How USAID assistance funding for local partners fell in 2021

During a conference call in March for its latest quarterly business forecast, the U.S. Agency for International Development reaffirmed its localization agenda — a commitment that 25% of its funding will go to local partners by 2025. However, the most recent figures suggest that the agency's assistance funding to local organizations fell by more than $200 million in the fiscal year ending September 2021. In fiscal year 2020, USAID allocated $21 billion in funds altogether, with grants and cooperative agreements accounting for between $14 billion and $15 billion. Organizations based in low- and middle-income countries received $1.05 billion of that assistance funding — in other words, between 7 and 8 cents from each dollar — to deliver services domestically. In 2021, the agency allocated $16.8 billion in assistance funding, with $840.1 million — around 5 cents from each dollar — going to local groups. This represents a significant drop. The cash allocation to local organizations fell by 20.2% compared with 2020, while the proportion of assistance funding to these groups declined by between 2 and 3 percentage points. This dip is due in large part to a $295.5 million decrease in allocation to South Africa, which in 2020 received 42 cents from every dollar of local funding. Where did the rest go? For this analysis, “local” refers only to assistance funding for organizations implementing projects in their own countries. In 2021, a further $95.9 million went to 29 LMIC-based organizations for activities in other countries. This is 39.7% more than the previous year. A significant portion of this, worth $45 million — or 46.9% — went to local offices of the United Nations Development Programme. In contrast, $6.4 billion went to non-U.S. organizations based in other high-income countries. This is up 61.9% from the previous year. A big portion of this went to multilateral agencies such as Gavi, the Vaccine Alliance; the Global Fund to Fight AIDS, Tuberculosis and Malaria; and United Nations agencies such as the World Health Organization and the Food and Agriculture Organization. Gavi alone received $4 billion for COVAX, a global initiative for COVID-19 vaccines. The remainder, worth $9.5 billion, went to U.S.-based organizations to deliver projects in LMICs. Zooming into localization Africa and the Middle East remain USAID’s central hub for locally implemented activities, with $607.2 million, or 72.3% of the total funding to local organizations in LMICs. Of this, $343.4 million went to local organizations in southern Africa. Asia also received significant funding, with $115 million allocated to local organizations in the region. Local organizations in Latin America and the Caribbean also received a sizable allocation, at $91.4 million, while local awardees in eastern Europe got the least, with $26.5 million. South Africa remained the country with the most locally implemented award funding, albeit much less than in the past. A total of $142.4 million was obligated for 104 activities — amounting to 17% of the total 2021 allocation to local organizations. This is 67.5% less than in the previous year. Kenya ranked second, with $87.3 million — 37.2% more than in 2020. Next was Tanzania, with $58.1 million — 21.2% more than in the previous year. Overall, changes in funding from 2020 to 2021 varied across countries — with some receiving more, while others saw considerable reductions. Ethiopia saw a huge dip in funding to local organizations, from $43.2 million to $8.8 million. There are 33 other countries that recorded similar trends, including Nigeria, Lebanon, Egypt, Jordan, and Ukraine. On the other hand, 44 countries saw an increase in funding to local organizations. India had the biggest leap, from $23.9 million to $50.4 million. Other countries with large boosts included Kenya, going from $63.6 million to $87.3 million; Uganda, from $9.6 million to $30.5 million; and Mozambique, from $21.6 million to $42.2 million. Who are the top local partners? Three of the top 10 local organizations are based in South Africa: Right to Care, Anova Health Institute, and BroadReach Healthcare. Between 2020 and 2021, Right to Care overtook Anova as the top local organization in LMICs, while BroadReach went from third to seventh place. Together, these three organizations received $82.2 million, or 57.7% of the amount obligated to South Africa. On the other hand, Deloitte Tanzania went from sixth place in 2020 to fourth in 2021. Six new organizations made it onto the list of top awardees in 2021: IPE Global Limited, Project Hope Namibia, Baylor College of Medicine Children's Foundation Malawi, N’weti, Uganda Protestant Medical Bureau, and Baylor College of Medicine Children's Foundation Lesotho. The top awardees will also implement USAID’s biggest local activities. These include: • $28.6 million to Right to Care for the Antiretroviral Therapy Optimization program in South Africa. This project aims to accelerate better access to HIV treatment. • $28.3 million to IPE Global Limited to support affordable health care in India. • $26.8 million to Anova Health Institute to accelerate HIV response in multiple provinces in South Africa. • $25.6 million to Deloitte Tanzania to support comprehensive health services delivery in Tanzania. • $15.7 million to BroadReach Healthcare for the implementation of health care and treatment activities in South Africa. Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content.