A project to improve access to urban land for the poor implemented by a local NGO in South Africa used to be funded by the United Kingdom’s aid agency, but last March that money dried up and the organization had to close shop.
U.K. Secretary of State for International Development Justine Greening.
The program implemented by Urban LandMark had been receiving support from the U.K. Department for International Development since 2008, gradually increasing until 2011, when from 903,827 pounds ($1.4 million) the funding dropped to 393,025 pounds.
The money then picked up for the period 2012-2013, reaching more than 1 million pounds. But that was the end of it, a source who spoke on condition of anonymity told Devex. The organization tried looking for alternative sources of funding, but the attempts have been futile.
Today the organization is nothing but virtual — no more staff, no more office, just a website.
DfID no longer renewed the grant for the program. When and what the circumstances are for this decision remain unclear, but the case study paints a picture of how the United Kingdom’s decision to end aid to South Africa by 2015 has already trickled down to several nonprofit organizations that are struggling to make ends meet in the country.
A “smart” move?
In the immediate aftermath of the announcement, SANGONeT, a network of South African NGOs, said the U.K.’s withdrawal provides an opportunity for South Africa to end its dependence on aid.
Some agree. A number of Devex readers described the move as “smart.” But others, such as Carlos Orte, COO of the TB/HIV Care Association, don’t approve at all.
“While the amount of aid received is very small (0.3% of GDP), it ensures critical services are provided to people that are underserved by government services,” Orte told Devex.
U.K. Secretary of State for International Development Justine Greening’s words — “South Africa is now in a position to fund its own development” — has raised a lot of questions among aid groups that have work in the country: Just how did DfID come to that conclusion?
Of course, the skirmish over whether the South African government was consulted or not remains contentious. But almost everyone Devex has spoken to said huge inequalities remain across the country.
Only 28 percent of adult South Africans have access to credit, a “persistently stubborn high unemployment rate” affects the working population and “large pockets of poverty” are reported particularly among the black population and female-headed households, as well as high infection rates of HIV and AIDS, according to data from the World Bank.
“The unresolved set of complex economic challenges has locked South Africa into a low-level equilibrium of low growth, persistent poverty and widespread exclusion and unemployment,” the bank explains.
Danny Sriskandarajah, secretary-general of CIVICUS and a Devex London 40 under 40 awardee, said GDP or the average income of people does not at all tell much about a country.
“Anyone who’s done first year economics will know that the average can hide a very complex context, so if you just look at average income in SA or in some of these emerging economies, that doesn’t tell you much about what’s happoening at the bottom of the pyramid,” he argued. “That’s the danger we’re falling into. Average income are going to define aid expenditure, when we know average doesn’t tell us about the poorest end of the income spectrum.”
The NGO reality
The truth is, not so much U.K. aid goes to NGOs in South Africa. DfID sources told Devex roughly 12 percent of the agency’s 19 million pound per year program for the country is allocated to nonprofit organizations.
But even in a country increasingly being eyed as an emerging donor in its own right and which many donors see as not needing lots of aid money, funding is still funding. DfID’s withdrawal, Orte said, will “put more pressure [on NGOs we work with], making the competition for [the] remaining funding even more fierce.”
In fact, this could also have an impact to “well-funded” groups such as the TB/HIV Care Association.
“TB/HIV Care does not receive funding from DfID, but we collaborate with other organizations that are funded to some extent by DfID (…) This will probably result in our organization having to devote even more resources to proposal writing,” he said.
“In addition, when because of funding cuts, there is a shortage of supportive services and partner organisations to which we can refer cases with special needs, delivering our own core services becomes more difficult,” Orte added.
Sriskandarajah said not a week goes by in South Africa these days where an NGO closes down or scales back its activities.
Even SANGOCO, a national umbrella body for NGOs, is currently being housed by CIVICUS because “they were finding it difficult at the moment to make ends meet.”
The HIV/TB Care Association has wide sources of funding, from PEPFAR, the Stop TB Partnership, a subgrant from the Global Fund to Fight AIDS, Tuberculosis and Malaria, individual donations and even the provincial government of Western Cape.
But this may not be the case for a number of local NGOs, and Sriskandarajah argued the South African government has not quite developed its strategy yet for supporting them.
“The state has enough trouble [addressing priorities such as health care and education] … let alone trying to support local NGOs,” he suggested.
Indeed, the government’s much-talked about South African development aid agency has yet to be fully established.
“My worry is that these are still early days. There aren’t huge resources available, certainly not at the national level. And so without external or donor support, there’s a risk key development outcomes will be undermined,” Sriskandarajah said.
“DfID is the first of donors to pull back out of South Africa. If the state is not gonna step in to fill that role of supporting civil society, then we really are in a difficult situation.”