Funding mechanisms in Southern Sudan: NGO perspectives
by Wendy Fenton and Melissa Phillips May 2009

During 2007 and 2008, donors commissioned reviews of a number of the key aid instruments in use in Southern Sudan. The main impetus for these reviews was a growing perception that, three years into the Comprehensive Peace Agreement (CPA), the current mix of funding mechanisms was not delivering results on the ground quickly enough. This article draws on a review conducted in early 2008 to examine issues around fund design, access and effectiveness from the perspective of NGOs supporting service delivery in Southern Sudan.

The MDTF: raised expectations, disappointing results

By far the largest funding mechanism in Southern Sudan is the Multi Donor Trust Fund (MDTF), administered by the World Bank. In all, 14 donors have pledged $650 million to the fund. Mandated by the CPA, the MDTF allocates funds against priority national programmes, implementation of which is contracted out to the government and UN actors, the private sector and NGOs. Monies provided are matched by government contributions.

The MDTF was originally expected to enable the rapid expansion of basic services. Instead, however, it took a longer-term view of development planning. As a result, building central government structures and capacity has been prioritised over the delivery of results. Three years after it was established, the MDTF has delivered few tangible benefits in Southern Sudan. The World Bank, as administrator of the fund, has been criticised for creating and then failing to manage high expectations that the MDTF would quickly deliver ‘peace dividends’. Donors have not acted strategically and proactively in pressing for progress, or in supporting the establishment of effective delivery mechanisms.

Most of the successes highlighted in reviews of the various funding mechanisms being used in Sudan are related to whether the instrument has met donor objectives, rather than whether results have been achieved on the ground. For example, the MDTF is credited with enhancing donor coherence and coordination, reducing transaction costs for donors and the GoSS, building GoSS capacity at central level and encouraging GoSS ‘ownership’ of national development programmes. At the same time, however, the reviewers who reached this conclusion also add that, despite a ‘significant increase in activity during the second year of operation, including an increase in disbursement and contracting … most of the projects have not yet delivered tangible goods to the public’.

A review of the MDTF conducted in late 2007 noted that the World Bank had taken action to address some of the problems, hiring more staff and simplifying procedures. Decision-making authority has been devolved to the field and efforts have been made to move programmes forward. The World Bank and donors have also sought to manage expectations better by redefining and clarifying the fund’s objectives. What has still not been addressed, however, is the failure to involve NGOs and civil society sufficiently in the design, implementation and monitoring of MDTF programmes. Instead, NGOs are still seen largely as ‘implementing partners’ – fast becoming a euphemism for ‘contractors’ or ‘sub-contractors’.

UN management of pooled funding: efficient and cost-effective for whom?

The UN is responsible for a range of funding mechanisms in Southern Sudan, including the Common Humanitarian Fund (CHF), a pooled fund worth around $150m a year, and the Sudan Recovery Fund (SRF), both administered by UNDP.

Many donors see pooled funding and the centralised management of pooled funds by the UN as a way of reducing the administrative burden associated with managing individual NGO grants, increasing coordination and making it easier to share lessons. Donors also regard pooled funding as a means of meeting their commitments to the Paris Declaration on Aid Effectiveness, the OECD principles for engagement in fragile states, the Good Humanitarian Donorship initiative and UN reforms using one mechanism. For NGOs, however, working through the UN bureaucracy can reduce efficiency and increase operating costs. Accessing funding through the UN can be a slow and cumbersome process. UN management costs mean that less money is available to cover NGO overheads, while the short timeframe of some UN-managed funds – such as the CHF – is also problematic.

A recent review of the $54m, three-year Strategic Partnership Agreement (SPA), managed by UNDP and funded by the UK, the Netherlands and Denmark, notes that the main objectives of the funding were not to deliver basic services for Southern Sudanese but to ‘Strengthen and assist UNDP to become more strategic, coordinated and programmatic through enhancing its alignment to national strategies, sharpening its focus, providing a more predictable flow of resources, and improving the quality of delivery; and to enhance the effectiveness of UNDP’. Under the SPA, UNDP worked with two NGO partners on a Local Governance Framework Project. Although the two NGOs initiated the project, wrote the proposal documents and carried out the groundwork, once the project was established the NGOs were excluded from high-level meetings with the GoSS, despite having long-standing ties and good relations with the Local Governance Board and other government actors.

In addition to reviewing systems and procedures, UNDP has responded to its critics by trying to engage much more constructively with NGOs. While this is encouraging, NGOs believe that UNDP will need to do much more to establish a ‘culture of partnership’ within which more constructive relationships can be built.

Targeted, bilateral funds have delivered results …

In contrast to these pooled mechanisms, bridging and recovery funds such as DFID’s Basic Services Fund (BSF) and the European Union (EU)’s Recovery and Rehabilitation Programme (RRP), a three-year, €50m livelihoods initiative administered by UNDP, have made important contributions to supporting service delivery through NGOs. Acting on the recommendations of NGOs and others, DFID decided in late 2008 to strengthen and expand the BSF into a new multi-donor fund with greater GoSS involvement. In Phase II (January 2009–June 2010), the governments of the UK, Norway, Canada and the Netherlands are providing a total of £28m, with a greater focus on building local government capacity. The EU is also considering doubling its allocation to the RRP by providing an additional €50m, extending its timeframe and programmatic scope, inviting contributions from other donors and making UNDP compete for the management tender.

… and the UN is learning from them

Approved in 2008, the Sudan Recovery Fund (SRF) is a UNDP-managed pooled fund intended to fill the ‘recovery gap’ between short-term humanitarian assistance and long-term development funding. At the time of writing, the SRF had made one grant of $20m. Encouragingly, the entire first tranche of SRF funding was allocated to NGOs and, despite initial concerns about administration and management arrangements, NGO expectations are high that the fund will support the rapid expansion of basic services, while simultaneously developing the capacity of local government and civil society to manage these services. The UN succeeded in getting the fund up and running, as planned, in time for the 2008/2009 dry season. To expedite the establishment of the Fund, the UN designed the necessary procedures and forms and began to identify potential staff even before receiving the official go-ahead.

The UN also appears to have given careful consideration to the lessons learned from e toexperiences with the MDTF and the CHF and other UNDP-managed funds. There is evidence that feedback from reviews has been incorporated whenever possible in the development of the SRF proposal. These are all welcome developments given the largely negative experience NGOs have had in working with UNDP in Southern Sudan. NGOs also asked that the criteria for judging UNDP’s fund management performance should include how relationships with partners are handled.

NGOs: room for improvement

NGOs and other civil society actors see a wider range of roles for themselves within Southern Sudan’s pooled funds, including acting as change agents, advocates, programme implementers and testers of new and innovative approaches. On the ground, NGOs usually have long-term relations with communities and local authorities, making them valuable partners in building capacity and facilitating the transfer of responsibility for service delivery to the government. Many carry out research and analysis which could contribute to constructive changes in policy and practice. Others have considerable experience of working within consortia and of managing umbrella grants and sub-contracts.

That said, NGOs themselves bear some responsibility for the lack of strategic engagement with key funding mechanisms. Three years into the CPA, a number of key NGOs have only just finished relocating their offices and decision-makers to Juba from Nairobi. NGOs have found it difficult to adapt to donor agendas and corresponding changes to the funding environment more broadly. A lack of knowledge, confidence and collective capacity has hindered NGOs from engaging strategically, though these problems have been addressed to some extent through NGO membership of the MDTF Over-sight Committee and the BSF and SRF Steering Committees.

To foster more strategic NGO engagement with the GoSS, donors, the UN and other key interlocutors have funded the establishment of a dedicated Secretariat to support the NGO Forum, the largest coordination and information-sharing body for international and national NGOs in Southern Sudan. The Secretariat should be able to learn from and build on progress made by the NGO Health Forum. Health NGOs, which reportedly provide 86% of available health services in Southern Sudan and pay the salaries of three-quarters of health staff, enjoy a large degree of leverage with the GoSS, donors, the UN and the World Bank. Strong and consistent leadership by NGO Forum representatives, coupled with the support provided to the GoSS Ministry of Health, have strengthened relationships between the actors concerned.

Another of the Secretariat’s priorities is to promote the involvement of Southern Sudanese NGOs and civil society in all aspects of recovery and development in Southern Sudan, starting with the management and activities of the NGO Forum itself. Most local NGOs and CBOs have not been able to engage directly and substantively with either the MDTF or the CHF. In 2008, only five national NGOs received CHF funding, up from two the previous year. Although donors have sponsored several workshops and training sessions, there is as yet no coherent strategy to encourage local involvement. Promoting the development of such a strategy will be a priority activity for the newly established Secretariat; successfully decentralising the NGO Forum to States and counties will be key in this.

Conclusion

When peace came to Southern Sudan, the expectation was that additional amounts of multi-year funding through the MDTF and other sources would enable NGOs and other actors to continue to support the emerging government to establish basic services infrastructure and systems, while simultaneously expanding and improving the quality of services. However, start-up, structural, staffing and management issues associated with the MDTF and most of the UNDP-managed funds hindered effective NGO engagement and delayed progress on the ground. Although some donors continued to fund a few NGO service delivery programmes bilaterally, when the MDTF did not come through many NGOs were forced to continue to use short-term humanitarian funding, primarily from USAID, ECHO and the CHF, in an effort to bridge this gap. Despite the short-term nature of these funds, they have played a crucial role in delivering services, particularly health and water and sanitation.

Those instruments that appear to be working well in supporting recovery needs are either bilateral funds implemented through NGOs, such as DFID’s Basic Services Fund and the EU’s RRP, or fast and flexible pooled funds, like the Capacity Building Trust Fund, managed by UNICEF and accountancy firm KPMG. The CBTF, established prior to the CPA in 2004, has been used to fill gaps not addressed through other mechanisms, including covering stipends and equipment costs for the new government in 2005 and, later, managing and disbursing donor and GoSS funds on behalf of the MDTF. NGO experience of UNDP-managed pooled funds has been mixed at best, and extremely negative at worst. The ability of NGOs to engage with the UN and donors effectively around these issues has been limited, though the NGO Secretariat, if used effectively, should be able to address this weakness. The failure of all actors to recognise existing strengths, build additional capacities and actively encourage and support the participation of Southern Sudanese NGOs and civil society through aid instruments and real partnerships is an urgent issue, and one which must be addressed.

Southern Sudan needs flexible approaches and aid instruments, accessible to key actors such as NGOs, which together meet both immediate service delivery needs and longer-term state-building objectives. Ensuring that funding mechanisms deliver results on the ground as effectively and efficiently as possible should be both the priority objective and shared responsibility of all actors concerned. Better coordination between funding mechanisms will provide opportunities to identify synergies and avoid overlap and duplication. Fast, flexible, and predictable multi-year funding will enable NGOs and other actors to support the GoSS in expanding the delivery of good-quality basic services – the foundations on which peace and development can be built.

 

Wendy Fenton is the HPN Coordinator. Formerly, she was an independent consultant to the Juba NGO Forum. Her email address in w.fenton@odi.org.uk. Melissa Phillips is the NGO Secretariat Coordinator for the Juba NGO Forum. Her email address is jubangoforum@gmail.com.

 

References and further reading

G. Boyd, K. Orlander, H. Pearce and K. Adiebo, UNDP Strategic Partnership Fund 2005–2007: End of Strategic Partnership Review, report commissioned by the governments of the UK, the Netherlands and Denmark, draft, 2007.

W. Fenton, Funding Mechanisms in Southern Sudan: NGO Perspectives, Juba NGO Forum, February 2008.

P. Murphy, Basic Service Delivery During the Transition from Relief to Development: Managing the Middle Ground in South Sudan’s Recovery from War. Phase 1: Overview of the Aid Architecture Supporting Basic Services, report commissioned by DFID Sudan and the Joint Donor Team, October 2007.

S. Pantuliano, M. Buchanan-Smith and P. Murphy, The Long Road Home: Opportunities and Obstacles to the Reintegration of IDPs and Refugees Returning to Southern Sudan and the Three Areas: Report Phase I, a report to DFID by the Humanitarian Policy Group, August 2007.

Review of Sudan Multi Donor Trust Funds, Phase I, Scanteam, November 2007.

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