The study was carried out by the Chr. Michelsen Institute ( Norway ) in co-operation with Strategy & Tactics ( South Africa ). The research team was composed of Elling N. Tjønneland and Nobi Dube. The team collected data and statistics from donor headquarters and the OECD Development Assistance Committee. Field visits to seven countries in Southern Africa – Botswana , Lesotho , Malawi , Mozambique , South Africa , Zambia and Zimbabwe – were carried out between 6 and 24 February, 2007. During the country visits the team interviewed a range of aid officials, representatives of civil society and other stakeholders. A list of all individuals interviewed by the team is provided in annex 2.

 

The draft report was presented at a roundtable consultation between the Southern Africa Trust, donor agencies and civil society representatives in Gaborone on 2 March 2007.  The team has attempted to address all the issues and comments received at the Gaborone consultation.

 

The team benefited from the support and assistance of a number of people. At the Southern Africa Trust Barbara Kalima-Phiri, Thembinkosi Mhlongo and Elizabeth Byaruhanga provided support, information and feedback throughout the process. At CMI Kari Heggstad prepared the statistical tables and collected data for the team. Matthew Smith of Strategy & Tactics provided important inputs in the preparation and early stages of the process. Above all, the team thanks the numerous individuals in donor agencies and civil society organisations. They gave graciously of their valuable time to provide information, analysis, interpretations and explanations. The views of all of these stakeholders were crucial in helping the team to formulate its assessments and recommendations.

 

Needless to say, the views and recommendations expressed in this report do not necessarily reflect those of the Southern Africa Trust, its Trustees and members of staff or those of CMI and Strategy Tactics.

 

Summary

I

 

Significant changes are taking place in the global aid architecture. A number of efforts are also being made to mobilise additional development finance and to make aid more effective in reducing poverty. The purpose of this study commissioned by the Southern Africa Trust is to generate knowledge and insight about how changes in global aid policies is affecting donor support to civil society in Southern Africa.

 

The report notes that civil society has a critical role to play in ensuring that aid becomes effective in reducing poverty, but also finds that traditional donor agencies are not always strong in providing direct support to strengthen the capacity of civil society to participate in poverty reduction and to make governments more accountable. The report identifies a number of critical issues which needs to be addressed by donor agencies and civil society organisations. This includes the role of NGOs in service provision and how this relates to sector- wide programmes and budget support; the linkages between support to civil society and support to governments in poverty reduction and efforts to improve governance; the scope for increased practical co-operation between donor organisations, including intermediaries; the role of civil society in advancing regional co-operation and integration; and the tensions between support to advocacy versus support to  organisational development. 

II

 

Foreign development assistance is a major source of funding for civil society organisations throughout Southern Africa. The report identifies a number of current and emerging trends in development assistance which in various ways may impact on the volume and quality of support provided.

 

Several efforts are currently being made to increase the effectiveness of aid provided to developing countries. This is increasingly revolved around the concepts of alignment, harmonisation and ownership. Through the Paris Declaration and, in Southern Africa, the Windhoek Declaration, a practical blueprint is emerging which it is assumed will improve the quality of aid provided and help reduce poverty.

 

Aid effectiveness has so far focused almost entirely on support to the state. Little attention has been paid to the role of civil society and how support to that sector can be improved. Based on data from donor agencies and from interviews with aid officials, civil society representatives and other stakeholders in seven SADC countries (Botswana, Lesotho, Malawi, Mozambique, South Africa, Zambia and Zimbabwe) the report makes a number of observations. The report finds that aid to civil society is significant and increasing. It also notes that the bulk of this aid is channelled through Northern or international NGOs with only a minor portion being disbursed directly from the embassy or agency mission to local civil society organisations.

 

The report also finds that tied aid is very prominent in civil society support, mainly through the extensive use of Northern NGOs as a channel for civil society support.  

 

The report also finds that the main share of donor support to civil society is provided to organisations providing services in a range of sectors such as health, education and agriculture. This has expanded with the additional funding to civil society organisations active in the HIV/AIDS area. A minor share is provided for civil society engagement in governance issues and efforts to make public policy more accountable. Such support is however, increasing in countries where donors provide budget support.

 

Furthermore, the report finds that support to civil society in Zimbabwe is large, mainly because civil society organisations are used as service providers and implementers of donor programmes in that country. South African and South African-based organisations, particularly NGOs, are also increasingly seen as channels for donor support to civil society in the region. Finally, it is noted that support to and through civil society has been important in regional support-programmes.  Limited efforts have been made to strengthen civil society’s capacity to engage in policy dialogues (beyond the significant support provided to a small number of specialised NGOs).

 

The main donors to civil society in the region is a small group of bilateral agencies, but there has been an influx of a number of new special purpose funding facilities and philanthropic foundations. A few donor agencies which traditionally have not provided much support to civil society have also moved into this field. This had led to increased funding but also added significantly to the diversity and the complexities of the architecture behind civil society support. The role of the World Bank in providing direct support to civil society is limited. The Bank has however a strong influence through its role shaping the policy environment in many countries. It has helped improve the conditions for dialogue between governments and civil society.

 

 

III

 

 

There is a variety of support models and delivery mechanisms in place to support civil society. Nearly all of the traditional donor countries also have a variety of budget lines and facilities for financial support in addition to those provided directly from the agency in the field.

 

At the country level support is either provided directly from the agency mission through a civil society account or as a subcomponent of other programmes. Most support is however, provided through indirect channels where agency missions outsource the management to others. This can be NGOs in their home country, local funding facilities or umbrella organisations such as NGO coalitions or civil society networks.

 

There is a clear tendency for some, but not all, bilateral agencies in the field to reduce their direct support to individual civil society organisations in favour of local and often joint delivery facilities. In some countries, this trend is coupled with an expanded use of international and Northern NGOs as delivery mechanisms. This is very evident in service delivery but some agencies also use such organisations to provide capacity building support and small grants to community based organisations. Support to national NGOs focusing on governance issues and advocacy tend to be funded directly from the agency mission. At lower levels and in communities such support tends to be provided either through new joint/local funding facilities, or through Northern NGOs.

 

The extent of donor co-operation in providing support to civil society remains limited, but it is growing among the bilateral agencies in the field. There is little co-ordination involving other support channels. Intra-donor co-ordination also remains limited.

 

Donor co-operation is mainly confined to donor forums where experiences and lessons learnt may be exchanged both at the technical and more strategic level. There are also a growing number of examples where smaller groups of likeminded donors – but rarely involving more than two or three agencies – agree to co-fund or even establish a donor pool to support a specific organisation or programme.

 

The impacts of these emerging trends cannot be measured at this stage. The report does, however, conclude that certain types of civil organisations are better resourced than before. Civil society networks and organisations have emerged as an alternative voice and opinion to government, but their capacities to engage in public policy debates are in most countries limited and even more so at the local and district levels.

 

The traditional donor agencies have so far not proved very effective in providing support for organisational strengthening and capacity development of civil society. The agency missions rarely have sufficient staff to provide this type of support. Another major limitation is also that most of the main donor agencies have not yet developed a proper strategic approach for civil society support. For many agencies civil society is simply an instrument in place to provide services and implement activities. New efforts and approaches by some agencies are however, being developed which may make a small difference.

 

Most regional support is provided to professional NGOs. It was also found that few donor agencies have been able to link efforts to support civil society at the country level with support at the regional level.

 

 

IV

The final chapter concludes that civil society have a critical role to play in ensuring that that a more harmonised aid to governments become more effective. A number of critical issues need to be explored and addressed to make civil society support more effective. This includes the role of civil society in service provision and as implementing agencies for donor programme. The linkages between support to governments and support to civil society in poverty reduction and efforts to improve governance also requires further study, does it strengthen the capacity of civil society in policy engagement? The study also notes that there are limitations to harmonisation and its ability to ensure increased effectiveness. The study argues that it is important to maintain a diversity of funding channels, and to recognise that each donor agency may have different strengths and weaknesses.

 

However, the report concludes that a number of steps can and should be made to improve donor co-operation, especially at the practical and strategic level. Donor fora enabling discussion and sharing of experiences are important. Likewise there is scope for much improvement in technical co-operation to minimize transaction costs for grant recipients. Frameworks for harmonisation of aid to governments through budget support and sector wide programmes may also help facilitate better co-operation in supporting civil society both in sectors and on cross-cutting governance issues.

 

The report also identifies important entry points for improved policy engagement between civil society and SADC both at regional, thematic and national levels. Recent developments between SADC and its international co-operating partners pose new challenges and new opportunities for engagement.

 

Finally, the conclusion notes that support to umbrella bodies has been an important trend in donor support to strengthen civil society and their capacities to participate in policy dialogues. Impressions from field visits are, however, that this focus unintentionally may have led to a situation where the secretariats of the umbrella or network organisation increasingly take responsibility for advocacy activities while network functions are pushed to the background.

 

Significant changes are taking place in the global aid architecture. A number of efforts are being made to mobilise additional development finance and to make aid more effective in reducing poverty.  The implications of these new trends and initiatives are the topic for this study commissioned by the Southern Africa Trust. It is a first attempt to generate systematic knowledge and insight about how these changes in global aid policies are affecting donor support to civil society in Southern Africa.

 

Chapter 2 provides an overview and discussion of current and emerging trends in aid policies and aid flows and how it relates to Southern Africa. Then the Chapter identifies the main trends in foreign donor support to civil society in the region. A main focus is on the aid effectiveness debate and how the evolving new aid frameworks are affecting support to civil society in Southern Africa.

 

Chapter 3 gives a more detailed presentation and analysis of the support models for civil society employed by donor agencies. The Chapter discuss and assess donor approaches and delivery mechanisms, regional support efforts, types of support provided and the nature of aid harmonisation.

 

The final Chapter 4 summarises key findings and highlights three critical issues emerging out of the previous chapters: harmonisation versus diversity in donor support; regional development and policy engagement; and the role of civil society coalitions and networks.

2.1 From Paris to Windhoek : Aid policies and aid effectiveness

 

The Millennium Summit in 2000 sought to lay the foundations for renewed global efforts to reduce poverty. At the subsequent 2002 International Conference on Financing for Development (Monterrey) world leaders agreed to make aid one of the central pillars of a global development partnership geared towards the reduction of poverty. Some progress has also been made and aid flows to developing countries have increased in real terms every year since 2002. An increasing share of the new aid flow is going to a number of new aid recipients – such as the Balkans, Afghanistan and Iraq.

 

Aid flows to Africa has also increased in recent years although it is still significantly behind the pledges made by the main donor agencies. It is also far away from the target of spending 0.7% of the gross national income on development aid. At the G8 Summit in Gleneagles in 2005 the G8 leaders committed themselves to doubling the aid flow to developing countries by 2010. They promised – and this was reiterated at the 2006 G8 meeting in St. Petersburg - to increase aid to Africa by USD 25 billion a year. So far they are significantly behind schedule. Survey data from the Africa Partnership Forum indicates that the increase in aid allocations to Africa over the next two years (2007 and 2008) will be very modest. Another disturbing feature is that much of the new aid that is forthcoming is really not new aid, but tied to cancellations of debt. Most of the increases in the aid flow to Africa are in fact linked to debt cancellations, emergency assistance and other special purpose grants. [1]

 

However, other financial flows to Africa are increasing. Foreign direct investment has grown significantly in recent years. Remittances are also significant and are an important source of finance in many countries. And above all: financial inflows from countries such as China , India and Brazil are becoming significant and growing rapidly.

 

Table 1 below presents the official aid disbursements figures from OECD countries to seven SADC countries in the 1995-2005 period.

 

Table 1 - Total Aid Disbursements from all Donors 1994-2005

 

Source: OECD.stat with the datasetDAC2a: Official Development Assistance (ODA) - Disbursements by recipient and type

 

Another issue which has become increasingly prominent is the issue of delivery of aid. Aid has a history of being delivered in the context of patronage and dependency with too many conditions attached. It has often been provided in a manner that is unpredictable, packaged in geo-strategic terms, poorly co-ordinated and tied to the procurement of goods and services in donor countries. Furthermore, the aid architecture has also become increasingly complex with a number of new agencies and delivery vehicles being established both within donor countries and at the international and global level. [2] According to one estimate there is now at the global level more than 1000 financing mechanisms many of them with special propose grants in the health sector. The aid architecture has become increasingly more complex. At the same time it suffers from the absence of a central architect that can define the direction of change and ensure that the effectiveness of aid that is delivered is increased and help contribute to development and poverty reduction.

 

This has led to a series of global efforts focusing on how to improve the delivery and effectiveness of aid. These efforts have increasingly revolved around operationalising the ideas of alignment, harmonisation and ownership. Alignment basically means that donors are expected to base their overall support on partner countries’ national development strategies, institutions and procedures. Furthermore, donors should work together in this process to be collectively more effective and less burdensome on recipients (harmonisation), e.g., by establishing common arrangements at country level for planning, funding and implementing development programmes. This will help, it is assumed, to ensure improved ownership by developing countries – they should exercise effective leadership over their development policies, strategies and co-ordinate development efforts. Mutual accountability goes to the heart of these challenges. Recipients are highly accountable to donors, but donors are seldom accountable to recipients.

 

The aid effectiveness debate has also entered the debate about UN reform. Two countries in the region (Mozambique and Tanzania) have also been selected as pilot countries for efforts to make UN more effective on the ground by merging UN offices, programmes and budget lines into one. This will be implemented from 2008.

 

The Paris Declaration on Aid Effectiveness (2005) is the latest and most advanced expression of these concerns. Signed by donor countries, multilateral aid agencies, recipient countries and a few international NGOs it seeks to address these issues. The signatories subscribed to some 50 specific commitments to improve aid and, for the first time, agreed to measure progress with a set of indicators and targets. [3] The Paris Declaration has emerged as a practical blueprint for many donor agencies seeking to deliver aid in a spirit of mutual accountability.

 

The Paris Declaration has also had important implications in Southern Africa. At the regional level a similar Windhoek Declaration was adopted in April 2006 at SADC’s consultative conference with their international cooperating partners. [4] This Windhoek Declaration is closely modelled on the Paris Declaration.

 

Since the adoption of the Windhoek Declaration SADC and their co-operating partners have been preparing an implementation plan specifying objectives, outcomes, activities, time frames and indicators. The current draft (18 January 2007) of the Windhoek Declaration Implementation Action Plan identifies inter alia 10 objectives and 13 indicators linked to ownership, alignment, harmonisation, managing for results and mutual accountability. A major element in this plan is the establishment of thematic groups bringing SADC and donor agencies together in addressing key challenges and priorities in the regional co-operation and integration agenda. Two thematic groups are operational – HIV/AIDS and water with respectively Sweden and Germany acting as lead donor/coordinator. Thematic groups for trade, investment and finance (EU), transport (UK), energy (Norway), agriculture and food security (UK), have been launched and will become operational over the next few months. A thematic group for natural resources and the environment is also in the process of being established. The coordinating core group (or alternatively the wider task force) between donors and SADC (co-ordinated by EU) may emerge as thematic group for crosscutting capacity building support to SADC (EU, GTZ and the World Bank are the main donors here). A thematic group dealing with politics, defence and security issues are expected to be established at a later stage and following further work relating to the operationalisation of SADC’s strategic plan in this area.

 

A number of efforts to reform delivery of aid and improve aid effectiveness have also been made at the country level. This is particularly evident in countries where a shift to a more enabling pro-poor environment has been central to the donor-recipient relations. This has mainly revolved around a shift from direct project support to developing mechanisms of sector wide programme and budget support, including development of common management arrangements, using national systems to improve coordination of external assistance. The international financial institutions, spearheaded by the World Bank, have played a key role in this process. This shift is very evident in countries such as Malawi, Mozambique and Zambia. South Africa and the International Development Cooperation Unit in the National Treasury have been particularly active in the aid effectiveness debate and have been pushing hard for improved delivery of aid. South Africa is also one of the country cases in OECD DAC’s own monitoring of the implementation of the Paris Declaration. South Africa, however, is in a different position compared to most other SADC countries – the aid flow to South Africa is insignificant measured as a share of government revenue (less than 1%) or as a share of GDP (less than 0.5%). [5]

 

A number of other features of international politics and the global economy will have the potential to impact strongly on aid flows, delivery mechanisms and aid effectiveness to the SADC region. Of particular importance is the role of the new regional powers in the South who are emerging also as new donors to Africa. The role of Brazil, India and especially China are important here. As donors they are relatively insignificant – their main direct impact is linked to trade and investment. China, however, is also emerging as a major supporter of infrastructure development through provision of soft loans. Will this undermine or strengthen poverty reduction in Africa? How will it impact on aid volumes, the efforts to improve delivery of aid and aid effectiveness? How will it impact on the role and performance of the traditional donor countries? There are no clear answers to such questions. It may reinforce the pressure for improving aid, it may strengthen the bargaining powers of recipient countries, or it may undermine ongoing efforts to harmonise and improve delivery of aid. At this stage perhaps the main conclusion that can be drawn is that the entry of these new powers will reinforce the need for African countries to strengthen their capacities to engage with external actors and turn challenges into opportunities. [6]

 

Closely related to these developments is also South Africa’s role as regional power and emerging donor in Africa. Several donor countries have responded to this by exploring opportunities for developing “trilateral” relations with South Africa in third countries. This has included use of development aid enabling South Africa to increase their engagement in other countries (e.g. in DRC and Sudan), to use South African institutions as delivery mechanisms of aid, or to provide funding to the Department of Foreign Affairs and South Africa’s African Renaissance Fund. Such efforts may well increase in coming years as some donor countries are scaling down their aid contributions to domestic developments in South Africa. Another emerging trend which also may impact on aid policy and aid flows to Africa is the growing emphasis on public-private partnerships in delivering services. In development aid this is perhaps most evident in some of the global health delivery programmes which involves private sector companies. This may well increase and expand into other sectors such as agricultural production. This may lead to the establishment of new global funding mechanisms and initiatives with an impact also in Southern Africa.

2.2. An overview of civil society support

 

The Paris and Windhoek Declarations and the ongoing discussion on aid volumes, delivery mechanisms and aid effectiveness have focused almost entirely on support to the state and the public sector. The Paris Declaration only contains passing remarks committing partner governments to develop national development strategies through broad consultative mechanisms. Governments are also committed to systematically involve a broad range of development actors when formulating and assessing progress in implementation of national development strategies.

 

Limited attention has so far been paid to the role of civil society and how aid that sector can become more effective in the discussion following the adoption of the Paris Declaration. A likeminded group of bilateral donor countries (the Nordics, UK, Ireland, Netherlands and Canada) has met and initiated a discussion around these issues. This has so far led to the commissioning of a series of studies to be completed in 2007. DFID is sponsoring two studies: one on “multi-donor approaches to working with civil society and engaging with non-traditional civil society” and one on “Evaluation of citizens’ voice and accountability”. Norway is the lead agency for a multi-donor “study of trends, impacts and effectiveness of different models for supporting civil society at the country level”. The next high-level meeting on the Paris Declaration to take place in Accra in April 2008 is also expected to address the role of civil society in advancing aid effectiveness.

 

In pure quantitative terms, civil society occupies a very prominent place in official development assistance. A large share of development aid is channelled through Northern and international NGOs acting as delivery mechanisms of aid or – but on a more limited scale - directly to local civil society organisations in the South. Proper statistics are not available, but it is estimated that perhaps as much as one third of aid is channelled to or through civil society organisations. [7]