by Linn Dorin & Dr. Lennie Bazira Kyomuhangi-Igbodipe
Originally posted on the Daily Nation
There is a small sign in the centre of Isiolo in the former Eastern Province that announces DEFEE milk bar, a pop-up dairy business founded in 2013 by 25 young Kenyans.
Part of a larger movement to provide income opportunities to people living with HIV/Aids, the group sells 110 litres of milk a day, enabling members to afford medication and housing.
The DEFEE Milk Group is a local initiative that has benefited from a broader trend shaping the global distribution of foreign aid. Over the past 10 years, major development donors have begun giving money directly to developing country governments and local NGOs.
Often referred to as “aid localisation”, this movement bypasses traditional international NGOs to directly empower grassroots organisations, ensuring that aid reaches its intended recipients. Localised aid has changed the way these organisations operate. With the right investment in local NGO capacity, localisation of aid can yield positive results.
The increase in direct funding has also created some unintended challenges. Localisation has imposed new operational and financial burdens on aid recipients, including responsibilities related to grant applications and reporting systems — responsibilities once handled by international NGOs.
These responsibilities have proven to be challenging for many in-country NGOs, many of which do not have the strong operational systems needed to comply with the reporting demands.
This burden has increased demand for an already limited number of skilled operations and finance professionals.
The global community must act now to empower on-the-ground organisations that can help the smaller NGOs meet the changing requirements to enable in-country NGOs to continue to improve health and economic growth within their communities.
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.
However, 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. This would help reduce paperwork for local NGOs, giving these organisations the time to focus on programme implementation.
While the long-term effects of localisation are still largely unknown, it is critical that the international community take action to build local capacity. 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 have set.
Dr Kyomuhangi-Igbodipe is the interim CEO of Amref Health Africa. Ms Dorin is the founding principal of Global Finance Strategies