PforR Beneficiaries and Eligibility Criteria

The PforR component is ex-ante open to 36 states and FCT for participation. However, in order, to be eligible to access the annual performance-based grants, states must achieve the Eligibility Criteria (EC) for the performance year. The Program allows for different entry points by states. States not achieving the EC in Year 1 won’t access Year 1 performance-based grants; however, they can aim to join the Program in Year 2 or 3. To ensure that all states participating in the Program do so for at least 2 years, states need to achieve the EC by year 3 to participate.

Eligibility Criteria (EC): For each year of the Program, states will need to publish on a timely basis the annual approved state budgets and annual audited financial statements. In years 3 and 4 of the Program, states are further required to align with international best practices through: (1) the use of the national chart of accounts/budget classification system, which is GFS compliant, to prepare the states’ annual budgets and thus foster comparability of budget classifications across the federation; and (2) states’ audited financial statements are prepared in accordance with International Public Sector Accounting Standards (IPSAS).

1.1.  PforR Disbursement-Linked Indicators, Results and Value

There is a common performance/results framework of 9 disbursement-linked indicators (DLIs) – a subset of the FSP and OGP reforms. Each DLI has one or two disbursement-linked result(s) (DLR) per year as shown in the DLI Matrix.

The value of achieving each DLR ranges from between $0.3 to $2 million per state, per year and is the same for all states and is specified in the DLI Matrix. The value/pricing attached to each of the DLRs is based on the following principles:

  • Results which strengthen the legal and regulatory frameworks for fiscal management are valued at US$2 million per state and is a one-off payment, for the year in which they were first achieved – they must be achieved within the first three years of the Program.
  • Upstream (processes, systems & outputs) results are valued at US$0.3 million or US$0.5 million per year, per state.
  • Results which are outcomes are valued higher at US$1 million for achieving the basic result and US$1.5 or US$2 million for achieving the stretch result, per year, per state. States that qualify for the stretch result will only get the value for the stretch result i.e. they do not get the basic result value and the stretch result value.

For each year the states achieve the eligibility criteria, they will receive performance-based grants in proportion to their achievement of DLRs for that year (refer to Section 4.6 on the annual PforR financing determination).

Table 3: Disbursement-Linked Indicator (DLI) Matrix

Disbursement-Linked Indicator Disbursement-Linked Results
Year 1 – 2018 Year 2 – 2019 Year 3 – 2020 Year 4 – 2021
DLI 1: Improved financial reporting and budget reliability 1.1 FY18 quarterly budget implementation reports published on average within 6 weeks of quarter-end to enable timely budget management

1.2 FY18 deviation for total budget expenditure is < 30%

1.1 FY19 quarterly budget implementation reports published on average within 6 weeks of quarter end to enable timely budget management

1.2 FY19 deviation for total budget expenditure is < 25%

1.1 FY20 quarterly budget implementation reports published on average within 4 weeks of quarter end to enable timely budget management

1.2 FY20 deviation for total budget expenditure is < 20%

1.1 FY21 quarterly budget implementation reports published on average within 4 weeks of quarter end to enable timely budget management

1.2 FY21 deviation for total budget expenditure is < 15%

DLR 1.1 value $0.3m per state $0.3m per state $0.3m per state $0.3m per state
DLR 1.2 value $1m per state $1m per state $1m per state $1m per state
DLI 2 Increased openness and citizens’ engagement in the budget process 2.1 Citizens’ inputs from formal public consultations are published online, along with the proposed FY19 budget 2.1 Citizens’ inputs from formal public consultations are published online, along with the proposed FY20 budget

2.2 Citizens’ budget based on approved FY19 state budget published online by end April 2019

2.1 Citizens’ inputs from formal public consultations are published online, along with the proposed FY21 budget

AND Citizens’ budget based on approved FY20 state budget published online by end April 2020 with functional online feedback mechanisms

2.2 Citizens accountability report based on audited financial statements/reports published online for FY19 no later than Sept 2020

2.1 Citizens’ inputs from formal public consultations are published online, along with the proposed FY22 budget

AND Citizens’ budget based on approved FY21 state budget published online by end April 2021 with functional online feedback mechanisms

2.2 Citizens accountability report based on audited financial statements/reports published online for FY20 no later than Sept 2021

DLR 2.1 value $0.3m per state  $0.3m per state $0.5m per state $0.5m per state
DLR 2.2 value N/A $0.3m per state $0.3m per state $0.3m per state
DLI 3: Improved cash management and reduced revenue leakages through implementation of State TSA TSA, based on a formally approved cash management strategy, established and functional, and covering a minimum of 50 percent of state government finances TSA, based on a formally approved cash management strategy, established and functional, and covering a minimum of 60 percent of state government finances. TSA, based on a formally approved cash management strategy, established and functional, and covering a minimum of 70 percent of state government finances. TSA, based on a formally approved cash management strategy, established and functional, and covering a minimum of 80 percent of state government finances.
DLR 3 value $1.5m per state $1.5m per state $1.5m per state $1.5m per state
DLI 4: Strengthened Internally Generated Revenue (IGR) collection 4.1 Consolidated state revenue code covering all state IGR sources and stipulating that the state bureau of internal revenue is the sole agency responsible for state revenue collection and accounting approved by the state legislature and published (one-time payment for year in which DLR is first achieved, up to 2020/Year 3) 4.1 N/A
4.2 2018-2017 annual nominal IGR growth rate meets target:
Basic target: 20%-39%
Stretch target: 40% or more
4.2 2019-2018 annual nominal IGR growth rate meets target:
Basic target: 20%-39%
Stretch target: 40% or more
4.2 2020-2019 annual nominal IGR growth rate meets target:
Basic target: 20%-39%
Stretch target: 40% or more
4.2 2021-2020 annual nominal IGR growth rate meets target:
Basic target: 20%-39%
Stretch target: 40% or more
DLR 4.1 value $2m per state (one-time payment) $2m per state (one-time payment) $2m per state (one-time payment) N/A
DLR 4.2 Basic value $1m per state $1m per state  $1m per state $1m per state
DLR 4.2 Stretch value $2m per state $2m per state $2m per state $2m per state
DLI 5: Biometric registration and bank verification number (BVN) used to reduce payroll fraud 5.1 Biometric capture of at least 60 percent of current civil servants completed and linked to payroll, and identified ghost workers taken off the payroll

5.2 Link BVN data to at least 60 percent of current civil servants on the payroll and payroll fraud addressed

5.1 Biometric capture of at least 75 percent of current civil servants and pensioners completed and linked to payroll, and identified ghost workers taken off the payroll

5.2 Link BVN data to at least 75 percent of current civil servants and pensioners on the payroll and payroll fraud addressed

5.1 Biometric capture of at least 90 percent of current civil servants and pensioners completed and linked to payroll, and identified ghost workers taken off the payroll

5.2 Link BVN data to at least 90 percent of current civil servants and pensioners on the payroll and payroll fraud addressed

5.1 Biometric capture of at least 90 percent of current civil servants and pensioners completed and linked to payroll, and identified ghost workers taken off the payroll

5.2 Link BVN data to at least 90 percent of current civil servants and pensioners on the payroll and payroll fraud addressed

DLR 5.1 value Per State $0.5m Per State $0.5m Per State $0.75m Per State $0.75m
DLR 5.2 value Per State $0.5m Per State $0.5m Per State $0.75m Per State $0.75m
DLI 6: Improved procurement practices for increased transparency and value for money 6.1 Existence of public procurement legal framework and procurement regulatory agency. Said legal framework should conform with the UNCITRAL Model Law and provide for: 1) eProcurement; 2) establishment of an independent procurement board and 3) cover all MDAs receiving funds from the state budget. (one-time payment for year in which DLR is first achieved, up to 2020/Year 3) 6.1 N/A
6.2 Publish contract award information above a threshold set out in the Operations Manual for 2018 on a monthly basis in OCDS format on the state website 6.2 Publish contract award information above a threshold set out in the Operations Manual for 2019 on a monthly basis in OCDS format on the online portal

AND

Implement e-procurement in at least 3 MDAs (incl. Education, Health and Public Works) for goods and works program expenditure

6.2 Publish contract award information above a threshold set out in the Operations Manual for 2020 on a monthly basis in OCDS format on the online portal

AND

Implement e-procurement in at least 4 MDAs (incl. Education, Health and Public Works) for goods and works program expenditure

6.2 More than 25% increase in citizens’ access to procurement information

AND

Time savings by more than 20% for each procurement process conducted in the MDAs implementing e- procurement

DLR 6.1 value $2m per state (one-time payment) $2m per state (one-time payment) $2m per state (one-time payment) N/A
DLR 6.2 value $0.5m per state $1m per state $1m per state  $1m per state
DLI 7: Strengthened public debt management and fiscal responsibility framework 7.1 Approval of state-level legislation, which stipulates: 1) responsibilities for contracting state debt; 2) responsibilities for recording/reporting state debt; and 3) fiscal and debt rules/limits (one-time payment for year in which DLR is first achieved, up to 2020/Year 3) 7.1 N/A
7.2 Quarterly state debt reports accepted by the DMO on average two months or less after the end of the quarter in 2018 7.2 Quarterly state debt reports accepted by the DMO on average two months or less after the end of the quarter in 2019 7.2 Quarterly state debt reports accepted by the DMO on average two months or less after the end of the quarter in 2020

AND

Annual state debt sustainability analysis published by end of December 2020

7.2 Quarterly state debt reports accepted by the DMO on average two months or less after the end of the quarter in 2021

AND

Annual state debt sustainability analysis and Medium-term debt management strategy published by end of December 2021

DLR 7.1 value $2m per state (one-time payment) $2m per state (one-time payment) $2m per state (one-time payment) N/A
DLR 7.2 value  $0.5m per state $0.5m per state $0.5m per state $0.5m per state
 

 

 

 

 

 

 

 

       
DLI 8: Improved clearance/reduction of stock of domestic expenditure arrears Domestic arrears as of end 2018 reported in an online publicly-accessible database, with a verification process in place and an arrears clearance framework established. Domestic arrears as of end 2018 and end 2019 reported in an online publicly-accessible database, with verification process in place.

AND

Percentage decline in the verified stock of domestic arrears at end 2019 compared to end 2018 meets target and is consistent with the state’s arrears clearance framework.

Basic target: At least a 5 percent decline or maintain stock below 5 billion naira
Stretch target: More than 20 percent decline

Domestic arrears as of end 2019 and end 2020 reported in an online publicly-accessible database, with verification process in place.

AND

Percentage decline in the verified stock of domestic arrears at end 2020 compared to end 2019 meets target and is consistent with the state’s arrears clearance framework.

Basic target: At least a 5 percent decline or maintain stock below 5 billion naira
Stretch target: More than 20 percent decline

Domestic arrears as of end 2020 and end 2021 reported in an online publicly-accessible database, with verification process in place.

AND

Percentage decline in the verified stock of domestic arrears at end 2021 compared to end 2020 meets target and is consistent with the state’s arrears clearance framework.

Basic target: At least a 5 percent decline or maintain stock below 5 billion naira
Stretch target: More than 20 percent decline

DLR 8 Basic value  $1m per state $1m per state  $1m per state  $1m per state
DLR 8 Stretch value  $2m per state $2m per state $2m per state
DLI 9: Improved debt sustainability Average monthly debt service deduction is < 40% of gross FAAC allocation for FY2018

AND

Total debt stock at end of December 2018 as a share of total revenue for FY2018 meets target:

-Basic target:

< 150%
-Stretch target:

< 125%

Average monthly debt service deduction is < 40% of gross FAAC allocation for FY2019

AND

Total debt stock at end of December 2019 as a share of total revenue for FY2019 meets target:

 

-Basic target:

< 140%
-Stretch target:

< 115%

Average monthly debt service deduction is < 40% of gross FAAC allocation for FY2020

AND

Total debt stock at end of December 2020 as a share of total revenue for FY2020 meets target:

 

-Basic target:

< 130%
-Stretch target:

< 105%

Average monthly debt service deduction is < 40% of gross FAAC allocation for FY2021

AND

Total debt stock at end of December 2021 as a share of total revenue for FY 2021 meets target:

 

-Basic target:

< 120%
-Stretch target:

< 95%

DLR 9 Basic value  $1m per state  $1m per state  $1m per state  $1m per state
DLR 9 Stretch value $1.5m per state $1.5m per state $1.5m per state $1.5m per state

Table Notes:

  • Disbursement-linked results (DLRs) are the specific results to be achieved in each year under a DLI. States’ performance will be assessed during the annual performance assessment against the DLRs.
  • The DLR value shown in the DLI Matrix Table is per year per state. This value is the amount of performance-based financing to be received by a state if a state is assessed as having achieved the DLR.
  • DLIs 1, 2, 4, 5, 6 and 7 each contain 2 DLRs that are separately assessed and valued. These are indicated by the sub-numbering, e.g., 1.1 and 1.2; 2.1 and 2.2 etc. Separately valued means that states can receive the performance-based financing even if they only achieve one of the two DLRs under the DLI.
  • DLRs which have distinct but related components that must be all achieved in order to receive financing are indicated by the use of ‘AND’ in the description
  • DLRs 4.2, 8, and 9 have a basic target with a lower financing value and a stretch target with a higher financing value attached to it. States need to at least achieve the basic target to receive performance-based financing.