STB 0.03 0.00 0.05 0.00 2005 Zenith Bank 0.03 0.01 0.00 0.00 2007 Eleme Petrochem 0.06 0.00 0.02 0.08 Total pending commitment: 0.12 0.01 0.07 0.08 115 Annex 14: Country at a Glance NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION Nigeria at a glance 12/9/09 S ub- Lo we r- P O V E R T Y a nd S O C IA L S a ha ra n m iddle - Development diamond* N ige ria A f ric a inc o m e 2008 P o pulatio n, mid-year (millio ns) 51 1 .2 818 3,702 Life expectancy GNI per capita (A tlas metho d, US$ ) ,1 1 70 1,082 2,078 GNI (A tlas metho d, US$ billio ns) 177.4 885 7,692 A v e ra ge a nnua l gro wt h, 2 0 0 2 - 0 8 P o pulatio n (%) 2.4 2.5 1.2 Labo r fo rce (%) 2.6 2.8 1.6 GNI Gross per primary M o s t re c e nt e s t im a t e ( la t e s t ye a r a v a ila ble , 2 0 0 2 - 0 8 ) capita enrollment P o verty (% o f po pulatio n belo w natio nal po verty line) .. .. .. Urban po pulatio n (% o f to tal po pulatio n) 46 36 41 Life expectancy at birth (years) 48 52 68 Infant mo rtality (per 1,000 live births) 96 89 46 Child malnutritio n (% o f children under 5) 27 27 26 Access to improved water source A ccess to an impro ved water so urce (% o f po pulatio n) 47 58 86 Literacy (% o f po pulatio n age 1 5+) 72 62 83 Gro ss primary enro llment (% o f scho o l-age po pulatio n) 93 98 109 Nigeria M ale 99 103 121 Lower-middle-income group Female 87 93 106 KE Y E C O N O M IC R A T IO S a nd LO N G - T E R M T R E N D S 19 8 8 19 9 8 2007 2008 Economic ratios* GDP (US$ billio ns) 22.8 32.1 165.9 207.1 Gro ss capital fo rmatio n/GDP .. .. .. .. Expo rts o f go o ds and services/GDP 23.1 33.5 41.0 41.6 Trade Gro ss do mestic savings/GDP .. .. .. .. Gro ss natio nal savings/GDP .. .. .. .. Current acco unt balance/GDP -10.9 -9.6 18.8 20.4 Interest payments/GDP 6.6 1.7 0.2 0.1 Domestic Capital savings formation To tal debt/GDP 129.6 94.2 5.2 5.4 To tal debt service/expo rts 29.5 1 1 .8 1.7 0.6 P resent value o f debt/GDP .. .. 4.8 4.8 P resent value o f debt/expo rts .. .. 1 1 .7 10.4 Indebtedness 19 8 8 - 9 8 19 9 8 - 0 8 2007 2008 2 0 0 8 - 12 (average annual gro wth) GDP 3.3 6.0 6.4 6.0 4.4 Nigeria GDP per capita 0.7 3.5 4.0 3.6 1.6 Lower-middle-income group Expo rts o f go o ds and services .. .. .. .. .. S T R UC T UR E o f t he E C O N O M Y 19 8 8 19 9 8 2007 2008 Growth of capital and GDP (%) (% o f GDP ) 12 A griculture .. .. 32.7 .. 9 Industry .. .. 40.7 .. 6 M anufacturing .. .. .. .. 3 Services .. .. 26.6 .. 0 Ho useho ld final co nsumptio n expenditure .. .. .. .. 03 04 05 06 07 08 General go v't final co nsumptio n expenditure .. .. .. .. GCF GDP Impo rts o f go o ds and services 22.0 38.1 25.9 24.7 19 8 8 - 9 8 19 9 8 - 0 8 2007 2008 (average annual gro wth) A griculture .. 7.0 7.4 .. Industry .. 3.8 -2.9 .. M anufacturing .. .. .. .. Services .. 14.4 12.9 .. Ho useho ld final co nsumptio n expenditure .. .. .. .. General go v't final co nsumptio n expenditure .. .. .. .. Gro ss capital fo rmatio n .. .. .. .. Impo rts o f go o ds and services .. .. .. .. No te: 2008 data are preliminary estimates. This table was pro duced fro m the Develo pment Eco no mics LDB database. * The diamo nds sho w fo ur key indicato rs in the co untry (in bo ld) co mpared with its inco me-gro up average. If data are missing, the diamo nd will 116 P R IC E S a nd G O V E R N M E N T F IN A N C E 19 8 8 19 9 8 2007 2008 Inflation (%) D o m e s t ic pric e s 35 (% change) 30 Co nsumer prices 54.5 10.3 5.5 1 1 .6 25 Implicit GDP deflato r 21.4 -5.6 4.8 1 .0 1 20 15 G o v e rnm e nt f ina nc e 10 5 (% o f GDP , includes current grants) 0 Current revenue .. 16.2 28.4 32.8 03 04 05 06 07 08 Current budget balance .. 5.8 8.4 1 1 .6 GDP deflator CPI Overall surplus/deficit .. -9.3 -1.1 3.6 TRADE 19 8 8 19 9 8 2007 2008 Export and import levels (US$ mill.) (US$ millio ns) To tal expo rts (fo b) 7,069 0,1 4 1 1 66,605 1 84,1 7 100,000 Fuel 6,456 9,218 58,164 74,304 80,000 Liquified natural gas .. .. 6,844 7,709 M anufactures 28 140 .. .. 60,000 To tal impo rts (cif) 6,393 10,269 30,440 36,885 40,000 Fo o d 505 1,397 .. .. 20,000 Fuel and energy 64 123 .. .. Capital go o ds .. .. .. .. 0 Expo rt price index (2000=100) 58 45 253 344 02 03 04 05 06 07 08 Impo rt price index (2000=100) 96 1 12 138 161 Exports Imports Terms o f trade (2000=1 00) 61 40 183 21 4 B A LA N C E o f P A Y M E N T S 19 8 8 19 9 8 2007 2008 Current account balance to GDP (%) (US$ millio ns) Expo rts o f go o ds and services 7,403 10,972 68,061 86,077 30 Impo rts o f go o ds and services 7,052 12,671 43,039 ,1 51 05 25 Reso urce balance 351 -1,700 25,022 34,972 20 15 Net inco me -2,904 -2,892 1 -1 ,853 -12,005 10 Net current transfers 63 ,51 1 6 1 6 8,01 19,295 5 Current acco unt balance -2,490 -3,075 31 85 ,1 42,262 0 -5 02 03 04 05 06 07 08 Financing items (net) 2,159 2,960 -22,150 -40,594 -10 Changes in net reserves 331 1 15 -9,035 -1,667 M emo : Reserves including go ld (US$ millio ns) .. .. 51,333 77,484 Co nversio n rate (DEC, lo cal/US$ ) 6.4 88.0 125.8 1 1 8.5 E X T E R N A L D E B T a nd R E S O UR C E F LO WS 19 8 8 19 9 8 2007 2008 Composition of 2008 debt (US$ mill.) (US$ millio ns) To tal debt o utstanding and disbursed 29,621 30,294 8,696 1 1 ,221 IB RD 2,728 2,278 381 211 A: 211 IDA 31 564 1,929 2,243 B: 2,243 To tal debt service 2,210 1,332 ,1 1 87 609 IB RD 429 467 201 205 IDA 1 4 35 37 D: 535 Co mpo sitio n o f net reso urce flo ws Official grants 36 33 1,321 843 E: 323 Official credito rs 72 -473 150 63 F: 453 G: 7,456 P rivate credito rs 150 -25 -31 2 -37 Fo reign direct investment (net inflo ws) 379 1,051 6,032 3,636 P o rtfo lio equity (net inflo ws) 0 0 1,447 -4,684 Wo rld B ank pro gram Co mmitments 793 0 685 887 Disbursements 244 221 335 353 A - IBRD E - Bilateral P rincipal repayments 196 314 196 209 B - IDA D - Other multilateral F - Private C - IMF G - Short-term Net flo ws 49 -93 139 144 Interest payments 235 157 41 34 Net transfers -187 -250 99 1 10 No te: This table was pro duced fro m the Develo pment Eco no mics LDB database. 12/9/09 117 Annex 15: Climate Risk Perceptions and Adaptation among Nigerian Farming Communities NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION "We in this community know that the climate is becoming drier every year. There seems to be gradual desert encroachment in our community. The land is becoming emptier, and even the grasses we used to have in the past for our livestock have started disappearing. Two years ago the River Jama'are overflowed its bank, destroying our fruits and vegetables estimated at 100 hectares." - Tahiru Mohammed, FGD discussant Jama'are Community, Bauchi state A. Background 1. Micro-level assessment of perception and adaptation to risks associated with climate change has become an important issue in the designing of projects and programmes that affect farmers especially in developing countries. The ability to perceive and detect climate and environmental change by African farmers may determine their adaptive response abilities. The assessment of farm-level adoption of adaptation strategies is important to provide information that can be used to formulate policies that enhance adaptation as a tool for managing a variety of risks associated with climate change in agriculture (IFPRI, 2006). The IPCC (2001) defines adaptive capacity as the ability of a system to adapt to climate change (including climate variability and extremes), to moderate potentials damages, to take advantage of opportunities, or to cope with the consequences. The goal of an adaptation measure should be to increase capacity of a system to survive external shocks or change. 2. Nigeria aims to invest in the maintenance or improvement of land quality ­ land being the key asset of the rural poor and, therefore, critical for securing farm productivity, livelihoods, income, and national economic growth. However, this may not be effectively achieved without a good knowledge of community level perceptions and adaptation strategies to risks associated with climatic change. 3. To improve investment programming and sustain the gains made by rural development, agricultural, and NRM investment, there is need to distill and compare the current level of perception and adaptation strategies of a range of smallholder farmers with the actual situation based on data and information from meteorological stations. Also there is need to assess the constraints limiting adoption of adaptive measures. Issues relating to perception, adaptation and constraints to adoption of adaptation strategies need to be made clearer through this type of micro-level study. A better understanding of farmers' perceptions regarding long-term climatic changes, current adaptation measures and their determinants is important for investment in smallholder agriculture in Nigeria, and related policy development. Each of Nigeria's four climatic regions has some environmental and ecological problems peculiar to it, which tend to expose the farming households to different levels of risks. While much of the Northern region (Sahel and some parts of Sudan Savanna) are exposed to desertification and flooding, the Southern parts (Rainforest and Guinea Savanna) are faced with flooding, sheet sand gully erosion. It is expected that each zone of the country, with different agricultural and land management systems experience sand respond to climate change risk differently. 118 4. The assessment below outlines the objective of the assessment, the methodology used, the main findings in terms of the degree of awareness of climate change and how it corresponds with rainfall and temperature data, on-going measures taken to reduce climate risk, factors influencing the uptake of these measures, and lastly, recommendations for how land management investment may support farmers in reducing risk. 5. The full assessment is available from the Project file. B. Objective 6. The overall objective of this analysis is to assess community and household perception of environmental and climatic conditions and changes in a range of agro-ecological zones in Nigeria, and to document on-going adaptation strategies that can be inserted into investment operations. The specific objectives are to carry out a representative assessment of the following: (i) Perception of prevalent environmental and climatic conditions; (ii) Adaptation strategies used to reduce vulnerability to environmental and climatic hazards; (iii) Constraints to building resilience to climatic and environmental shocks. C. Methodology 7. This assessment made use of primary data collected from farm households of six communities that will benefit from the Fadama III operation. The six communities were selected based on a multi-stage sampling method from the six geopolitical/agro-ecological zones of the country. Fifty (50) farm household heads were randomly selected from each community, giving a total of three hundred (300) farmers who were the respondents. Data and information were collected using interview schedules and focus group discussion (FGD) guide. Data were analyzed using descriptive statistics and cross-tabulations with X2 outputs. Further analyses were done using econometric models- Maximum Likelihood Binary Probit model and Factor Analysis. D. Key findings 8. Key findings on farmers' perceptions of local climate change: · Farmers are quite aware that the country in general is getting warmer and drier with increased frequency of drought and changes in timing of rains. Farmers from the northern region (Sahel and Sudan Savanna) seem to be more aware of this than farmers from the southern region (Guinea Savanna and Rain Forest). · Farmers' perceptions of climate change in this assessment correspond to the scientific evidence of change provided by meteorological monitoring stations. Records from weather stations as analyzed tend to support communities' perception on climate changes in temperature and precipitation across the country. It found that temperature has been on the increase and precipitation on the decrease in most parts of the country. 119 · Most of the farmers across the regions/zones indicated that what guides them in weather forecasting include mainly the previous years' experience, as well as the first rain and the intensity of early rains. · The ability to perceive climate change and correctly interpret the change is age, education, and farming experience dependent, but not dependent on family size. Information source/guidance to the farmers has a functional dependence on farmers' ability to perceive climate change. · Based on probit analysis, age, level of education, farming experience and the agricultural zone of the farmer positively and significantly influence perception of climate change. Also a positive and significant relationship exists between perception of change in climate and engagement of farmers into non-farm activities. This has confirmed the earlier finding by cross-tabulation that age, education and farming experience influence perception of climate change. · Farm size, farming system and cropping system practiced by the farmers influence farmers' sensitivity to and ability to perceive climate change. · The type of crop grown has a functional dependence on the ability to time the rainy season, but farmers' concept of when rain is considered good or bad enough does not depend on types of crop planted. 9. Key findings on farmers' adaptive responses to climate change include: · Climate risk reducing options being used by farmers across the country include praying to God and performing some religious rituals, which is more prevalent with farmers in the northern regions; and switching to non-farm businesses which is more adopted in the southern region. Many farmers across the country also adapt by growing a number of crops on the same plot of land or in different plots to mitigate the effects of total crop failure, as crops are affected differently by climatic events. Also mixed farming is practiced by many farmers across the country as an adaptive measure. · Many farmers from the northern zones acquire more farming resources such as breeding and work animals in years of good climate conditions and harvest, while most of those from the southern zones invest more in non-farming businesses against any year of crop failure. · Looking for alternative sources of water for agriculture is a major long-term adaptive measure which up to 70 percent of the farmers from across the zones claimed they usually adopt at the community levels. 10. Key findings on factors affecting farmers' selection of climate risk reducing measures: · Cross-tabulations with X2 outputs reveal that there is no functional dependence between education and choice of adaptive response to effects of climate change. However, choice of adaptive response and what guides households to plan and implement adaptive options to 120 climate change are mostly dependent on farming experience, but also age, farm size, secure land tenure, and gender. · Information and inputs: The more access to information the farmers have, the greater the tendency to want to adopt improved SLM practices or diversify livelihoods. For example, farmers who perceived the climate as becoming drier tend to source alternative sources of water. Lack of information and poor access to farm resources and inputs is considered the main constraint to greater adoption of climate risk reducing measures. · The quality of the information influences the choice of adaptive response by farmers, with most information coming from radio, television and word of mouth. Access to extension is poor and formal farmer-to-farmer learning events are uncommon. This choice in turn is affected by the degree to which farmers perceive actual climate change. · Farming and cropping systems adopted by farmers influence their adaptive strategy, that is, there is a functional dependence between adaptive strategy adopted and the farming and cropping system practiced by the farmers. · The land tenure system of farming households influenced their long-term adaptation strategy. Farmers who have more secure land access (by inheritance and/or purchase) tend to adopt long-term risk reducing strategies. · Of those farmers who perceived climate risk, nearly all identified constraints to better adapt their farms and livelihoods. These constraints are summarized in table 1 below. Table 1. Perceived Constraints to Adaptation by Zone (% of respondents) North North North South South South Constraints West East Central West East South Lack of information on climate 50 36 78 72 88 64 Lack of knowledge of adaptive responses 72 88 48 46 76 48 Poor knowledge of adaptive responses application 72 80 40 52 80 56 Limited access to credit 36 58 56 40 78 52 Limited access to improved technologies 50 66 40 44 96 48 Poor access to farm inputs/ markets 42 44 52 62 60 68 Poor access to irrigation water 66 34 64 52 86 50 Lack of community action on environment 62 76 28 28 40 44 Lack of access to farm insurance 80 64 76 62 32 50 Others 10 2 8 8 2 12 No barriers to adaptation 26 4 22 32 24 18 E. Recommendations for land management investments to help farmers reduce climate risk 11. Improve knowledge and information access 121 · Any rural development, agriculture, NRM or land management investment operation should build in awareness creation on mitigation of and especially adaptation to climate change and variability, including meteorological and agronomic information. This is true especially for the Southern parts of the country where farmers' perception of the nature of climate change seem to be weak. Farmers across Nigeria need to know that they should adjust their management practices to ensure that they make efficient use of the limited rainfall and water resources for food production and other needs. · Fairly educated and experienced farmers should be used as model farmers to complement the efforts of extension agents in information dissemination concerning climate change and adaptation options. · Female headed households and indeed all females associated with Fadama III project need to be especially encouraged, since women play pivotal roles in smallholder agriculture. Therefore they need to be protected against adverse consequences of climate change, through bridging the gaps in access to farm resources and inputs; and effective sensitization. 12. Improve economic and policy incentives · Farmers should diversify production and off-farm income. Mixed farming and mixed cropping and integrated livestock systems can cushion the effects of adverse climate change, as well as potentially lead to greater soil fertility, vegetation cover, rainfall infiltration, and agro-biodiversity. All of these are important for climate resilience. · An effective land reform programme aimed at making land more accessible to users in a free market system. This will enhance long-term adoption measures that enhance land productivity and resilience as buffers against climate change and variability. · Farmers are interested in and can benefit from greater access to insurance products to reduce climate change risks. Bottlenecks which the farmers identified as hindrances to taking a policy such as lack of access to the insurance facility. The Nigerian Agricultural Insurance Company (NAIC) could simplify methods of policy taking and to take their services to the LGAs benefiting from Fadama III. · Famers will have more risk reducing measures at their disposal if they enjoy better market access (input and output) and farm credit access. · The FGN and States have the responsibility to adjust policies and direct resources and attention to enhance the adaptive capacity of agricultural systems to climate change. Such policy measures could include incentivize uptake of drought resistant crop technologies, improving climate information forecasting and dissemination, and promoting farm-level adaptation measures such as soil and water conservation practices and agroforestry. 13. Identify locally appropriate land management practices and other adaptive strategies 122 Famers are already practicing a range of adaptive land management practices and other actions. See table 2 below. Since community perceptions seem to generally agree with weather station records across the country concerning temperature increase and decrease in precipitation, locally suitable soil and water conservation practices should be extended on a wider scale. This will significantly help farmers cope with changing rainfall and temperature regimes, as well as erosion, which is common place in various forms throughout Nigeria. Farmers who use alternative sources of water such as irrigation technologies should be especially encouraged through adequate training in crop management practices associated with irrigation. The existing irrigation systems, mostly in northern Nigeria, should be revitalized in the context of integrated water management, and the water equitably made available, while there should be efforts at developing small irrigation systems and even tube-wells for all-year farming in the southern zones of Nigeria. Agro-forestry ­ that is, use of trees in farming systems -- in line with the different geographical zones should be included. This is one of the most viable options for sustainable land management (SLM), and one of the biggest insurance farmers could get against environmental degradation occasioned by climate change. Above all it has the potential of poverty reduction and building farmers' resilience against adverse effects of climate change. However, uptake to date is slow given the relatively long payback period for co-benefits to emerge. Table 2. On-going adaptive responses to adverse climate change by zone (% of respondents) Adaptation Strategy North North North South South South West East Central West East South Resign to fate 6 - 10 2 8 6 Pray more to God/Rituals 64 92 40 44 2 42 Fall on previous year harvest 10 7 14 14 2 24 Use last year saved income 20 4 10 2 4 20 Engage in non-farm activity 38 24 50 14 84 38 Seek government help 32 2 26 26 16 4 Cultivate mixed crops 24 16 18 64 76 80 Crop diversification 34 90 56 8 22 16 Shifting cultivation 4 6 34 14 12 34 Produce both crop and 90 90 74 78 84 66 livestock Use other source of water 66 58 30 48 8 2 (Irrigation) Soil conservation technique 72 67 2 8 2 2 Harvesting storm water 22 10 - 10 2 2 123 Annex 16: Sustainable Land Management in Nigeria: Towards a Multi-sector Investment Program NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION 1. Since late 2007, the Government of Nigeria has been engaged in the development of a more programmatic and participatory approach to scale up investment in sustainable land and water management to address land degradation and climate risks, agricultural productivity, food security, and to secure ecosystem services and protect or drive non-oil economic growth. As a first step, a National Sustainable Land Management (SLM) Technical Committee was founded to kick start the process of building a nationwide alliance on land, given the many sectors and stakeholders involved in investment and policy decisions. The Committee includes the FMAWR (Chair and CAADP focal point), FME, FMF, NPC, NIMET, NEPAD and other environmental regulatory bodies such as NESREA. More recently, a SLM Steering Committee was proposed at the cabinet level to offer higher-level support to cross-sectoral coordination and ensure inclusion of SLM in rural land related policy and investment dialogue. 2. The SLM committee is pursuing a more coordinated and harmonized programming among different institutional, thematic, and geographic boundaries, and among development partners. This effort is meant to improve the coherence of the various land based investments, avoid antagonistic approaches or duplication, and to consolidate and put into better use the isolated knowledge and evidence that exists throughout the country. If successful, this approach would change business as usual. It would allow for greater scope and impact of interventions, a longer timeframe for sequencing investment planning, and a more strategic use of domestic and international financial resources. 3. This programmatic approach is consistent with the Paris Declaration on Aid Effectiveness that the Federal Government of Nigeria adopted in March 200534, and with the approach advocated by CAADP and the TerrAfrica partnership, which Nigeria has supported since inception in 200435 and 2005, respectively. 4. The National SLM Technical Committee is serving as the technical level coordination body for the Nigeria's SLM Steering Committee. The technical committee, chaired by the FMAWR, currently meets once a month and since its inception in 2007 has been involved in sensitization of key government agencies, state governments, civil society, and donors in 34 According to the Paris Declaration on Aid Effectiveness (2005), a programmatic or Program-Based Approach (PBA) is characterized by the following features: (a) leadership by the host country or organization; (b) a single comprehensive program and budget framework; (c) a formalized process for donor coordination and harmonization of donor procedures for reporting, budgeting, financial management and procurement; and (d) efforts to increase the use of local systems for program design and implementation, financial management, monitoring and evaluation. 35 TerrAfrica was launched in 2005 to support and strengthen the implementation of the United Nations Convention to Combat Desertification (UNCCD), the Comprehensive Africa Agriculture Development Program (CAADP) and the New Partnership for Africa's Development (NEPAD) Action Plan of the Environment in SSA. TerrAfrica is a multi-stakeholder partnership aiming at creating the enabling conditions to scale-up SLM in Africa through country-led program based approaches. The approach focuses on reinforcing country owned efforts to harmonize, align, and coordinate efforts by (i) developing multi-stakeholder alliances; (ii) improving knowledge management; and (iii) improving multi-sector investment programming. See www.terrafrica.org. 124 strategically aligning stakeholders. One key task of the Committee is the development of Nigeria's Strategic Investment Framework for SLM, to be delivered in two or three phases, starting with Cross River State. This task is embedded within the Committee's work program which is organized into three types of activities: (i) coalition building, (ii) knowledge and information support, and (iii) multi-sector investment programming. These are summarized sequentially below. (I) Coalition building: 5. The National SLM Technical Committee is building a coalition of stakeholders in land management across government agencies and donors. The National SLM Technical Committee is involved in inter-ministerial, multi-stakeholder collaboration to better mainstream the SLM agenda in national development planning, with the objective to align and scale up SLM activities. The SLM Steering Committee acts at the higher level to ensure inclusion of SLM in rural land related policy and investment dialogue. State Consultations 6. The National SLM Technical committee has carried out sensitization among all State governments and other actors with the aim of expanding the alliance and rooting it in evidence based investment and policy oriented dialogues. The State meetings are providing a platform for identifying strengths, weaknesses, and opportunities concerning: (1) extent of land degradation and climate risks to development priorities and natural assets (including crop, range, and forest systems); (2) parameters for a program-based approach to investment, and (3) practical activities such as coalition building activities, analytical activities, initial investment identification, and participation in the preparation of the Nigeria SLM Investment Framework. 7. The National SLM Technical Committee has so far visited all states in the country resulting in the following examples of first-cut land degradation priorities identified by State governments and stakeholders. These will be further discussed as the national coalition matures: Abia State: Soil erosion, downstream sedimentation, deforestation Anambra State: Soil erosion, intensive land use, deforestation Sokoto State: Desert encroachment, siltation Zamfara State: Desert encroachment, siltation Osun State : Massive deforestation Oyo State: Deforestation, unregulated timber logging, expand watershed management Cross River State: Deforestation, illegal timber logging, expand watershed management Kebbi State: Deforestation, siltation, expand grazing reserves, bush burning, unregulated timber logging 8. Building a coalition in a complex country like Nigeria takes time. In 2007 and again in 2008, the Government organized and funded two successful workshops (2007, 2008), using purely domestic financing. These workshops started the national dialogue to build a national coalition to improve investment programming. The workshops were attended by farmer 125 organizations, producer organizations, NGOs, different government ministries at the federal and state levels, and international partners. (II) Knowledge and Information Support: 9. The National SLM Technical Committee is involved in World Bank sponsored analytical work on land being carried out by IFPRI and ICRISAT including a (i) Cost-Benefit Analysis and Public Expenditure Review in Cross River, Sokoto and Niger states, with a sister study in Mali, and (ii) a regional study on climate/land dynamics with Nigeria's north as a case study. Upcoming work includes a climate risk analysis, which will build on the preparation study on community climate risk perceptions that was delivered as part of Fadama III GEF preparation. 10. In addition, an SLM/agriculture knowledge base and information system and technical training program will be developed with support from the Fadama III GEF operation. (III) Investment Alignment: 11. The objective of this work is to increase the effectiveness, capability, and responsiveness of government and other stakeholders to improve multi-sector investment programming on rural land management. As such, this sub-component includes a suite of activities that leverage the government's on-going actions in this area, to help build the "public sphere," including the media, civil society, academia, and producer and community associations. This approach will lead to a change in the way that projects and programs are selected, designed and deliberated. It advocates for greater participation, transparency and accountability into all stages of the cycle. This is seen as a major vehicle for methodically upscaling SLM practices such as conservation agriculture, land use planning, erosion control, forest protection, and small irrigation in order to improve development outcomes. 12. As mentioned above, the National SLM Technical Committee is developing Nigeria's Strategic Investment Framework for SLM, in line with the President's 7 Point Agenda, Vision 2020, NEEDS, SEEDS, and various sector strategies. The SLM Investment Framework is a suite of prioritized on-going, pipeline, and future investments, and is accompanied by other institutional support such as knowledge platforms, information systems, and associated capacity development. This effort is linked into the national policy dialogue. The investment framework contributes to a more focused and investment-centered articulation by the country of its land agenda, in particular climate change, watershed management, and forest, as well as the effort to build agriculture investment plans that encompass other important areas including food security, irrigation, research, and land tenure. 126 Annex 17: Summary of Fadama III Project Components NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION 1. The design of Fadama III is organized in six inter-linked components as summarized below. GEF incremental funding will support specific incremental activities in Components 1 and 6 of Fadama III. Project costs are presented in Table 1 below including all financing sources for the integrated project: IDA, counterpart, plus GEF. Table 1: Project Cost by Component (in US$ million) Baseline (IDA, Component Title GEF counterpart) Total Capacity Building, Local Government, and Communications 1 and Information Support 6.00 87.50 93.50 2 Small-Scale Community-Owned Infrastructure 0.00 73.57 73.57 3 Advisory Services and Input Services 0.00 39.50 39.50 Support to the ADPs, Sponsored Research, and On-Farm 4 Demonstration 0.00 37.43 37.43 5 Asset Acquisition for Individual Economic Interest Groups 0.00 150.00 150.00 6 Project Administration, Monitoring, Evaluation, and Knowledge 0.80 59.30 60.10 Preparation Funds 2.70 2.70 TOTAL COST 6.80 450.00 456.80 2. Component 1: Capacity Building, Communications and Information Support (US$87.50m). Component 1 of Fadama III will build the underlying capacity and awareness at federal, state, and local government level that is necessary to support innovations in local development planning and provide the support structures for delivery of community demand- driven investments in rural development (as supported under Component 2 and 5). Communities will be mobilized to form viable Economic Interest Groups (EIGs) that are organized into a collection of registered community associations nationwide. Training will empower communities to prepare socially more inclusive Local Development Plans (LDPs) and to identify, design, implement and maintain productive assets. To minimize land use conflicts, the capacity of communities to manage natural resources will be strengthened and mechanisms for conflict resolution between competing land users will put in place. Capacities of Local Governments will be strengthened to better respond to the needs of their communities and to improve decision- making capabilities, local development planning, and governance. 3. GEF support to component 1 is described in component A of the GEF project. 4. Component 2: Small-Scale Community-Owned Infrastructure (US$73.57m). Component 2 of the baseline project will provide sub-project funding to registered community associations for community-owned public goods infrastructure investments that have been prioritized in Local Development Plans. Investments may include construction and/or 127 rehabilitation of community infrastructure (feeder roads, access roads, small bridges, storage facilities, etc.), construction of cross-community infrastructure (stock routes, pastures and watering points, etc.), and small watershed management infrastructure (water harvesting structures, land stabilization structures, etc.). 5. Component 3: Advisory Services and Input Support (US$39.50m). Component 3 of the baseline project will support provision of advisory services to individual economic interest groups (EIGs) with the aim to guide and improve production, processing, marketing and supply chain management of economic activities in which the EIGs are engaged. In addition, users of rural land and water resources will be supported with matching grant funding to purchase farm inputs, such as seeds, seedlings, fertilizer, feed, and agro-chemicals. For sustainability purposes, beneficiaries will be further assisted in engaging in saving schemes and in accessing credit. 6. Component 4: Support to Agricultural Development Programs (ADPs), Sponsored Research and On-farm Demonstration (US$37.43m). Component 4 of the baseline project will foster a shift in public extension services moving away from a traditional supply-driven nature to adopt an approach responsive to community demands. Model extension programs customized for meeting the requirements of communities will be established with contributory funds from federal, state and local governments and will be implemented through Nigeria's Agricultural Development Programs (ADPs). 7. Component 5: Asset Acquisition for Individual Economic Interest Groups (US$150.00m). Component 5 of the baseline project will provide a matching grant facility to finance assets for income-generating activities of the rural poor through economic interest groups (EIGs) formed by community members. The matching grant will serve as seed money to empower poor farmers and others to form viable EIGs to select and acquire capital assets, which they require to undertake a wide range of small-scale income-generating activities including both farm and non-farm. 8. Component 6: Project Management, Monitoring and Evaluation, and Knowledge US$59.30m ($47.2 million of which is for Project Management) . Component 6 of the baseline project will finance the cost of project management and coordination, monitoring and impact evaluation, as well as the cost of screening and ensuring EMP compliance. The expected outcome is an efficiently delivered project meeting high standards of transparency and participation. 9. GEF support to component 6 is described in component B of the GEF project. None of the GEF support finances project administration or safeguards. 128 Annex 18: Maps NIGERIA: SCALING UP SUSTAINABLE LAND MANAGEMENT PRACTICE, KNOWLEDGE, AND COORDINATION 129