Nigeria: 2024 Humanitarian Response Plan - Planning and Costing Methodology

A key objective of the HRP this year is to focus the response more on both thematic and geographical priorities. The approach builds on the severity scales that have been developed over the last couple of years.

There has been a change in the methodology for calculating people in need (PiN) as part of a global overhaul of the HPC process. This is a shift from using multiple inter-sectoral indicators, including a critical indicator, to calculate the overall PiN last year, to using the highest sector need at the LGA level as the PiN for the LGA. The revised methodology – an amended JIAF – then aggregates the PiN across all the LGAs to form the overall PiN. Using this year’s methodology to assess last year’s needs would have given a lower figure for PiN in 2022: 7.2 million people (14 per cent lower).

In this HRP, according to the JIAF severity scale, 2.4 million people are classified as having acute needs. This group faces life-threatening levels of vulnerability and is targeted (under Strategic Objective 1) for prioritized emergency assistance. Among this group are approximately 250,000 people in Guzamala and Bama LGAs, who are identified as having a catastrophic level of needs. Needs are then categorized in terms of the immediacy of need – children with severe acute malnutrition in the lean season, for example, require time-sensitive life-saving interventions. Based on these two dimensions of prioritization, $631 million of the overall requirement for 2023 is urgently required for an emergency response for the 2.4 million people identified as having the most acute life-saving needs.

What appears evident from the MSNA is that the range of needs that people have has expanded – e.g., households that may only have had a protection need in 2022 may also have a food and WASH need this year. This can be seen in the cumulative figure for the severity of needs, which looks at the range of needs people have.

There has been an overall increase in the number of people in severity categories 3-5 (severe to catastrophic). As a result, the number of people targeted has increased from 5.5 million to 6 million. To fully implement the HRP, humanitarian partners will therefore need $1.3 billion to assist 6 million people prioritized for humanitarian assistance.

An activity-based costing approach – also known as unit-based costing – was adopted by the HCT for the HRP. Activity-based costing is a better gauge of the true cost of providing assistance (as opposed to a project-based approach). It is also a more transparent way of accounting for how resources are used. This approach allows partners to use the HRP for their own resource mobilization.

The application of the activity-based costing approach in north-east Nigeria is unique and articulated across different components. The first component aligns the HRP’s strategic objectives with respective sector objectives, activities and costings. The second ensures closer links between indicators and activities, broken down, for monitoring purposes, at the LGA level and by population group and gender. The third component, the bridge tool, (first created for the 2022 HRP planning and monitoring) was further refined to allow sectors to proactively guide their partners through the different project development phases to ensure projects align with priority activities in terms of both geographical area and target population, minimizing the possibility of overlaps.

To improve transparency, efficiency, effectiveness and comparability in both the planning and pricing process, activities are standardized across all sectors. Activities are designed to align with the needs identified in the HNO and the two-year HCT 2022-2023 HRP strategic objectives. Targets and deliverables are also standardized to allow for better aggregation and comparison across activities and sectors for more cohesive and comprehensive monitoring and reporting.

Sectors’ cost plans are based on targets derived from PiN estimations, response activities, and estimated numbers of people targeted for each activity by population group. Sectors also considered a range of data sources, including globally agreed costs per activity and contextually appropriate costs to estimate their financial requirements.

For each activity in this plan, sectors established a range of costs, considering cost differences in response modalities, population groups and geographical areas. Sectors also considered the additional costs of implementing measures to improve access to services for vulnerable groups. Average costs were used to calculate the financial requirements per activity. Costing methodologies, data sources and ranges are documented at the sectoral level to allow for a review of cost ranges for any changes (e.g., exchange rates, inflation, transportation costs, etc.), and to ensure operational budgets are based on commonly agreed and realistic estimates.

For the HRP, most sectors noted the impact of inflation, resulting in the increased cost of basic supplies and services due to rising commodity prices and increased transport costs. For sectors, costing considerations have also been affected by beneficiary targets developed through a tighter prioritization process. For some sectors, changes in costs for 2023 are also impacted by strategic considerations to modify interventions to respond to existing needs. Sector-specific costing details are provided under each sector plan (see Part 3: Sector Objectives and Response).

In December 2022, OCHA organized a sector response plan discussion and peer review to ensure sector plans are aligned and anchored in the 2022-2023 HCT Humanitarian Strategy.