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PROJECT INFORMATION DOCUMENT (PID)CONCEPT STAGE

Report No.AB6300Project Name Nigeria Erosion and Watershed Management ProjectRegion AFRICASector Water, Sanitation, and Flood Protection (50%); Agriculture,

Fishing, and Forestry (30%); Public Administration, Law, and Justice (20%)

Project ID P124905Borrower(s) THE FEDERAL GOVERNMENT OF NIGERIAImplementing Agency The Federal Government and Selected Governments of Abia,

Anambra, Cross River, Ebonyi, Edo, Enugu and Imo States.Environment Category [ ] A [X] B [ ] C [ ] FI [ ] Date PID Prepared January 28, 2011Estimated Date of Appraisal Authorization

June, 2011

Estimated Date of Board Approval

October, 2011

I. Key development issues and rationale for Bank involvement

Country Context1. Nigeria is the most populous country in Africa with 152 million people (8 th highest in the

world) and is growing rapidly at about 2% annually (with 40% of this population estimated to be below 14 years of age). It is also the third-largest economy in Africa, with a GDP of about USD 340 billion annually (about USD 2,400 per capita) in PPP terms, split almost equally between agriculture, industry, and services. It is one of the fastest growing economies in the world, with a GDP growth rate of about 9% in 2008 and 8.3% in 2009. Oil plays an important role in the country’s economy (it is the 8 th largest oil exporter globally); however, there is significant inequality with about 70% of the population living in poverty. Its Human Development Index ranking is 158 th in the world. The country has been plagued by problems of political instability, governance, corruption, ethnic tensions, infrastructure, natural resource degradation, and climate variability.

2. With a land area of 923 800 square kilometers, Nigeria is large and diverse. It has tropical rainforests and coastal plains in the far south (with rainfall from 1,500 to over 2,000 mm/yr), vast valleys in the Niger River and Benue tributary with under-utilized arable land, hills in the upstream areas of these rivers, a large savannah area (with 500-1,500 mm/yr rainfall), and the Sahel in the north (with less than 500 mm/yr rainfall). Administratively, the country is divided into a rapidly growing Federal Capital Territory, 36 states, and 744 Local Government Areas. There are about 250 ethnic groups with over 500 languages.

3. Nigeria’s non-oil economy grew by an average nine percent per year in 2003-2007 but is experiencing natural resource over-reach that would limit or reverse this achievement.

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The cost of on-going degradation of renewable natural resources is estimated at 8-10% of GDP, and is likely to increase under a business-as-usual scenario (WB 2006). Unsustainable land and water use – and competition for these resources – will likely hinder attainment of the government’s ambitions on non-oil growth, food security, and energy from hydropower and biomass. Problems such as soil erosion continue unabated, jeopardizing livelihoods, infrastructure, and settlements. Investments in public environmental goods, especially in land and water resources, are below the level needed to ensure a sustainable stream of benefits from natural wealth that help drive or protect growth. Current and future climate risks add to the challenge to secure services and livelihoods from natural wealth such as food, water, medicines, and power. Successful implementation of natural resource management within and across a number of primary sectors and critical themes is essential for Nigeria to be among the world’s 20 th largest economies – a target it aspires to in its Vision 20:2020.

4. Nigeria’s Vision 20:2020 articulates two broad objectives: (1) optimize human and natural resource potential to achieve rapid and sustained economic growth; and (2) translate economic growth into equitable social development that guarantees a dignified and meaningful existence for all her citizens. To achieve these, Vision 20:2020 prioritizes investment in non-oil growth, energy, and food security, while emphasizing the “need to achieve a sustainable balance in the use of land, water and other natural resources between production systems and protection of the environment to secure sustainable livelihoods for farmers and the rural population.” Although Vision 2020 includes specific targets for expanding forest and vegetation cover, soil health, water availability and natural resource enterprises, there is not yet an integrated, strategic approach in place at Federal or State levels to address the competing and growing needs, or to face the massive gully erosion that compromises property, infrastructure, human life and livelihoods in Nigeria’s southeast.

Sectoral and Institutional Context

5. Southeastern Nigeria is a hotspot for massive gully erosion, an advanced form of land degradation. Rapidly expanding gully complexes have resulted in extensive impacts including loss of human life and loss of both built and natural assets (e.g., roads, drainage, housing, farmlands, community assets, silted waterways, and port). The estimated 3000 gullies present in the southeast vary in size. Some are vast complexes eight kilometers long with fingers one or two kilometers long. These gullies, along with other forms of land degradation such as sheet erosion, can undermine the progress made on economic growth and poverty alleviation in these areas.

6. Root causes for the gullies differ from site-to-site but are largely human-induced. These include improper road design and construction particularly for adequate cross-drainage; fragmented and inadequate scale of response; poor or incomplete rehabilitation works (often

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with major design or contract management issues) that often tend to either exacerbate the erosion problem or transfer it to another area; very inadequate land use planning and destructive and unsustainable land-use practices that remove protective vegetation cover, as well as weak preventive land management. Climate is a significant factor in erosion especially given the very high intensity rainfall in southern Nigeria. Historical climate variability (both droughts and floods) tends to exacerbate erosion and future climate change is only expected to worsen this situation. Topography, runoff and groundwater play crucial roles in erosion. Human and livestock activities have synergized with natural tendencies to cause spectacular gullies in Nigeria’s southeastern region. The soils in the area are often highly erodible and lack cohesion (especially with poor organic matter as population pressures have reduced fallow land, encouraged deforestation, and cultivation and grazing in marginal areas) and the steep slopes of the gullies (see picture from Anambra State) are major contributing factors for the erosion. Poor solid waste management, especially in peri-urban and urban areas, chokes the already inadequate drainage and increase erosion.

7. Some limited Federal, State, and local efforts are on-going but the government confirms that these are predominantly small-scale engineering-based efforts to remedy the problem in some sites, both rural and urban. There are several interventions that have been done over many decades that have not been successful or sustainable due to issues with weak land use planning, scale of intervention, construction, and post-construction aspects, and weak local participation. Communities and State governments in southeastern Nigeria are overwhelmed by the scale of the problem. Various manifestations of rural land degradation have led to the massive gullies along with siltation of waterways, riverbank collapse and river course re-routing, and have undermined existing infrastructure capacity (e.g., reservoirs, roads and Calabar Port).

8. Gully erosion is only one extreme form of land degradation affecting the country. Over two-thirds of Nigeria’s 152 million people force out a living directly from land and water resources, often depleting renewable natural assets faster than can be replenished.1 This process results in reduced capacity of the landscape to provide and filter fresh water; provide fuel wood, food, fiber and fodder; buffer the effects of Nigeria’s more variable rainfall and temperature such as droughts, floods, and shifting growing seasons; contributes to loss of productive land, and exacerbates conflict over resource use.

9. Although the challenges are interwoven – and require integrated solutions – the costs of business as usual are large. Erosion is causing heavy sedimentation of Cross River, leading to riverbank erosion and attendant community vulnerability, and choking Calabar’s largely non-functional port, with resulting high dredging costs. Cropland degradation alone is reducing GDP by 2% - 5% (WB 2010). While Nigeria has depleted much of its tree cover, considerable stocks remain nationwide, especially in Cross River State, that generate non-timber products and services such as erosion prevention, watershed function, medicines, building material and biomass energy. The value of lost forest cover has been estimated at US$750M annually at 1989 prices (FGN 2000), and the loss of it amplifies soil erosion and other forms of land degradation.

1 These assets include grasslands, cropland, woodlands, forests, forest, and wetlands in all agro-ecological zones, as well as the flora, fauna and freshwater resources provided by or safeguarded by healthy terrestrial ecosystems.

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10. Such adverse economic and social ramifications will continue to grow and are not expected to abate on their own: by 2020 the country’s total population will approach 200 million, reaching nearly 300 million around 2050. Nigeria’s Vision 20:2020 recognizes that “population growth is placing undue stress on basic life-sustaining resources, resulting in diminished well-being and quality of life.” In sum, unsustainable use of land and water resources is entrenching rural poverty and vulnerabilities, and the country is not fully equipped to respond without external assistance. It is no coincidence that the southeast, has the highest population density in Nigeria.

11. Meanwhile, institutions, information, knowledge and policies are fragmented and under-equipped to act, weakening the ability of Federal, State and Local Governments or the communities that they serve to address land and water resources in a strategic and integrated manner. For example, there is no formal inter-State coordinating mechanism and land use and watershed planning is rare. Although the Government has made some recent progress on institution building,2 these are new efforts that must be sustained over the long-term to succeed. As with the institutions themselves, information, data and tools for planning and monitoring are weak or fragmented, hindering decisions on investment, policy development, and regulatory enforcement. Unclear land and water rights persist, maintaining perverse incentives for unsustainable resource management. Effective institutional strengthening of the government is critical to formulate and implement a multi-sector, multi-State, and multi-stakeholder spatial approach that sustainably protects the potential of land and water resources, infrastructure, and ultimately rural communities themselves.

12. Vision 20:2020 goals for non-oil growth will not likely be met under the business-as-usual scenario. The current approach or scale of investment in erosion management and other public environmental goods associated with land degradation is insufficient to maintain the services provided by natural systems that are needed to achieve the country’s development aspirations. Single sector approaches or isolated engineering projects cannot sufficiently deliver durable results. An integrated package of solutions is required to tackle the integrated problems faced by Nigeria as its renewable natural wealth erodes.

13. At both policy and technical levels, the Government recognizes a need for a holistic and more robust investment response. The missing piece of the puzzle is large-scale investment in the country’s renewable natural capital. Such an investment would likely generate a good return on investment, according to the Bank’s 2006 publication, Where Is the Wealth of Nations. This economic analysis found that “natural capital constitutes a quarter of total wealth in low-income countries, greater than the share of produced

2 Examples include the Inter ministerial committee on Ecological Fund, Inter ministerial Committee on Climate Change, National Sustainable Land Management Committee (supported by Fadama III), and the newly formed independent Nigeria Integrated Water Resources Management Commission and the Hydrological Services Agency. Recent projects such as Fadama are successfully decentralizing and empowering communities – an important principle in integrated management of land and water. However, there is no watershed management policy or strategy. ADPs are being transformed from service/infrastructure providers to catalysts through research extension, training, technical assistance and market intelligence, in order to transform agriculture – but progress is inconsistent. Lastly, there is increasing public sector consultation of farmers groups and fadama and water users associations in project design, but more emphasis is needed.

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capital. This suggests that better management of ecosystems and natural resources will be key to sustaining development while countries build their infrastructure and human and institutional capital.” In particular, the book reports that Nigeria would have had a stock of produced capital five times higher than it did in 2000 if it had invested in sustaining its natural resource base in the previous thirty years.3

14. There is increasing recognition of the urgency, scale of the problem and response required. There is also increasing recognition of the need for a comprehensive and sustainable approach that learns not only from the (largely inadequate) responses in the past in Nigeria, but also builds on global good practice.

Relationship to Country Partnership Strategy II and Rationale for Bank Support

15. The project is consistent with the Country Partnership Strategy II (2010-2013) of the World Bank, UK DFID, USAID and the African Development Bank, which seeks to support sustainable and inclusive Non-Oil Growth. Improved environmental and climate change management is a central part of CPS II which acknowledges the need to address weak policy, institutional and incentive frameworks to support wider adoption of sustainable land use practices which is at the core of the spectacular gullies and degraded watersheds of southern Nigeria. The proposed project aligns well with the Bank’s Rapid Country Environmental Analysis (2006), the on-going Climate Change Assessment and associated analytics on Sustainable Land and Water Management (2011). These and other analyses point to a dire natural resource situation and identified government’s capacity to address land degradation to be limited and insufficiently strategic.

16. The project is also in line with the Federal Government’s Vision 20:2020 and 7 Point Agenda, under which the Bank is also supporting several other growth-oriented investment lending programs, DPLs, and technical assistance programs.

17. The Bank is well-placed to support this project given its lead role among development partners in Nigeria and its work to support several complementary sectors. Projects such as the recently concluded Local Empowerment and Environmental Management Project and the ongoing Fadama projects have supported rural development and sustainable land management activities. Existing or upcoming projects and government plans related to hydropower, irrigation, roads, and agriculture are affected by or have the potential to contribute to erosion. These projects and plans can all benefit from improved watershed management and land use planning supported by the proposed project, which will complement the Bank’s portfolio in Nigeria. The proposed project seeks to address a critical issue that threatens to undermine investments in Nigeria and fills a gap in the Bank’s support by investing in the public environmental goods critical for multiple sectors and themes. The proposed project will synergize with Bank projects operating in the rural space especially in livelihood related activities.

3 Ecosystem services such as regulation of water flow by vegetation cover, pollination by insects, or coastal protection by mangroves, contribute to the productivity of farmland and fisheries in particular, as well as provide buffers from risks. But their economic contribution is generally unmeasured in national accounts. This puts the natural assets providing these services at risk when development decisions are taken.

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18. The Bank is also well-placed to support such an activity given that it can draw upon its global expertise in supporting large-scale erosion and watershed management programs (e.g. in the Loess Plateau in China, large watershed programs in India such as Karnataka, Himachal Pradesh, Shivalik hills of the Himalayas, the Anatolia watershed in Turkey, Eastern Nile Basin, and Ethiopia) and demonstrating innovative approaches such as payment for environmental services in Latin America.

19. Past investments in Nigeria and around the world have provided many lessons, including:

Balancing good analytical planning with meaningful stakeholder involvement Importance of “learning by doing” and innovation throughout the process Need for enabling policy and institutional process framework to invest at scale. Need for balanced focus on information, institutional, and on-the-ground investments

(of structural, vegetative, and livelihood development types). Importance of a strong M&E system that includes remote sensing/GIS, activity and

process monitoring at all levels to be used all through the process from intervention design to adaptive management and evaluation.

Prevention is better than cure (e.g. stop gullies in early stages)

20. The project also supports ongoing and planned efforts by Federal and State Governments as enunciated in National Erosion and Flood Control Policy, Action Plan, Technical guidelines, Technical Report on the Ecological Problems of the South Eastern States and the June 2010 report on Land Degradation Mapping and Assessment for the Prevention and Control of Potential Erosion Hazards in Nigeria which seek a holistic and transformational approach to the problem. In addition, the project also complements the goals of the corporate Water Strategy, corporate and regional Environmental Strategies, Africa Regional Strategy, Africa Action Plan, and the Africa Region’s TerrAfrica program.

Project Development Objectives

PDO

The proposed PDO is to restore degraded lands and reduce longer-term erosion vulnerability in targeted areas.

21. This multi-sector project is expected to support a transformation in how Nigerians relate to their land. To respond to the President of Nigeria’s request to the Bank to support the country to address severe erosion in southeastern Nigeria, the Project would take a comprehensive watershed management approach coupled with an investment focus on gully erosion prevention and rehabilitation (via a rapid-response facility) as indicated below. Also, via a cross-state learning element, the project will be dynamic, visible, active, transparent, push for reforms, and provide a framework for action that could be scaled out nationwide.

Key Results

22. Indicators to track PDO progress in project areas would include:

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a. Targeted land area treated for erosion (Hectares, Km)b. Increase in vegetation cover in erosion affected targeted areas (Hectares, Km)c. Improved institutional capacity for land use planning, monitoring, and

outreach (survey that includes # action plans, # outreach activities, quality and quantity of training)

d. Increase in targeted area covered by a watershed action plane. Functional monitoring and evaluation system linked with Federal and State

systems

Project Context

Project Concept

1. Project Description23. There are three project components as follows:

Component 1. Investments in targeted areas (US$ 280 -300 M): This component would aim to support on-the-ground interventions to address, prevent and reverse land degradation. The primary focus would be on addressing severe gully erosion in southeastern Nigeria, focusing on but not limited to the Anambra-Imo and Cross River basins. A strategic combination of engineering, biological, and community-centered low-tech measures would be deployed to (i) stabilize severe erosion sites, and (ii) prevent emerging erosion problems early on when intervention costs are low. Accordingly, interventions will include structural, vegetative, and adaptive natural resource based livelihood measures, coupled with micro-catchment planning where necessary; examples include:

(i) Structural land management measures and civil works such as cross-drainage, check dams, gabions, terracing and other slope stabilization works, river groynes, geotextiles, etc.

(ii) Vegetative land management measures such as afforestation, agroforestry, grassing, bunds, live check dams, no tillage, buffer strips, etc.

(iii) Adaptive livelihood measures important for mobilizing local stakeholders to carry out, maintain and monitor erosion management practices, and to reduce pressure on land.

(iv) Strengthening of communities and local authorities to carry out participatory micro-catchment planning in targeted investment areas, establish community resource management areas, promote selected land and water management and livelihood practices, and participate in investment implementation and monitoring.

This component will be implemented with appropriate planning, preparation, stakeholder involvement, and monitoring. A Gully Rapid Action for Slope Stabilization (GRASS) Facility is proposed to address the many emergency situations in existing gully propagation that pose immediate threats to lives, livelihoods, and critical infrastructure. Investment priorities for the GRASS facility will be informed by a rigorous typology of erosion problems. In addition, the component would support communities and local

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agencies to stem rills and incipient gullies in their early stages of formation, and address constraints to collective action.

Component 2. Institutional development and information systems for erosion management and watershed planning (US$ 40-50M): This component would address longer-term sustainability by strengthening the enabling environment to address erosion and watershed degradation problems in a comprehensive manner across sectors and States. The component would support modernization and coordination of the many institutions involved in planning, management, assessment, enforcement, and monitoring of watershed and erosion related activities from sub-watershed to basin scales. To reinforce good design and prioritization of investment, the component would also support improvements in the policy environment, data modernization, development and application of analytical and monitoring tools, and diagnoses of watershed problems. The component would tentatively finance: (i) Development of watershed action plans and monitoring arrangements based on

analytical and stakeholder input including land use/land cover mapping.

(ii) Development of coordination mechanisms for multi-sector and multi-scale planning, joint approaches; enabling policies, regulations, and by-laws; and harmonized guidelines for improved land and water management across actors at Federal and State levels;

(iii) Strengthening of regulatory compliance, environmental assessments, and contract management related to erosion management at Federal and State levels; and Establishment of a comprehensive Dynamic Information System as well as other analytical, data, ICT, and monitoring tools that would support planning, prioritization, outreach, and management of investment activities. These could include real time land/water data networks; innovative use of ICT, remote sensing and use of Geographic Information Systems.

(iv) Training to modernize federal and state institutions, coupled with outreach activities to help address land-degrading behaviors at all levels of implementation,

(vi) Establishment of an innovation facility to pilot possible payments for environmental services, investment competitions, innovation fairs, and other events.

Component 3. Project management (US$ 8-10M): This component would aim to support the government at Federal and State levels to implement this project. This will include support for project management, including fiduciary aspects (procurement, financial management, environmental and social safeguards), project M&E, strategic communications, and documentation. In particular, a strong monitoring and learning framework will be set up to learn from past and ongoing interventions for adaptive management all through the process of project planning, implementation, and evaluation.

Safeguard policies that might apply

24. The project is expected to have highly positive environmental and social impacts, as it provides incentives for improved environmental management in critical and sensitive areas with active participation of communities. In addition, it would improve watersheds management and

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reduce land degradation by promoting biodiversity-friendly land use practices. The environmental assessment category for this project is B. This is because the project will support civil works and afforestation activities aimed at erosion and watershed management in a sustained manner. An Environmental and Social Management Framework and Resettlement Policy Framework will be prepared and disclosed prior to project appraisal. Subsequently, site specific Environmental and Social Impacts Assessment and Resettlement Action Plans will be prepared and disclosed as needed.

Safeguard Policies Triggered by the Project Yes No TBDEnvironmental Assessment (OP/BP 4.01) XNatural Habitats (OP/BP 4.04) XPest Management (OP 4.09) XPhysical Cultural Resources (OP/BP 4.11)Involuntary Resettlement (OP/BP 4.12) XIndigenous Peoples ( OP/BP 4.10) XForests (OP/BP 4.36) XSafety of Dams (OP/BP 4.37) XProjects in Disputed Areas (OP/BP 7.60)* XProjects on International Waterways (OP/BP 7.50) XPiloting the Use of Borrower Systems to Address Environmental and Social Issues in Bank-Supported Projects (OP/BP 4.00)

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IV. Tentative financingSource: ($m.)BORROWER/RECIPIENTInternational Development Association (IDA) 350

Total 350

V. Contact pointContact: Amos AbuTitle: Senior Environmental Specialist (AFTEN)Tel: 5359+242 / 234 703 583 0641 – 4 Ext 242Fax: 234-9-314-5267Email: aabu@worldbank.orgLocation: Abuja, Nigeria (IBRD)

** By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas