Accra, May 15, GNA – Survey conducted in developing countries on aid localization has confirmed that more aid is flowing directly to developing countries, benefiting aid recipients but posing significant operational and reporting challenges.
The survey, conducted by Global Finance Strategies (GFS), a subsidiary of Global Health Strategies (GHS), based in New York, USA, surveyed 52 leaders in the international development field, including 19 donor representatives and 33 representatives of aid recipients including Ghana.
The report titled: ‘Going Local-The Promise and Challenge of Aid Localization,’ revealed that localization trend, has been designed to empower grassroots organizations to access aid directly from donors for their activities.
International aid experts, who met in Washington DC to discuss the report said, there was a growing trend in the development world resulting in a shift by major aid donors towards giving money directly to developing country governments and local NGOs, bypassing traditional international development organizations.
Copied to the Ghana News Agency, the report highlighted several challenges associated with localization. Among aid recipients, 94 per cent said increased donor reporting and compliance requirements are a significant challenge.
More than 80 per cent of aid donors expressed concerns about the operational and systems capacity of their local grantees, while more than a third said they are ‘very concerned’ about grantee capacity to manage their own operations and finances.
The report identified steps aid recipients could take to meet mounting operational challenges, such as partnering with private-sector accounting firms, or outsourcing operations, reporting and compliance to private contractors.
It also discussed novel strategies that should be further explored, such as the sharing of back-office operations and resources among aid recipients to conserve funds and increase efficiency.
It identified a number of actions that donors were taking to alleviate this operational burden, including directly funding recipients’ operations departments, creating regional technical support hubs for aid recipients, and streamlining project reporting requirements.
The report also called on donors to do more to harmonize reporting requirements in order to minimize the burden on aid recipients.
Mr Linn Dorin, lead author of the report and Principal of Global Finance Strategies, said ‘Localization is happening, and we have to do everything possible to prepare and make sure it fulfills its promise of empowerment and increased efficiency whilst new approaches are necessary to help local aid recipients effectively absorb and manage this influx’.
Dr. Alex Coutinho, the former Executive Director of the Infectious Disease Institute at Makerere University in Uganda said: ‘The trend toward localization and utilization of indigenous NGOs comes with risks, but it will ultimately lead to capacity and sustainability within Africa and other developing countries’.
He explained that small NGOs in Africa often faced real challenges in managing direct aid, including finding the right people and skills to provide proper oversight and governance by their boards of directors and audit committees.’
Dr. Ariel Pablos-Méndez, the Assistant Administrator of USAID, noted that, the global health landscape has changed immensely in recent years, and local solutions were a priority for USAID.
‘The mission of USAID Forward is to encourage country ownership and country engagement.
‘To do that, donors need to work together to build capacity, not only for frontline workers, but also for the operations and management staff who are the stewards of this progress,’ he added.
Ms Karen Sichinga, the Executive Director of the Churches Health Association of Zambia explained that increase in direct aid was welcomed by many homegrown, indigenous African organizations, and has been seen as long overdue.
‘Of course, localization brings an increased operational burden, but we can handle it. Rather than saying local organizations lack capacity, donors should ask us what support we need to manage this increased burden,’ She added.
Global Health Strategies is an international consulting company working to ensure development and worldwide delivery of health products, technologies, and information whilst (Global Finance Strategies) is a global consulting firm that provides financial, strategic and operational counsel, capacity building and outsourcing services for NGOs, donors, governments and private sector companies.
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