By Lennie Bazira Kyomuhangi-Igbodipe and Linn Dorin
Over the last decade, there has been a gradual, yet significant shift in the way large international donors give foreign aid in countries like Nigeria. Increasingly, major development donors, such as the United States Agency for International Development, USAID, have begun giving money directly to developing country governments and local non governmental organisations, NGOs.
Often referred to as “aid localisation,” this movement bypasses traditional international NGOs to directly empower grassroots organisations; ensuring aid reaches its intended recipients.
Amref Health Africa, a non-profit organisation with a focus on women and children that is committed to improving the health of Africans by partnering with and empowering communities, is one of many NGOs across Africa and South Asia that has experienced the impact of aid localisation.
Localised aid has dramatically changed the way these organisations operate, mostly in a positive way. With the right investment in local NGO capacity, localisation of aid can yield positive results in the long term. In addition to the benefits, the increase in direct funding from major donors has also created some unintended challenges.
Operational & financial burdens
For example, localisation has imposed new operational and financial burdens on aid recipients, many of which have gone unnoticed by international donors.
These include responsibilities related to grant applications and reporting systems – the responsibilities once typically handled by international NGOs, but now passed on to local partners.
These responsibilities have proven to be challenging for lots of in-country NGOs. Many do not have the strong operational systems needed to comply with the reporting demands. According to a new report surveying development experts, as many as 97 percent of aid recipients describe grant compliance – the process of tracking grant activities and budgets and adhering to donor compliance guidelines- as a growing burden.
This burden has increased demand for an already limited number of skilled operations and finance professionals, having predictable effects. Often, NGOs will recruit and train local administrative staff in financial and marketing tools, only to have them leave for higher-paying positions in the corporate sector.
Amref Health Africa has experienced these operations challenges and pressures. As the impact of aid localisation began to be felt, Amref Health Africa invested in tracking employee hours and allocating resources to build a team for grant applications.
Dividends: While this requiredsignificant upfront investment, these systems are now paying dividends, allowing new grants and improved efficiency. Amref Health Africa is also sharing lessons and helping to strengthen local operational and financial capacity by sharing its own innovation initiative, known as Organisational Development and Systems Strengthening, ODSS.
While this is a success story, many smaller NGOs are struggling. The global community must act now to empower on-the-ground organisations that can help smaller NGOs meet the changing requirements, so they can continue to improve health and economic growth within their communities. But if we don’t address these challenges as a community, the overall effectiveness of aid will suffer.
Creative responses are already being seen around the world, led both by international and in-country NGOs. International groups are creating local affiliates within countries, investing in the operations and systems capacity of their grantees, and building regional technical support hubs.
Developing country organisations are beginning to build their own internal capacity to manage these funds while also considering outsourcing operations tasks, employing local fiscal agents, and establishing partnerships with private accounting firms.
While these changes are helping, more needs to be done to ensure that the localisation of aid has the greatest positive impact. Donor harmonisation – the aligning of grant requirements across many donors – would be a good first step.
Long-term effects: While the long-term effects of localisation are still largely unknown, it is critical that the international community takes action to build local capacity on-the-ground. Ensuring that developing country organisations are equipped with the resources, talent and tools they need is critical to helping us all reach the ambitious development goals we’ve set.
Lennie Bazira Kyomuhangi-Igbodipe is the Interim CEO, Amref Health Africa, while Linn Dorin is the Principal of Global Finance Strategies.
Source: All Africa
Attend the Food Security Seminar in June. Book your seat here
Follow Alive2Green on Social Media