How familiar are you with the term “in-kind donations”?
According to Romano Prodi — former United Nations special envoy to the Sahel and author of the U.N. integrated strategy for the African region — the mechanism is set to revolutionize the way countries engage with multilateral organizations and help bring previously reticent actors such as China into the fold.
In an exclusive conversation in Rome, the former Italian prime minister and European Commission president asserted that in-kind donations could make investing in the Sahel more attractive for donors, allowing them more flexibility and “ownership” throughout the project implementation process.
Prodi explained the “important innovation” of his strategy lies not only in its key development objectives, but also in the way it aims to overcome a dual reluctance among donors to invest in the African region and channel resources into U.N.-implemented programs. The strategy will remedy this, he said, by putting in place an agile implementation mechanism that avoids unnecessary financial red tape and bureaucracy.
So how does it work?
“Donors can fund [the programs] traditionally, with cash, or ‘in-kind’ by carrying out the implementation directly. If China wants to implement a program on solar energy or road infrastructure, or if Germany wants to build a hospital they will be able to do it and put their ‘flag’ on it,” Prodi said.
Funding in-kind means that donors can choose among the priority projects defined by a ministerial coordination platform and a soon to be set up technical secretariat, with the result that they become directly accountable to their own citizens and taxpayers for what they do and the time they spend doing it.
Prodi explained the rationale: “The objections I had from many donors, especially from the biggest ones have been ‘if we intervene in this emergency, our funds will be largely spent on expenses — administration, bureaucracy, management — and our people need to know exactly where the [money] goes.’”
Such a mechanism, he added, would allow for direct investment in the Sahel, with implementation undertaken by individual countries, but remaining “under the supervision and according to the priorities of the U.N. and [the Sahel countries].”
If successful, his strategy could rewrite the rules of development cooperation, attracting new donors and marking a change of pace in how the development community thinks about multilateralism. Indeed, making the managing architecture more agile is closer — and more familiar to — the rapid-deployment approach to implementation taken by the Chinese.
So was this approach taken with a nod towards Beijing?
“Yes, I’ve tried to learn lessons … [Donors] say that bureaucracy costs too much, that it is too slow, that it takes years to do things. But now, they can [opt out] of these general expenses and can implement projects as fast as they like.”
A ‘good compromise’
Prodi explained that the strategy is a “good compromise” to attract significant Chinese investment in the region.
“China is disposed to be engaged in multilateral initiatives. It seemed to me to be a good negotiation [tactic] to say to China, commit yourself with multilateral funding, but you can put your flag on what you do to show that you are in Africa not just for business reasons, or to strengthen bilateral relations — but out of a sense of global solidarity.”
The next step is to implement the scheme in practice.
A senior source at the U.N. confirmed to Devex that it’s a “hectic time” at the United Nations Office for West Africa in Dakar, with the Sahel strategy unveiled last year now entering into an implementation phase that will run until 2016.
With Prodi’s special envoy mandate coming to an end in February, his team has relocated from Rome to Dakar to work under UNOWA chief Said Djinnit, who has already taken up the reins on consultations with actors on the ground — including meetings with the presidents of Mali and Niger in recent weeks.
Similar meetings are planned in Nouakchott at an upcoming ministerial gathering including delegations from the five Sahel countries — Niger, Mauritania, Chad, Burkina Faso and Mali — that are expected to endorse concrete priority programs and projects.
The challenge of coordination
The “how” of Prodi’s strategy is now firmly on the international community’s agenda, with Prodi’s former staff members — now under the direction of UNOWA — busy finalizing the nuts and bolts of a dedicated technical secretariat that will work with the ministerial coordination platform to manage the programs and projects.
Meanwhile, the African Development Bank is thrashing out the details and inner-workings of a new financing mechanism: the Sahel Action Fund. This fund — to be hosted by the AfDB — is being designed to speed up the funding process, manage bilateral and multilateral donor funds, but also track and encourage in-kind contributions.
According to the senior U.N. source, the AfDB is working through the “technicalities and rules,” but is “optimistic on country pledges” and expects the fund will focus its work on “innovative” projects in sectors such as agriculture, solar energy and water supply.
Notwithstanding the input of AfDB and UNOWA technical expertise, Sahel governments will take the lead on turning the theory of Prodi’s strategy into practice through the coordination platform, whose next meeting will be held in April in Bamako.
This platform of ministers will be presided over by a rotating two-year presidency drawn from the five Sahel states — the first being Mali — to be supported in its work by a newly-founded technical secretariat jointly headed by the U.N. and the African Union, but hosted by the U.N office in Dakar.
Prodi said is one of the more innovative parts of his strategy: “It coordinates the development plans of some central Sahel countries for the first time … and it establishes ministerial coordination to harmonize development [within the region] … given that some of those countries have porous boundaries, integration is essential.”
But the challenge of aligning existing national, regional and international initiative and managing new ones without giving rise to a cumbersome administrative structure is not without its problems. An obligatory added layer of input and oversight comes in the form of UNOWA’s interaction with a regional humanitarian coordinator, who is currently in the process of implementing the emergency response plan — aiming to ensure coherence among relief and development actions — launched in Rome in early February.
Although the senior U.N. source confirmed that events are moving “very quickly” and that staff in Dakar are “in a process of consultation and discussion,” at the time of writing there is still uncertainty surrounding the exact remit and terms of reference for the work of the platform and supporting secretariat.
In the same vein, although it is known that the Senegalese capital will be the entry point for NGOs, development organizations and private sector actors to receive up-to-date information about the implementation process and its associated opportunities, the issue of who will select implementing partners remains opaque for the time being.
The senior U.N. source revealed that the task of choosing implementing partners will most likely be jointly decided by the Sahel countries through the coordination platform — but Prodi reiterated the option for donors to select their implementing partners directly in the case of in-kind donations.
According to the senior U.N. source, both matters will be resolved in the “coming weeks,” but asserted that the platform’s more immediate concern will be to endorse the priority programs and projects and review some of the U.N. programs already in place and align them with the Sahel strategy’s three pillars — namely governance, security and resilience. Under these pillars, programs and projects will be organized around five key areas of intervention — agriculture, water, infrastructure, solar energy, health and education.
Could the strategy eventually become a model for other African regions?
“It’s a test,” said Prodi, “and a big change … It won’t be quick or easy to put into place, but it needs to be successful.”
Indeed, only the test of time will tell us whether the strategy is considered a success. But if the former U.N. special envoy’s plans come to fruition and in-kind donations bring into play the financial clout of countries such as China, then the legacy of his Sahel strategy might be more far-reaching that first thought: to change forever the way that the development community looks at multilateralism.
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