SMART Aid

Transparency is critical

May 17th, 2010 9:26 AM UTC
By Carola Bieniek

“Everybody understands that building a school helps to fight poverty. They also understand that building a hospital helps to fight poverty. But that information might even be more important is not quite as easy to understand for most.” This is how one of the participants of our aid effectiveness day last week described the problem at hand. Aid achieves measurable results every day in many places around the world. Still aid can be improved. So ONE Germany asked: What does tomorrow’s effective development assistance look like?

First we invited experts from the German government, our NGO partners and multilateral institutions such as the OECD-DAC to discuss in two workshops what the Accra Agenda and the G8 are doing (or could be doing) to improve aid transparency.

African governments need information on what kind of donor support will be delivered by when. Donors need information to better coordinate their efforts. And civil society in North and South needs information – this is for example how ONE is finding out whether rich countries are keeping their promises, information that is then published in the annual DATA Report.

One of the panelists in the workshops was Bashiru Jumah from the Ghanaian Social Enterprise Development Foundation (SEND). SEND is increasing transparency in Ghana by gathering information on aid flows: they find out which funds are supposed to go where and then go to the recipients – in the villages – and assemble data on which funds arrived and what they were used for. This is quite a tedious job which requires lots of patience and hard work from volunteers all over the country. But it delivers great results: when the parliament learnt in April that money for school feeding programs did not make it to the schools as planned they immediately replaced the national coordinator for the program. Bashiru said about the role of his civil society in Ghana: “Civil society participates in implementing and controlling poverty alleviation efforts. And our government understands that they profit from that.”

In the evening we welcomed the development spokespersons from the 5 parties in the German parliament to a panel discussion.

Hans-Jürgen Beerfeltz, Deputy Minister in the Development Ministry, opened the evening by confirming that while the German government was concentrating on improving aid effectiveness they would not forget their promises, one of which was to increase the ODA/GNI ratio to 0.7% by 2015.

What followed was a lively discussion among the development spokespersons about whether the new government’s efforts to reform the implementing organizations were sufficient, whether multilateral aid should be reduced in favor of bilateral aid, and which sectors were critical to development.

Development spokespersons in the German parliament: Ute Koczy (Bündnis 90/Die Grünen), Sascha Raabe (SPD), Harald Leibrecht (FDP), Holger Haibach (CDU/CSU), Heike Hänsel (Die Linke)

We closed out the day with a reception which allowed panelists and listeners to continue to exchange their views in more intimate conversations. And looking at the discussions we were confirmed: development assistance is reducing extreme poverty. But to make it most efficient and most effective it needs input from everyone concerned – and the first step on that path is to distribute information transparently.

SMART Aid supports Ethiopian farmers to market their food

Jun 22nd, 2009 6:31 PM UTC
By Beth Adler

The Ethiopian Commodity Exchange (ECX), which opened in January 2008, provides a low-cost, low-risk way for Ethiopian farmers to trade and get a fair price for their produce. It trades coffee, sesame, haricot beans, teff, wheat and maize. The exchange ensures the quality of the produce, and manages delivery and payment through exchange warehouses and clearing. This is a huge step for smallholder farmers – 85 per cent of Ethiopia’s population – who rely on agriculture for their livelihoods. For years, they struggled to sell their produce at a competitive price as buyers had the power to set prices. When there was a good harvest, food prices plummeted. Now, after years of famine and market reforms that did little to alleviate hunger, they have a much better chance of increasing their incomes. The idea for the Commodity Exchange was developed by researchers at the Ethiopian Development Research Institute and the International Food Policy Research Institute (IFPRI). The IFPRI is one of 15 agricultural research centres supported by a collection of donor governments, private foundations, and international and regional organisations.

-Beth Adler

SMART Aid lays foundations for private sector investment across Africa

Jun 19th, 2009 2:51 PM UTC
By Nora Coghlan

The Investment Climate Facility (ICF) is an initiative that grew from the 2005 Commission for Africa and started operations in July 2007. Its aim is to work with receptive African governments “to make the continent an even better place to do business”. It is currently active in ten African countries and working on four pan-regional projects and two other initiatives. The ICF is funded by eight donor agencies – Germany, Ireland, the Netherlands, South Africa, the UK, the African Development Bank and the International Finance Corporation – and nine companies – Anglo American, The Coca-Cola Company, Microsoft, SABMiller, Sasol, Shell Foundation, Standard Bank, Unilever and Zain. Current projects cover issues such as improving land registration in Burkina Faso, Rwanda, and Sierra Leone; improving business registration processes in Burkina Faso, Liberia, Madagascar, and Rwanda; simplifying VAT administration in Lesotho; enhancing the commercial justice system in Mali and Rwanda; and improving customs administration in Senegal.

SMART Aid boosts food production in Malawi through fertilizer subsidy

Jun 17th, 2009 9:05 PM UTC
By Beth Adler

Since 2005/2006, the Malawian government has provided a fertiliser subsidy to smallholder farmers, a programme that is now supported by the UK’s Department for International Development (DFID). This subsidy provides vouchers to farmers to purchase fertiliser and seeds that enable them to produce a more robust crop. Like many African countries, Malawi has been prone to food shortages due to droughts and under-investment in agriculture. As recently as 2005, almost five million of Malawi’s 13 million people were in need of emergency food aid. The subsidy has made a substantial contribution to food security. In tandem with good rains and appropriate macroeconomic policies, it has enabled Malawi to produce a surplus of maize since 2007. In that year Malawi even donated maize to the World Food Programme and also sold some of its surplus in the region. While still a work in progress, there are early indications that the subsidy could also be fuelling other successes in Malawi, such as a decrease in the number of under fives who are severely underweight, and an increase in the number of meals per day people are eating.

-Beth Adler

SMART Aid boosts commerce with US through African Trade Hubs

Jun 17th, 2009 8:10 PM UTC
By Chris Scott

Trade, fuelled by economic growth and investment, is an essential tool for poverty reduction. One challenge for many African businesses is navigating the complex rules and regulations involved in exporting to lucrative developed country markets. The USAID “Trade Hub” programs are designed to help African businesses take advantage of the African Growth and Opportunity Act (AGOA) – an American preference program that permits the export of certain African goods to the United States duty- and quota-free. Four Trade Hubs – in Botswana, Senegal, Ghana and Kenya – are helping African entrepreneurs navigate US customs laws, identify export financing, find buyers, and get assistance with pricing and marketing. The hubs have been successful in helping businesses introduce products such as clothing, fresh flowers, and fruit juice to the United States. In total, since 2005, the four African Trade Hubs have generated an additional $60 million in exports to the US alone. The West African Trade Hub has been particularly successful in boosting the shea butter and cashew industries.

-Beth Adler

SMART Aid helps mobile phones bring banking to Kenya’s rural poor

Jun 17th, 2009 8:07 PM UTC
By Beth Adler

In Kenya, as with many places in Africa, opening a bank account requires a minimum deposit which is often beyond the reach of poor families. In rural areas, banks can be far away and inconvenient to reach. M-PESA is a money transfer system which allows people to deposit, withdraw, and transfer money by mobile phone without a bank account. The model was piloted by Vodafone with assistance from the UK Department for International Development (DFID). It was implemented in early 2007 by Safaricom, Kenya’s largest mobile phone provider. It now has approximately five million users. A worker in Nairobi can open an account at any M-PESA agent, in a local shop, a Safaricom dealer, or a petrol station. He/she can deposit earnings into an M-PESA account and transfer money to family members via SMS. The recipients go to a local store in their village and cash the SMS using a secret code contained in the message, and their identification card. Considering that mobile phone subscriptions in sub-Saharan Africa grew by more than 60 per cent annually between 1994 and 2005, and are still rising rapidly, the M-PESA model could be the money transfer mechanism of the future.

-Beth Adler

SMART Aid supports innovative health insurance in Rwanda

Jun 17th, 2009 8:04 PM UTC
By Beth Adler

Rwanda has made remarkable progress in improving the health of its people since the 1994 genocide. The Rwandan government, in partnership with donors, has scaled-up access to health insurance through local schemes called mutuelles de santé. This community-based health insurance scheme provides coverage for a variety of basic services for a small fee ($1.80 per year). Support from the Global Fund to Fight AIDS, Tuberculosis, and Malaria is currently subsidising the fee for those families least able to afford it. In 2003, approximately seven per cent of the population was covered by this subsidised insurance scheme; by 2009 the proportion had risen to around 85 per cent. Rwanda has seen significant improvements across a range of health indicators. The Ministry of Health is also providing incentives for health facilities to improve the care provided. As a result, the likelihood that women will give birth in a health facility has increased by more than twenty per cent. This incentivised system played a role in bringing AIDS treatment to more than 70 per cent of those who needed it by 2007, compared with just one per cent in 2003.

SMART Aid and private partnership helps Tanzania make bed nets for Africa

Jun 16th, 2009 5:57 PM UTC
By Beth Adler

A to Z Textile Mills in Arusha, Tanzania is an example of what can be achieved when aid works in tandem with private partnerships to support industry and employment – and when African countries reform their business climates to welcome investors. A to Z is the only African factory that manufactures long-lasting insecticide-treated mosquito nets to protect families from malaria, the leading killer of children throughout the continent. It’s a joint venture with a Japanese company Sumitomo Chemical, which gave A to Z a royalty-free technology license to produce the special nets which last at least five years without retreating. The nets are bought by the Tanzanian Ministry of Health, donor agencies and non-governmental organisations including UNICEF and Population Services International (PSI). They are used to fight malaria across Africa. The A to Z factory has the capacity to produce more than ten million nets a year. It employs 4,600 Tanzanians, mostly women, each supporting an average of six people. A to Z will be opening a stitching facility in Ethiopia in June 2009 and a factory in Nigeria in the near future.

-Beth Adler

SMART Aid opens school doors to the poor in Ghana

Jun 12th, 2009 7:47 PM UTC
By Nora Coghlan

As in many African countries, children in Ghana often missed out on schooling because their parents could not afford the school fees or needed them to help work in the fields or the home. In 2004, Ghana started a free compulsory Universal Basic Education Program, which abolished school fees and introduced a National School Feeding Program. Much of this was done with the help of donor funding. Between 1999 and 2006, donor support for basic education in Ghana more than doubled. Ghana is now on track to achieve 100 per cent basic education enrolment by 2015. The removal of school fees opened school doors to the poorest Ghanaian children; school lunches have helped improve attendance and retention rates. By the end of 2008, 595,000 children were receiving lunches through the program, many of them eating locally produced food purchased largely by the United Nations World Food Program. Thanks to this combination of measures, Ghana’s net primary school enrolment rates for boys increased from 60 per cent in 2004-2005 to 84 per cent in 2007-2008. Enrolment of girls increased from 58 per cent in 2004-2005 to 82 per cent in 2007-2008.

-Nora Coghlan

SMART Aid helps Ugandans fight corruption

Jun 12th, 2009 7:45 PM UTC
By Nora Coghlan

As ONE continues to advocate for SMART Aid, we’ll be bringing you examples on the ONE Blog of how effective development assistance, when implemented correctly, can save lives:

When the Ugandan government ended primary school fees in 1997, millions of the poorest children were able to attend school for the first time. Enrolments more than doubled over the next decade. Donor aid was needed to support the schools, but many donors were hesitant to invest in the system because of a reputation for corruption. With support through the World Bank’s International Development Agency (IDA), a Public Expenditure Tracking Survey in 1996 showed that only 13 per cent of education funding was reaching schools. As a result, donors made their support conditional on the Ugandan Government’s implementation of an anti-corruption programme. Through newspaper and radio campaigns, the Government informed parents’ associations of the amount of money their schools should be receiving; parent groups were able to act as watchdogs. As a result of this campaign, and other reforms to the education system, a second survey in 2002 showed that 80 per cent of resources were reaching schools. This model has been replicated in other African countries; it serves as a strong example of “bottom-up accountability”, engaging civil society, donors and governments to improve aid systems and deliver smarter aid continent-wide.