DFID’s aid reviews: Steps in the right direction?

Yesterday’s announcement by Andrew Mitchell, Secretary of State for International Development, signifies an exciting shift for his department. The Department for International Development’s (DFID’s) aid reviews have been an opportunity for it to take a step back to comprehensively consider where, when and how effectively its money is spent. In particular, Save the Children welcomes the strong focus on results, impact and only funding high-performing multilateral agencies.

We believe high-impact UK aid can help to save millions of children’s and mothers’ lives and ensure millions more get a chance to fulfil their potential, through schooling and jobs.

Responsible exit plan
We are also pleased to see DFID concentrating its resources in many of the world’s poorest and most fragile countries, for example Ethiopia, where over 39% of people are living in poverty. The challenge now is for DFID to ensure that it has a responsible exit plan in those countries where funding is being cut. Many of these are poor African countries, still heavily dependent on aid, so ensuring there is an alternative way to finance DFID’s previous activities will be key. Burundi, Niger, Lesotho and Gambia are cases in point.

All four of these sub-Saharan African countries are exceptionally poor – in the bottom quintile of the Human Development Index. They are also heavily aid dependent. In Burundi the civil war, corruption, poor access to education and the effects of HIV and AIDS have resulted in a very low gross domestic product. As a result, overseas aid accounts for a large percentage of gross national income – about 44%.  Meanwhile in Niger and Gambia it accounts for about 12% and in Lesotho about 7% of total GNI.

Since 2005 the UK has provided an average 10% of total bilateral funds to Gambia and Lesotho and 8% to Burundi making it one of the largest of the Development Assistance Committee’s bilateral donors. The majority of these funds have been invested in essential services such as healthcare and schools. In Burundi 34% of DFID’s 2009/10 bilateral aid was invested in healthcare and of that 37% was spent on improving maternal and neonatal health services. These funds are essential for Burundi’s progress towards Millennium Development Goals 4 and 5.

Strong reform agenda
DFID must also build on its multilateral review with a strong reform agenda to ensure poorly performing multilateral agencies are made more effective and results-orientated. Reform should specifically seek to improve multilateral effectiveness and accountability. Effectiveness should include a push for multilateral agencies to better direct their efforts towards poverty reduction, drawing on their comparative advantages over bilateral donors, for example technical depth and geographic spread.

Accountability reform should seek to ensure that multilaterals are more responsive to developing countries, and to people in poverty, and are transparent and formally accountable to that end.