July 7, 2022 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chairs Lester Munson, Larry Nowels and Tessie San Martin.
MFAN congratulates House Appropriators for the strong message to the U.S. Agency for International Development (USAID) contained in the report accompanying the Committee’s fiscal year 2023 funding bill, calling for clear definitions, tracking, and progress on the agency’s locally led development agenda. Locally led development is a long overdue solution that has now become a hallmark of modern foreign assistance. Development leaders have espoused it, local partners are demanding it, and MFAN has advocated for it as a core pillar of our agenda for over a decade.
Last November, MFAN applauded the announcement by Administrator Samantha Power, head of USAID, committing the Agency to a bold agenda to advance locally led development (LLD). In that speech, Administrator Power offered ambitious targets, pledging 25% of USAID funding to go directly to local actors in the next four years, up from 6% today, and 50% of programming to put local actors in the lead over ten years.
We share support for this agenda with in-country local grassroots organizations, local and international nonprofits, and contractors alike, all of whom say that this is the right direction. Over 1,200 local actors signed a letter to the Administrator supporting these pledges – particularly the 25% funding target, which is critical to building their program and organizational infrastructure.
The political winds are blowing in the same direction on Capitol Hill. For the past several months, momentum has been building to take a fresh look at the reforms needed to enable USAID to localize. These include flexible funding options and the expansion of the number of contracting officers and project time-horizons, which enable USAID Missions to better co-design and implement with country-based entities. The House Foreign Affairs Subcommittee on International Development has held two hearings and continues to hold USAID accountable for these positive changes. Last week, Hill supporters went a step further. The House Appropriations Committee approved the FY23 State and Foreign Operations bill, which provides clear direction to USAID regarding its LLD work and requests the Agency to report on how it tracks funding to local entities, progress made on its LLD targets, and how it plans to reach targets in subsequent years.
At this moment of rare political consensus, MFAN looks to the Agency to share its roadmap to achieve the locally led outcomes it seeks. Clear definitions of “local”, as well as clear metrics and transparent reporting against their targets are critical aspects of effective development policy and a bedrock of MFAN’s advocacy efforts more broadly. Particularly when it comes to the 25% and 50% funding metrics, three issues must be clarified in the process to effectively measure and track data on localization:
- Strictly define the numerator: “local entity” – One starting point is for the Agency to approve a clear definition for “local organization” for the 25% funding target. Back in January, we stated that the definition should be narrow and not include country offices of international NGOs, also called “locally-established partners.” Other long-time advocates on locally led development have gone a step further to recommend definitions.
- Determine the denominator: type of foreign assistance – Another foundational issue is to announce which funding streams will be included in the 25% and 50%. Will this include development assistance, health funding, humanitarian assistance, economic support funds, and/or government-to-government? Establishing this “denominator” is vital for tracking the resources.
- Proceed with transparency: Publicize the baseline data and guidance for future data collection – MFAN commends the House Appropriations Committee for requiring that USAID report on how the Agency is tracking funding to local entities and plans to in future years. As a first step, USAID should share the data that brought it to conclude that 6% of USAID funding currently flows to local partners as Administrator Power said in her November speech. Moreover, USAID must clarify how data will be collected and published to track the 25% and 50% targets in the future and when they plan to report on progress against it.
For USAID’s ambitious agenda to get out of the gate, these three issues must be resolved. There must be a real change from current definitions and practice, or the entire exercise will fail to make the fundamental shifts that are needed to achieve LLD. Subsequent to this, USAID should publicly share an Agency-wide vision and strategy for LLD to inform the global dialogue on localization, to guide USAID implementing partners, to enable the aid community, Congress, and USAID itself to hold USAID accountable, and to achieve the sea change in locally led programming we all want.