The Development Aid Business
• There is an unprecedented resolve on the
continent to turn away from the begging bowl
and engage in new efforts to build a better life.
Thabo Mbeki
• Development aid cannot continue indefinitely. The
task is therefore to use limited resources as
effectively as possible. This can only work through
good governance which taps that country's
economic potential.
Angela Merkal, German Chancellor at the High
Level Plenary Meeting of the UN General
Assembly on the Millennium Development Goals
21st September 2010
Total ODA and ODA in Africa
140000
120000
4US millions
100000
80000
60000
40000
20000
0
2002
2003
2004
2005
2006
Year
2007
2008
2009
The Aid Business
• ODA budget - US$ 140 billion (2010)
•
> 100,000
•
– 10,000 employees
• If Aid were a business it would rank 19th in the
world by turnover on a par with Allianz
• In terms of employees Aid employs the same
number of people as GlaxoSmithKline
MAJOR ODA DONORS
6
7
At sector level: Procurement chain of donors in
health in Kenya
Constructed and produced by Steve Kinzett, JSI/Kenya - please communicate
any inaccuracies to skinzett@cb.jsikenya.com or telephone 2727210
Commodity Logistics System in Kenya (as of April 2004)
Commodity
Type
(colour coded)
Contraceptives and
RH
equipment
Condoms
for STI/
HIV/AIDS
prevention
STI
Drugs
W
H
O
Vaccines
and
Vitamin A
Essential
Drugs
Blood
Safety
Reagents
(inc. HIV
tests)
TB/Leprosy
Malaria
AntiRetro
Virals
(ARVs)
MOH
Equipment
Laboratory
supplies
Organization Key
Government
World Bank Loan
Bilateral Donor
Multilateral Donor
NGO/Private
Source of
funds for
commodities
Procurement
Agent/Body
Point of first
warehousing
Organization
responsible
for delivery to
district levels
Organization
responsible for
delivery to subdistrict levels
U
S
A
I
D
K
f
W
E
U
U
N
F
P
A
U
S
A
I
D
K
f
W
E
U
R
O
P
A
U
N
F
P
A
KEMSA
Regional
Depots
NLTP
(TB/
Leprosy
drugs
D
F
I
D
Crown
Agents
GOK
B
T
C
J
I
C
A
Government
of Kenya
KEMSA Central Warehouse
KEMSA and KEMSA Regional Depots
(essential drugs, malaria drugs,
consumable supplies)
C
I
D
A
G
A
V
I
Japanese
Private
Company
UNICEF
G
D
F
K
N
C
V
S
I
D
A
D
A
N
I
D
A
GTZ
UNICEF
MEDS
(procurement
implementation
unit)
KEPI Cold
Store
JSI/DELIVER/KEMSA Logistics
Management Unit (contraceptives,
condoms, STI kits, HIV test kits, TB
drugs, RH equipment etc)
US
Gov
GOK, WB/
IDA
C
D
C
The
"Consortium"
(Crown Agents,
GTZ, JSI and
KEMSA)
MEDS
KEPI
(vaccines
and
vitamin A)
Mainly District level staff: DPHO, DPHN, DTLP, DASCO, DPHO, etc or staff from the Health Centres,
Dispensaries come up and collect from the District level
Global
Fund for
AIDS, TB
and Malaria
MEDS
(to Mission
facilities)
MSF
MSF
NPHLS store
Provincial and
District
Hospital
Laboratory
Staff
Private
Drug
Source
8
8
… may create coordination problems!
9
10
Demand for aid
• Confronting the challenges of financing
for development : a global response
• Ownership: Countries have more say over their development
processes through wider participation in development policy
formulation, stronger leadership on aid co-ordination and more
use of country systems for aid delivery.
• Inclusive partnerships: All partners - including donors in the OECD
Development Assistance Committee and developing countries, as
well as other donors, foundations and civil society - participate
fully.
• Delivering results: Aid is focused on real and measurable impact
on development.
• Capacity development - to build the ability of countries to manage
their own future - also lies at the heart of the AAA.
Africa's share of global FDI projects
(in %)
6.00
5.20
4.90
5.00
4.50
4.40
4.00
3.60
3.60
3.20
3.00
2.70
2.00
1.00
0.00
2003
2004
Source: fDI Intelligence
2005
2006
2007
2008
2009
2010
Barriers to investing in Africa
Low quality of life
Poor price/qualityratio of labour
Inefficient tax regime and customs procedures
Complex language, culture and values
Poor utilities and energy security
Lack of entrepreneurial culture
Poor access to highly skilled labour
Poor telecommunication infrastructure
Customers are inaccessible
Inefficient administration/regularory environment
Poor transport and logistics infrastructure
Weak Security
Corruption
We are a local organisation
Unstable p[olitical environment
0%
5%
Source: Ernst and Young
10%
15%
20%
25%
30%
35%
40%
45%
1. Mission Creep
2. Exit Strategy
3. Symbiotic Relationship
derek.fee@devaidpartners.com