Mapping financial flows in developing countries is always a challenge, and even more so when the data available is lacking.
In some cases, donors and aid implementers have to decide whether or not to pursue projects based on poverty data from as far back as 1998, according to Harpinder Collacott, Director of Engagement and Impact at Development Initiatives.
“The data upon which poverty numbers are based is incredibly poor and out of date,” she said during an interview with Devex at the Clinton Global Initiative in New York. “This is obviously not sufficient and we need to improve.”
Not only governments but also the aid community thus “base some very important decisions on very weak numbers,” lamented Collacott.
An example of a country with outdated statistics is Ethiopia, one of Africa’s fastest-growing economies and considered a trailblazer on the Millennium Development Goals but still hugely reliant on foreign aid.
But as the economy continues to grow, Collacott noted that’s when donors need to change their role and decide where to put their money next: “As the resource mix starts to change, they need to think about how they can put aid into another country where it can harness growth.”