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We have an update on a troubled global supply chain project that has come under fire yet again.
Also in today’s edition: In the United Kingdom, Oxfam institutes cuts after “a very challenging year,” while private firms are possibly hoodwinking the U.K. government.
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In 2023, my colleague Michael Igoe and The Bureau of Investigative Journalism published an investigation into USAID’s global health supply chain project — a $9.5 billion endeavor to deliver lifesaving health commodities around the world.
The reverberations are still being felt.
U.S. Rep. Mariannette Miller-Meeks, a Republican from Iowa, has written to USAID Administrator Samantha Power with “serious concerns” about the project, which was formally known as GHSC-PSM, or Global Health Supply Chain – Procurement and Supply Management, the largest project that USAID has ever funded to date.
“Specifically, we are concerned with the merits of the initial contract award process, reported corruption allegations, transparency deficiencies, project performance, and the project’s long-term sustainability,” she wrote to Power in a Dec. 9 letter obtained by Devex.
In addition to questioning Power about the ongoing project — which is led by the U.S.-based development firm Chemonics International — Miller-Meeks’ letter seeks details about the project that will replace it, a restructured effort known as NextGen that could be worth up to $17 billion.
Read: US lawmaker presses Samantha Power on $9.5B USAID global health project
In related news, Chemonics — currently the largest for-profit contractor for USAID — has agreed to pay the U.S. government $3.1 million in a settlement agreement related to fraudulent billing by a Nigerian subcontractor for the global health supply chain project, Michael writes.
The subcontractor Zenith Carex is a Nigerian logistics company that Chemonics hired to provide last-mile and long-haul delivery services for cold chain commodities, such as reagents for HIV tests, in Nigeria from 2017 to 2020. In 2020, Chemonics disclosed to the U.S. government that the company had intentionally overbilled for these services and that those charges had been passed on to USAID.
“This settlement underscores that justice has no borders, and that USAID’s contractors and grantees must have systems in place to detect and prevent false invoices submitted by subawardees,” special agent in charge Sean Bottary of the USAID Office of Inspector General wrote in a statement about the settlement, which was reached Thursday.
A Chemonics spokesperson wrote to Devex that the settlement “now brings finality to this matter and we continue to deny liability as the subcontractor defrauded Chemonics and the U.S. government despite the controls and oversight both have in place.”
Read: Chemonics settles with Justice Department over subcontractor fraud
Related: Will bidding for USAID contracts be different under Trump? (Pro)
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Oxfam has imposed a partial recruitment freeze and cuts to spending on travel and consultants in the United Kingdom after a “very challenging” year when it recorded a net deficit of £28.4 million (about $35 million), my colleague Rob Merrick tells me.
The charity suffered a severe turnaround in the 2023-24 financial year which it attributed to a sharp decline in humanitarian appeals, resulting in a £32.6 million income drop. In 2022-23, it recorded a £39.7 million surplus.
Nevertheless, Oxfam GB pointed to “strong performance in our shops” that helped deliver a £3.6 million increase in unrestricted income to £175 million. Charitable spending rose by £18.9 million to £272.3 million.
“The past year has been extremely difficult with the world facing the triple threats of conflict, climate change and the cost-of-living crisis,” Halima Begum, the chief executive at Oxfam GB, said. “At the same time, we are facing a very challenging fundraising environment compounded by the sustained burden of rising costs.”
The statement said the cost-cutting measures have been introduced “to rebuild reserves over the next few years, and in light of an external environment which remains challenging.”
Staying in the U.K., the country’s shrunken aid budget is still being raided to pay the huge bills for hosting asylum-seekers — despite international criticism and the Labour government attacking the practice before it came to power.
Part of the explanation for the eye-watering sums involved — £4.3 billion ($5.4 billion) was lost to in-donor refugee costs in 2023 — lies buried in controversial deals with the private firms providing accommodation, Rob tells me.
One might imagine costs began to soar after the 2022 surge in refugees arriving in small boats crossing the English Channel, but research by the think tank Center for Global Development uncovered that the spike began soon after the 2019 signing of new Asylum Accommodation and Support Contracts.
The deals were expected to cost £4 billion over 10 years, but the private companies were paid £4.7 billion in the financial year 2023-24 alone, prompting allegations that ministers were taken for a ride.
Now Parliament’s Home Affairs Committee will hold an inquiry into asylum accommodation, including “how the Home Office has managed the AAS contracts.”
The findings will offer insight into whether government promises to restore the aid budget to its proper purpose can be delivered — because the potential bad news is that the contracts run until 2029, with a break clause in 2026.
Background reading: UK raiding of aid budget for refugee costs dwarfs rest of world
Three members of the World Food Programme Sudan country team died after an aerial bombardment hit the WFP Field Office Compound in Blue Nile State last Thursday. WFP Executive Director Cindy McCain said in a statement that she is “shocked and heartbroken by the tragic deaths.”
It’s not clear who was responsible for the strikes. WFP said it is working to establish the circumstances of the incident and McCain is calling for an investigation.
She said the “unnecessary deaths are another reminder of the risks that humanitarian workers face in conflict settings and complex operating environments like Sudan.”
In April 2023, fighting broke out between the Sudanese Armed Forces and the paramilitary group Rapid Support Forces, leading to a protracted civil war. More than 30 million people in Sudan will be in need of humanitarian assistance in 2025, according to the 2025 Global Humanitarian Overview. Moreover, 12 million people have been displaced since the start of the conflict, including 2.5 million people who fled the country altogether.
Related: ‘The world, as a whole, has dropped the ball’ on Sudan (Pro)
In Devex Global Voices 2024, we have gathered predictions for the year ahead in the fields of artificial intelligence, localization, climate, and more, as well as some of our most-read opinion pieces this year.
Today we’re featuring some of our most-read op-eds on development finance:
“Rather than revolutionizing development, impact investing is being co-opted by development groups, turning what was meant to be a financial tool into just another form of aid.”
—Read: Development funding is sidelining true impact investing by Elisabeth Fosseli Olsen
“We need a level and transparent playing field in the global governance structure where creditors and borrowers can negotiate as equals to meet debt servicing, human rights obligations, development objectives, and climate financing needs.”
—Read: A fair future for Africa starts with true and systemic IMF reform by Jack Odiwa
Read on for more of the most insightful global development professionals’ op-eds of 2024.
Cyclone Chido has claimed 94 lives in Mozambique and highlighted an underlying rift between locals and migrants in France’s Mayotte. [DW and AP]
Only 12 aid trucks have reached northern Gaza since October, Oxfam reported, accusing Israel of delaying humanitarian assistance and attacking shelters shortly after they received supplies. [France 24]
U.S. President-elect Donald Trump said he plans to launch a new anti-drug advertising campaign while reiterating his threat to label Mexican cartels as terrorist groups. [Reuters]
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