Here is our monthly roundup of news from the aid and development transparency space:
DFIs weak on disclosure of financial information
There is inadequate disclosure of both aggregate and project level financial information across development finance institutions (DFIs), according to new research from our DFI Transparency Initiative. The research examined the transparency of 17 bilateral and multilateral DFIs and found that transparency gaps make it difficult to assess DFIs contribution to market building. Key findings include:
- Disaggregated reporting of co-financing information was limited, including levels of concessionality in investments and mobilisation of private finance.
- While a large amount of aggregate data was identified, a lack of standardisation and systematic reporting means that different types of data were reported by different DFIs making comparability difficult.
- If DFIs are to contribute to the creation of private markets it is essential that they provide financial information from their investments to allow private investors to understand market conditions and opportunities for investment.
Ahead of the launch of the report we spoke to two specialists in the DFI sector. We wanted to understand the hard reality of what’s available and what’s not, and the arguments behind why transparency is so important. Our CEO, Gary Forster, sat down with Thomas Venon, founding partner of Eighteen East Capital, to discuss our research findings.
“DFIs are pioneers, explorers, but without access to the maps they draft, others cannot follow, and much value is lost.”
Gary also spoke with Nadia Nikolova, portfolio manager at Allianz Global Investors about why DFI transparency is important for the private sector.
“I can’t tell you how the market will change, but the power of data in making people think about creative solutions is something that we have seen before. We will see more and more investors focussed on impact investment. DFIs should provide the data, so investors can determine whether a co-investor product with a development bank is an impact product.”
Assessment method updated for the 2022 Aid Transparency Index
We are pleased to announce that our review of the Aid Transparency Index assessment method has successfully concluded. We have a new Technical Paper which we will use for the 2022 Aid Transparency Index assessment. We periodically review and update the assessment approach to ensure that it remains aligned with aid transparency standards, reflects current practice and continues to improve transparency. We are also careful to ensure that changes are gradual so credible comparisons can be made with scores from previous indexes. We will be carrying out the donor selection process for the 2022 Index over the next two months and plan to announce which organisations and agencies will be included in late July.
Untangling the UK aid cuts – a transparency journey timeline
Many aid agencies are facing very uncertain times following the UK government announcement that it will reduce its aid commitment. In this blog, Elma Jenkins timelines the communication of, and reactions to, the UK government’s aid cuts over the past year and poses the question, is this a new era of UK aid transparency?
Save the date: launch of transparency and gender financing research
We will be launching the global transparency findings from our gender financing research on 8th July. The online event, hosted by the Brookings Institution, will provide an opportunity to consider our recommendations for improved transparency and discuss the implications for more effective gender funding with a panel of diverse stakeholders. More details to follow.
Aid transparency and Russia – roundtable discussion
Our CEO, Gary Forster, and Head of Research, Alex Tilley, recently spoke at a roundtable event organised by the Center for Advanced Governance – focused on aid transparency, our Index and Russia. The discussion also featured contributions from Russian experts from the Humanitarian Monitor project, Moscow State University and RANEPA and representatives of government agencies. You can watch a recording of the discussion here.
And here’s a selection of news stories we’ve been reading over the last few weeks:
The Center for Global Development has released the 2021 Quality of Official Development Assistance (QuODA) which assesses 49 of the largest providers of development cooperation on four dimensions of quality: prioritisation, ownership, transparency and untying, and evaluation. The data can be accessed through an interactive web tool. Key findings include:
- Multilaterals dominate the overall rankings, taking each of the top five positions.
- Agencies that give a higher proportion of their gross national income as ODA perform better on QuODA – a finding that runs directly counter to the narrative that higher spending leads to waste.
- In 10 years since the Busan agreement on development effectiveness, aside from transparency, there has been little progress. Providers need to do better on aid effectiveness.
The International Budget Partnership has released an assessment of the transparency and accountability of COVID emergency fiscal policy packages in 120 countries. It finds that more than two-thirds of surveyed governments are falling short of managing their fiscal responses in a transparent and accountable manner, thereby jeopardising the effectiveness and impact of their responses to the crisis. It points to the failure to adopt accountability measures, the limited role of legislatures, and the lack of public participation. The report also highlights good practice, and says that an urgent and speedy response does not have to come at the expense of accountability. Among its recommendations, it calls for donors to support country-led efforts to publish more information about what governments are spending and its impacts and to facilitate oversight by legislatures, auditors and citizens.
A report from the International Rescue Committee and Development Initiatives analyses humanitarian funding to the Covid-19 pandemic response in 2020. Key findings include:
- Humanitarian funding failed to keep pace with rises in Covid-19 cases and their consequences. The impact of Covid-19 contributed to an increase in humanitarian needs by 40% over 2019’s needs.
- A total of US$6.6 billion of humanitarian grants was contributed to the Covid-19 pandemic response, including US$3.7 billion channelled to the UN’s Global Humanitarian Response Plan (GHRP). Only 39% of the GHRP’s funding requirements were met.
- Just 16.5% of all humanitarian funding to Covid-19 was provided directly to NGOs (international, national and local). The reported data still does not show how much funding is passed down the funding chain to front-line implementers.
- Data reported to the UN Financial Tracking Service and published to the International Aid Transparency Initiative (IATI) has significant gaps, creating an incomplete picture of the response.
Donor Tracker recently held a webinar and released an Insights piece Providing a broad overview of how China frames its own role in international development, its financing for development cooperation, and its strategic priorities. Findings include:
- Between 2013 and 2018, China’s annual average spending on foreign assistance reached approximately US$7.0 billion, growing by almost 50% compared to 2010-2012.
- 45% of China’s foreign assistance goes to African countries, followed by Asia (37%).
- China’s ‘ODA-like’ flows in 2019 are estimated at US$5.9 billion, which would make China the sixth largest provider of ODA.
- Although bilateral flows remain predominant, multilateral commitments are an increasingly important component of China’s development cooperation.
- Transparency around Chinese development finance remains a challenge despite apparent efforts on the government’s part to improve communication and accountability.
As India faces soaring numbers of COVID-19 cases, Congress and others have called for transparency in the distribution of aid during the COVID-19 pandemic and urged Prime Minister Narendra Modi to make public details of all foreign aid received by India.
This Bankwatch blog criticises the transparency of the European Investment Bank (EIB). It says the secretariat of the Aarhus Convention contends that the EIB’s draft transparency policy “isn’t fully in line” with the UN treaty, and that the EIB is “legally bound to ensure access to information, public participation in decision-making and access to justice meeting the requirements of the Convention in the context of their activities and operations.”
Open Data Watch and Data2X have launched A new report which takes a detailed look at the state of gender data financing, highlights existing funding for gender data, and the gap between current financing and the level of financing that is needed to fully fund gender data systems from now until 2030. The report calls on the gender data community to build a coalition for more and better financing, increase demand for gender data, deliver on the promise of new sources of data, encourage a country-driven approach, prioritise core data systems, and advocate for increased donor funding.
A new Eurodad report provides new insights into the 501 institutional investors which hold a total of US$169 billion in sovereign bonds of 62 developing countries. It addresses the lack of transparency around the structure and holdings of the bonds of low and middle-income countries.
Sign up here to receive our monthly newsletter