Why is localization surging in some countries and stalling in others?

Last year, the U.S. Agency for International Development’s mission in Kenya channeled over half its funding to local organizations. There was the Maasai Mara Wildlife Conservancies Association, which helps local communities protect their land and generate income; Act Change Transform, which is integrating youth and women inside Kenya’s democratic processes; and St. John’s Community Center, which connects vulnerable children to health and social services. Seven other USAID missions did the same, sending at least 50% of their funds to local organizations in Brazil, Paraguay, Botswana, and beyond. That type of funding is critical to USAID, which has set itself a target of channeling 25% of its eligible dollars to a local level by 2025. But during the same year, USAID missions in 17 other nations funded no local groups at all. “What you would want to see is more missions and more bureaus taking on localization, but instead, what you have is this mixed picture,” said Justin Fugle, the head of U.S. government policy at Plan International, an international nongovernmental organization. “Some went up, some went down. And that’s not the kind of trendline we’re hoping to see.” <div class="flourish-embed flourish-map" data-src="visualisation/18908728"><script src="https://public.flourish.studio/resources/embed.js"></script><noscript><img src="https://public.flourish.studio/visualisation/18908728/thumbnail" width="100%" alt="map visualization" /></noscript></div> In many cases, there are clear explanations for why certain missions may channel more funding to local groups. A stronger civil society ecosystem, for example, or decades of USAID engagement. A country might also have a higher proportion of health programming, a thematic area that for years, has prioritized working with local organizations. And, a mission’s programming may center on development over humanitarian response, a sector which, historically, has funneled just a sliver of money toward local groups. But there are other nations — such as Ghana — that buck those trends. Ghana has a vibrant network of civil society groups and a 70-year history with USAID. Despite that, just 2.1% of dollars flowing through its USAID mission went toward local organizations last year. Experts point to one remaining factor that may be tipping the scales: USAID missions, and the staff members, resources, and commitments they have to see localization through. “Individual personnel, particularly at the leadership level, can have a great impact,” said Marin Belhoussein, a senior policy adviser for aid and development finance at Oxfam America. “A lot depends on who those staff are and what they’re interested in doing.” Power in numbers It’s something that the U.S. Government Accountability Office, which audits federal agencies, noted in a recent report on USAID’s Centroamérica Local project, an initiative that aimed to empower local organizations in El Salvador, Guatemala, and Honduras. To complete the $300 million project, all three USAID offices asked for between 14 and 22 additional staff members — and reported that such staffing increases were necessary to comply with localization efforts. Funding delays, congressional blocks, and space limitations within the missions had hindered much of that hiring from actually happening, the report stated, and as of June 2023, between 16% and 37% of authorized foreign service national positions — local hires from the country where the mission is based — were still vacant. “USAID officials told us that the missions have sufficient staff to oversee current activities but will need to continue hiring additional staff, including FSNs, to ensure adequate oversight of the increasing number of smaller awards,” the GAO report read. “Addressing other barriers to hiring staff to oversee [the Centroamérica Local project] and other localization efforts is essential.” On top of that, many USAID staff members told Devex that it’s not just about a mission’s size. It’s about the mission’s history in that country, and the commitment to localization within each team. USAID Kenya, for example, has both — and as a result, the mission channeled just over half of all its funding toward local organizations last year. “Our localization efforts started years and years ago,” a spokesperson from the USAID Kenya mission told Devex. “Recognizing that localization efforts take time, and recognizing that this mission has had some really long-term relationships and commitments where we were able to see the value of partnering directly with local actors, has really positioned us well.” USAID’s conservation work in Kenya is one example, the team explained. With 65% of the country’s wildlife living outside of Kenya’s national parks, the mission needed community buy-in to really make an impact. Since the 1980s, USAID has been working to build what they call “community wildlife conservancies,” slices of land that local groups would manage, protect, and preserve for both tourism and livestock ranching. Four decades later, those conservancies now cover 17% of Kenya’s landmass, the mission staff said — more than double the area of Kenya’s national parks. “We’re a bit of a snapshot into the future for a lot of missions that are starting on this journey,” Meital Tzobotaro, the senior learning adviser at USAID Kenya, told Devex. On top of that, USAID has an enormous presence in the country, obligating more than $644 million in 2023 alone, according to U.S. government data. Kenya has also been a recipient of the U.S. government in other ways: For more than two decades, more than $8 billion has been routed to the country through the President’s Emergency Plan for AIDS Relief, or PEPFAR, a health program that emphasizes working with local groups. And, the mission leans heavily on its local staff members. The two areas where localization figures are highest — democracy and conservation — are run by employees from Kenya, the mission told Devex. Still, Tzobotaro and her colleagues are the first to admit: the East African country is unique. Kenya is a stable country brimming with strong civil society organizations — and this year, the country’s civil society capacity scored 0.9 on a scale of 0-1, according to USAID’s own country road map calculations. “We’re based in a country that has a lot of capabilities,” said Tzobotaro. “There is a vibrant civil society. We have a lot of organizations that are really capable. And we see that over and over again with our portfolio that goes to local partners.” Where there’s a will, there’s a way Across the continent, USAID Morocco saw its local funding more than double from 16% in 2022 to nearly 39% in 2023. For the USAID Morocco team, the reason for that is because of the mission’s intentions — and how localization became baked into their day-to-day operations. “We had to open ourselves up, as an agency and as a mission, to figure out the best ways to hear from more and more organizations and more voices to be able to really see the big needle change,” said Juan Carlos Rodriguez, the office director of USAID Morocco. “The question is how we prioritize, and how to find the time to prioritize network-building when it’s not just within the scope of designing or building a specific project. When we don’t find the time for that, we’re missing opportunities to partner with the right kind of organizations.” A large part of that, he explained, was about listening — something that Omar Aassou, the head of the Tamdoult Youth Association, said his entire team had noticed. It took two years for the organization to win a USAID award, from applying for the grant itself to undergoing pre-award audits and strengthening internal mechanisms to match what USAID expected. The entire process, Aassou explained, was a kind of partnership: The agency worked with the association to both spot and address weaknesses, ensuring the organization was actually ready to receive the award they were eventually granted. “It was a learning process, but it was totally worth it,” Aassou told Devex. “We worked on ourselves as an organization, we tried to develop our procedures, our regulations, our practices. Now, I can say that Tamdoult is one of the role models when we speak about local NGOs in Morocco.” A sectoral advantage Elsewhere in the world, localization is playing out across USAID missions in a very different way. Last year, USAID South Sudan channeled just 5% of its funding to local groups. In the Democratic Republic of Congo, the percentage dropped to 3.2%. And in Yemen, local funding has remained — year over year — at zero. In all three countries, continuous conflict has shaped the type of assistance donors provide. South Sudan, for example, has received nearly $5.6 billion in USAID’s emergency humanitarian assistance since the country’s civil war began in December 2013, compared to $1.8 billion in development assistance since South Sudanese independence in 2011, according to USAID South Sudan’s latest strategic framework document. “Where localization on the development side goes back 10 years or so, localization on the humanitarian side inside USAID is only beginning now,” said Plan’s Fugle. He pointed to the fact that USAID’s Bureau of Humanitarian Assistance has yet to release its localization strategy, which is expected at some point this year. But in 2023, local groups received less than 2% of the agency’s humanitarian funding flow. “You’re talking about a gap of 10 years of work on the development side to move localization forward,” he said, “while BHA is just starting on that road.” USAID is not alone. Local and national organizations received just 1.2% of overall humanitarian assistance from all funders in 2022, according to an analysis from Development Initiatives — a number that accounted for just $98 million out of a $39.2 billion total. That’s despite the fact that nearly a decade ago, more than 60 donors signed onto the Grand Bargain, an agreement that aimed to push more funding to local and national humanitarian responders. “Oxfam’s position is that those closest to the quote-unquote problem, or the issue at hand, are best positioned to design and lead the response. And that includes humanitarian response,” said Belhoussein. “The U.S. is a signatory to the Grand Bargain, and there’s no reason why the percentage of humanitarian funding should be so low.” But others said there were good reasons why local humanitarian funding has been so low. Mark Wentling, a former USAID mission director, said he’d seen past efforts to localize funding end in fraud and embezzlement at the hands of local groups, especially in conflict-ridden contexts. “Niger and Burkina Faso have rogue military governments which makes it tougher to identify and vet local organizations by the small missions we have in those two countries,” Wentling told Devex over email, speaking to two operating units that respectively channeled 0% and 0.4% of their funds to local groups last year. For many missions, a focus on development programming — especially health — has helped localization numbers rise. From 2020 to today, the health sector has had the highest proportion of local funding, and last year, two-thirds of the agency’s direct local dollars went toward health programming. According to USAID’s localization progress report, that success is due to PEPFAR. Since 2018, the U.S. government has been pushing PEPFAR funders to prioritize local organizations, aiming to have 70% of PEPFAR funds dedicated to local groups by 2020. Though that goal wasn’t quite accomplished, by 2023, that percentage had climbed to 59% — and during the same year, USAID’s HIV program made up more than half of all the agency’s obligations to local organizations. “What you seem to have is this concentration of success in localization in the former PEPFAR countries, because PEPFAR made them do it,” Fugle said. “These are nearly all in Africa.” Over the last three years, 19 USAID operating units saw at least a 10% jump in their direct local funding to local organizations. The vast majority of those nations — 14 out of 19 — were touched by either a regional or country-level PEPFAR program. Reading the data tea leaves While some countries — like Kenya — follow consistent trends, the localization figures of many others have left experts in the dark. “Just take a look at Mexico: 30% in 2021 to 3.2% in 2023,” said Gordon Whitman, the managing director for international organizing at Faith in Action, a network of faith-based civil society organizations. “It makes me skeptical that this is how USAID is really measuring whether they are following the lead of local actors and listening to their priorities, especially if the numbers can fluctuate so significantly.” Some of that can be explained by small number sensitivity: Many countries receive just a handful of grants from their USAID missions, so one program beginning or ending, or the addition of just a few local organizations, can massively skew the numbers. In Morocco, for example, boosting local partners from four to six organizations led to a 22% funding increase from 2022 to 2023, according to a USAID spokesperson. The same issue may explain why Brazil and Paraguay have more than 50% local funding. “Brazil and Paraguay are tiny countries in terms of USAID investment, so it helps me understand a little bit more,” said Project HOPE’s director of policy and advocacy, Jed Meline, pointing to the two USAID operating units with the highest portion of local funding. “That number hides what I’m guessing is a single grant, or two at most.” Small number sensitivity may explain why the data doesn’t tell a straightforward story. Thirty-one of the 93 countries USAID operates in saw the local funding flowing through their respective USAID units backtrack from 2021 to 2023, with one country — Mongolia — seeing a dive of more than 50%. Eleven countries saw no movement at all, while 19 saw localization rates hit double digits. But that can’t explain all the variation. Ghana is one of many countries that have experts scratching their heads. USAID has been in the lower-middle income since 1957, and today, there is a full mission working within its borders. Ghana is relatively stable, and has been touched by PEPFAR through the program’s West Africa regional footprint. Yet last year, just 2.1% of USAID Ghana’s funds went local. “Why is Ghana so low? It’s difficult to say,” said Samuel Zan Akologo, the national coordinator of the FAITH in Ghana Alliance, a network of faith-based local organizations, when asked why he thought his home country recorded just 2.1% in local funding last year. “There is now an explicit intention to channel funds to local organizations, but what remains is the operationalization.” How reliable are the numbers? There’s one final issue. USAID’s spending target isn’t based on its total budget. Its target is only to spend 25% of “eligible” funds — money which local organizations might reasonably be expected to compete for. And it’s not clear exactly how that changes the picture. Last year, USAID missions spent $8.2 billion while Washington spent $29.9 billion, according to a 2023 report. But most of the latter was cut out of what USAID calls the denominator — the proportion of its total spending deemed “eligible” for localization in USAID’s country-by-country calculations, and the only national comparisons in the report focus on the dollars flowing through missions. For example, the country with the highest proportion of local funding, according to USAID’s localization progress report, was Brazil. When looking at the money flowing through USAID’s operating unit in the South American country, the agency reported 91.1% of all funds were directed toward local groups, for a total of just over $3 million last year. When zooming out of just that Brazilian operating unit, and analyzing the total USAID dollars to hit Brazil last year, the amount of funding rises to $4.3 million, but the portion of local funding sinks to 18.4%. “Until USAID provides an explanation of precisely what and how much is included, and excluded from its denominator, and why, it's impossible to know what proportion of their funding is truly reaching local organisations,” Gary Forster, the head of a nonprofit organization Publish What You Fund, told Devex over email. Update, Aug. 27, 2024: This article has been updated to swap out Syria for Yemen as a country with three years of 0% local funding. Though multiple local Syrian organizations received USAID money, they were registered in Turkey for security reasons, making local funding to Syria seem lower than it actually is.