Wednesday May 30, 2018
By Dan Honig
“The credibility of the Somali Government hinges largely on its ability to deliver for the Somali People.”
International partners clearly recognise the importance of using
country systems to achieve broader statebuilding goals, as this line,
taken from the May 2017 Communiqué of the London Conference on Somalia,
indicates. Yet, international partners continue to deliver aid primarily
through parallel systems, as the Government struggles to raise
sufficient domestic revenue to deliver tangible results for its people.
Of an estimated USD 1.75 billion in official development assistance (ODA) for Somalia in 2017, only USD 103.9 million
was delivered on budget (approximately 6% of total ODA). Excluding
humanitarian aid from this calculation, the proportion of on budget aid
rises to 14%, which still lags significantly behind the use of country
systems in other fragile states. For example, donors delivered between
28-44% of development-focused aid on budget in the Central African
Republic, Mali and Liberia in 2015.[1]
Why the inconsistency? International partners appear to be stuck in a
“chicken or egg” conundrum in Somalia. On the one hand, they recognise
that using country systems is critical for building national capacity
and achieving broader statebuilding objectives. Yet, on the other hand,
the weakness of these systems is often the excuse donors cite for
avoiding the use of country systems. Given the explicit focus on
statebuilding in Somalia, prioritising short-term operational concerns
over the long-term benefits of government systems building appears to
run counter to the international community’s stated objectives.
Our recent World Bank and United Nations joint report
examines donors’ decision making about the use of country systems,
exploring both the perceived and actual risks and benefits associated
with such use.[2]
We find that a number of factors related to internal donor
decision-making practices preclude using country systems in Somalia.
These include:
A narrow focus on fiduciary risks. Fiduciary
risk is an important, but far from the only, consideration in
determining which tools are best for achieving desired outcomes.
Moreover, the risks and benefits of using country systems should be
considered not in isolation but, rather, alongside those of alternative
delivery channels, like the use of nonprofit, private sector or
multilateral implementers. Fiduciary risk and spending efficiency are
real concerns in Somalia, whatever the implementation modality. It is
less obvious that these concerns, taken as a whole, augur clearly for or
against the use of country systems. In short, donors’ internal
“plumbing” may be undermining their own higher level policy ends and
commitments.[3]
An asymmetric focus on short-term risks. Short-term
risks with the potential to grab domestic headlines, like the
misappropriation of funds, often weigh heavily on international
partners’ decision-making when it comes to using country systems. If
Somalia were to slip backwards into conflict, it would not be seen in
donor capitals as an aid success story. Its collapse would also not be
directly attributable to a particular donor project or even a particular
donor. The mechanisms for realising reputational risk and attributing
success may lead to an asymmetric focus on short-term risks, making the
tactics of international partners unduly conservative.
Insufficient focus on the benefits. Using
country systems can focus both donor and government attention on the
quality of those systems, both financial and non-financial (e.g.
payroll, human resources). Where used in Somalia, international
attention and resources shift from the operational challenges of a
parallel system towards those of government, creating “positive
spillovers” for country systems. This approach not only uses the muscles
of government systems, but also actually strengthens them, like
exercise for the human body. Using country systems can also, in many
cases, provide better value for money than alternatives. This is a
critical consideration in a high-cost, fragile environment like Somalia
where an estimated 30-60% of project funds are consumed by additional
overheads related to project monitoring and delivery.
To overcome these pitfalls, international partners could pursue a
more constructive way forward by replacing technical assessments of
Somalia’s country systems in isolation with an explicitly comparative
approach for choosing delivery modalities. Putting the short- and
long-term costs, benefits and risks side-by-side of NGO implementation
and government implementation, for example, and then choosing which is
best, may lead to a gradual increase in the use of country systems.[4]
No delivery modality is without risk; both country systems and
alternative delivery channels have drawbacks. But these options have
differing strengths, depending on the type of project, sector or
situation. In finding the right mix of tools, both government and
international partners need to focus more on the goal to which they are
jointly committed in Somalia: statebuilding.
Sarah Louis Cramer co-facilitates the
Somalia Use of Country Systems Working Group made up of government and
international partners, which works closely with the OECD-hosted
Secretariat of the International Dialogue on Peacebuilding and
Statebuilding, to keep members informed and committed to tracking and
advancing progress on using country systems.
Use of country systems refers to a variety
of ways in which international partners can engage with national
counterparts to deliver aid ranging from alignment with national
priorities to direct implementation by government.
Notes
[1] Humanitarian aid was excluded from these calculations.
[2]
Members of the International Dialogue on Peacebuilding and
Statebuilding recommitted to the need for greater use of country systems
in the Stockholm Declaration in 2016. International Dialogue on
Peacebuilding and Statebuilding 2016.
[3] This image draws from Bain, Booth, and Wild 2016.
[4] Use of Country Systems Working Group 2017. Interview #15; Interview #36.
Dan Honig is an Assistant Professor of International Development, Johns Hopkins SAIS, and Sarah Louise Cramer, UN-World Bank Aid Coordination Officer for Somalia