Is USAID making progress on localization?

It has been 18 months since Samantha Power, the head of USAID, announced that a cornerstone of her agenda would be shifting more of the agency’s funding to local organizations and putting people affected by development programs in a position to shape and lead them. The agency’s task is a big one, and it goes beyond moving buckets of funding from one group of partners to another. “The question we should really be asking is — is USAID really designed for localization?” said Ngasuma Kanyeka, co-founder of Taji Finance and a former chief of party on USAID programs, during a Devex Pro Live event on Tuesday on how far the agency has come on its “localization” goals. Power’s twin targets for localization are to channel a quarter of USAID’s funding to local organizations and to put local people in the lead of designing half of its programs by 2025. While we are still waiting for a promised progress report against those targets, it is clear that the agency still has work to do to realize Power’s vision and to bring about systemic changes in how it operates. In congressional testimony, Power shared that funding from the U.S. Agency for International Development to local organizations increased from 7.4% in fiscal year 2021 to 10.2% in fiscal year 2022. That represents a 38% year-over-year increase in the percentage of funding going to local organizations — and what a USAID spokesperson told Devex reflects “a strong trajectory” — but a less than 3% increase in the actual amount of funding. “The needle is not really moving,” Charles Pope, a former USAID contracting officer turned consultant, said at the Devex event. While USAID’s targets relate to its own funding and programs, they are also market signals that reverberate through the community of organizations that work with — and want to work with – the agency. “We’re not successful when we meet that 25% target if all of the things that need to change about donors, about INGOs and other implementers don’t change,” said Shanna Marzilli, CEO of Plan International USA. There are many operational aspects of those changes that are challenging organizations in different ways. A key step is to recognize that there is already plenty of talent and “capacity” in the places where USAID works, and if international organizations are struggling to find local partners to take over programs, they should be asking themselves what they are doing wrong. “If you have a private sector that’s actually finding talent and growing businesses in these emerging economies, what stops USAID from doing the same?” Kanyeka asked.