Nigeria Water - MDB Reform

Nigeria Water Sector · World Bank · MDB Reform Platform

Does the World Bank Learn from Project Failures? Eight Water Projects in Nigeria. 34 Years. $1.9 Billion.

The Same Diagnosis. The Same Failure. The Same Loan. From Lagos Water Supply (1993) to SURWASH (2021).

Parminder Brar | Former World Bank Country Manager and Lead Governance Specialist | May 2026

📄

Full Paper — 24 Pages (PDF) DOES THE WORLD BANK LEARN FROM PROJECT FAILURES? Draws on two IEG PPARs, five ICR Reviews, the SURWASH ISR (June 2025), two IEG global water evaluations, and the IEG Master Database of 10,542 rated projects.

↓ Download Full Paper (PDF)

$1.9bnCommitted across eight water sector projects in Nigeria. Six failures totalling $1.808 billion. One Satisfactory — a $5 million pilot.

34 yrsFrom Lagos Water Supply (1991) to SURWASH (2025). The same diagnosis in every evaluation. The design model did not change.

1Household with improved sanitation under SURWASH ($700M). Target: 280,000. Katsina reported 86. One met standards.

MU ×6Six Moderately Unsatisfactory. One Highly Unsatisfactory. One Satisfactory ($5M). The Seventh is rated MU at mid-term.

Between 1991 and 2025, the World Bank approved eight major water sector operations in Nigeria totalling $1.876 billion. Seven failed. One succeeded — a $5 million community-managed pilot that put Water Consumer Associations in charge of technology selection, tariff collection, and operations. IEG’s 2006 evaluation of the early projects found the answer: “The improving trend in project outcomes can in large part be explained by a shift in responsibility for project implementation away from the Federal Ministry of Water Resources.” The Bank then approved four more federal-level projects — each larger than the last.

Central FindingThe Bank’s own evaluators diagnosed the structural problem in 2006. The diagnosis has not changed in 28 years. The design model has not changed. The commitment amount quadrupled — from $177 million to $700 million. The rating has not changed. The institution produced lessons. It did not learn from them. The difference is $1.9 billion.

The Full Record

#	Project	Commitment	Rating	Instrument
1	Lagos Water Supply (P002082)	$177M	Moderately Unsatisfactory	Investment
2	Water Rehabilitation (P002084)	$260M	Highly Unsatisfactory	Investment
3	First Multi-State (P002109)	$101M	Moderately Unsatisfactory	Investment
4	Small Towns Pilot (P064008)	$5M	Satisfactory	Investment
5	First NUWSRP (P071075)	$200M	Moderately Unsatisfactory	Investment
6	Second NUWSRP (P071391)	$200M	Moderately Unsatisfactory	Investment
7	Third NUWSRP (P123513)	$250M	Moderately Unsatisfactory	Investment
8	SURWASH (P170734)	$700M	MU (ISR June 2025)	PforR

Generation One: The Federal Model Fails (1991–2001)

The Bank’s first generation of water lending was built around the Federal Ministry of Water Resources. Three large projects, implemented through a federal ministry that lacked operational authority over State Water Boards. The Water Rehabilitation Project ($260 million) was rated Highly Unsatisfactory — the worst rating IEG gives. The Niger State Water Board after $260 million in lending: 39 staff per 1,000 connections (benchmark: 2), zero percent metered (benchmark: 100%), 83 percent non-revenue water (benchmark: 15%). Kaduna State after three Bank projects: zero percent of the population with 24-hour service. Only 28 percent of water samples safe for pathogens.

Finding 1 — The Pump That Never WorkedIEG’s PPAR: “The pump was procured by FMWR and installed. The power supply from NEPA was so deficient that the pump could not be consistently operated. The Project allowed for the purchase of standby generators. But the generators could not be operated because the State Water Board did not have the free cash to buy fuel oil.” This chain — pump procured, power fails, generator purchased, no fuel money, system idle — repeated across all 36 states.

The $5 Million Pilot That Worked

The Small Towns Water Supply pilot ($5 million, Satisfactory) reversed every assumption. Communities chose their technology, contributed 10 percent of costs, and managed operations through Water Consumer Associations. Twelve of sixteen systems became operational. Investment cost: $200 per household. IEG rated sustainability as Likely and institutional development as Substantial — the only project in the portfolio where both were positive.

Finding 2 — IEG’s Verdict (2006)“The improving trend in project outcomes can in large part be explained by a shift in responsibility for project implementation away from the Federal Ministry of Water Resources under the National Project, to only two State Water Boards under the Multi-State project, and finally to a clear focus on a limited number of towns under the Small Towns project.” The answer was in the data in 2006. The Bank did not act on it.

Generation Two: The Bank Scales the Model That Failed (2004–2021)

Three consecutive National Urban Water Sector Reform Projects — $120 million, $200 million, $250 million — all through the Federal Ministry, all rated Moderately Unsatisfactory. The First NUWSRP’s gains were reversed within three years: collection efficiency 78% → 60%, O&M coverage 60% → 20%, beneficiaries 5.4 million → 4.1 million. The management ICR rated it MS; IEG’s PPAR downgraded it to MU. The Third project committed $250 million, disbursed $142 million, cancelled $86 million. Rivers State never started.

Finding 3 — The Same Lessons, Written Four TimesThe Third project’s lessons are the First project’s lessons. The First project’s lessons are the 2006 PPAR’s lessons. The 2006 PPAR’s lessons are the 1998 Lagos Water Supply lessons. The Third project’s evaluation recommended a different lending instrument entirely — after $570 million and seventeen years of the same approach.

The Seventh Project: SURWASH ($700 Million)

$700 million. The largest water operation in Nigeria’s history. The instrument the Third project’s evaluation recommended (Program-for-Results). The same Federal Ministry coordinating. Some of the same states (Kaduna, Ekiti, Katsina). The June 2025 Implementation Status Report:

Indicator	Target (2027)	Actual (May 2025)	Achievement
PDO Rating	—	Moderately Unsatisfactory	MU
Disbursed	$700M	$93.6M	14%
People with basic water	6,100,000	58,585	< 1%
People with improved sanitation	1,400,000	5	0.0004%
Households with improved sanitation	280,000	1	1 of 86 met standards
Communities achieving ODF	500	0	Zero
National WASH Fund	Yes	No	Not established
Political/Governance Risk	Substantial	High	Upgraded
Fiduciary Risk	Substantial	High	Upgraded

Finding 4 — The Mid-Term ReviewThe MTR found “delays in budget allocations and program execution due to a lack of understanding of the Program-for-Results instrument among state-level decision-makers.” Two contracts terminated in Delta. PIUs using different accounting software. The project was restructured in February 2025. The instrument changed. The rating did not.

The Timeline: 34 Years

1991

Water Rehabilitation approved ($260M). Nationwide, 36 states, managed by FMWR. Rated Highly Unsatisfactory.

1993

Lagos Water Supply approved ($177M). Average consumption: 12 litres/capita/day. Rated MU.

2000

Small Towns pilot approved ($5M). Community-managed. 12/16 operational. Rated Satisfactory.

2006

IEG PPAR 36443: “Shift away from FMWR explains improving outcomes.” Niger SWB: 39 staff/1000 connections. 0% metered.

2004–14

Three NUWSRPs approved: $120M, $200M, $250M. All MU. Same FMWR. Same structural constraints. $570M total.

2017

IEG PPAR 115782: First NUWSRP gains reversed. O&M coverage 60%→20%. Beneficiaries 5.4M→4.1M.

2021

SURWASH approved ($700M). PforR instrument. Seven states. FMWR coordinating.

2025

SURWASH ISR: Rated MU. 58,585 of 6.1M reached. 1 household of 280,000. Zero ODF communities. Restructured.

Finding 5 — Not an OutlierIEG’s 2010 global evaluation: only 15% of projects achieved cost recovery. IEG’s 2017 evaluation: 42% of “passing” projects at significant risk. Financial covenants “yielded disappointing results.” Nigeria’s failures are the sector norm.

The Conclusion

The question is no longer whether the World Bank learns from project failures. The ISR for the Seventh project answers it.

The question now is: who is accountable? $1.876 billion in sovereign debt. One household with improved sanitation. Nigeria repays in full. The Bank collects its fees. The IEG evaluation database has contained the diagnosis since 2006. The design model has not changed. The rating has not changed. The only thing that has changed is the commitment amount — from $177 million to $700 million.

The institution has learned to fail at scale.

📄

Full 24-Page Paper Two IEG PPARs, five ICR Reviews, SURWASH ISR (June 2025), two IEG global water evaluations, IEG Master Database.

↓ Download PDF