Aid effectiveness of the Zimbabwe multi-donor trust fund

Summary of research¹

Location: Zimbabwe

What we know: There is a lack of evidence on the extent to which multi-donor trust funds (MDTFs) contribute to aid effectiveness in fragile and conflict-affected states.

What this article adds: A recent evaluation examined the extent to which a Zimbabwe MDTF (ZimFund) targeting water, sanitation and energy sectors adhered to the Paris Declaration principles on aid effectiveness between 2010 and 2013. Interviews examined the key principles of ownership, alignment, harmonisation, mutual accountability and management for results. Although aligned with national development priorities, the Government of Zimbabwe (GoZ) lacks ownership and direct engagement in the ZimFund, which is largely donor-driven. There has been little investment in state infrastructure and use of local procurement systems. A communication strategy has been poorly implemented. The ZimFund increased harmonisation among international donors but not between in-country stakeholders. A limited mid-term review and weak performance-tracking raise concerns regarding accountability. The review concludes that political relations between recipient and donor countries are vital for the functioning of MDTFs; MDTF design affects delivery and function; targeting local authorities could offer more tangible results; and focusing on the recovery of key sectors such as water, sanitation and energy could lead to MDTFs having direct, positive impacts on the recipient country.

Introduction

The central financing vehicle increasingly used in fragile and conflict-affected states (FCAS) is the multi-donor trust fund (MTDF), which channels pooled aid resources from government and non-government donors, administered by an agreed trustee organisation. Zimbabwe is a fragile state where the international donor community’s collective response revolves around five MDTFs. One of these is the Zimbabwe MDTF (ZimFund). This was created at the request of seven main donors in Zimbabwe to rehabilitate water, sanitation and energy. Since 2010, the fund has been administered by the African Development Bank (AfDB). The fund is governed by a Programme Oversight Committee (POC) that oversees all functions and administration and reviews progress, and an MDTF management unit (MMU), responsible for the collection and quality control of project proposals and appraisal. The AfDB is both fund manager and implementing agency, although actual implementation is contracted to external companies. The fund has two projects, the first of which is the Urgent Water Supply and Sanitation Rehabilitation Project (UWSSRP), implemented in six municipalities to increase reliability, quality and availability of water supply, restore water treatment capacity and reduce incidence of cholera and other water-related diseases, with a grant of US$29.65 million. The second is the Emergency Power Rehabilitation Project (EPRP, which aims to improve the reliability of power supply through the rehabilitation of Hwange Power Station Ash Plant and the sub-transmission and distribution facilities within the country, with a grant of US$35 million. This paper evaluates ZimFund adherence to the Paris Declaration principles on aid effectiveness² to provide vital insights for MDTF literature.

The author undertook interviews with 23 individuals, selected through purposeful sampling based on their association and experience with ZimFund projects, mainly from the Government of Zimbabwe (GoZ), ZimFund donors and the AfDB. Interviews were conducted between 1 June and 1 September 2013 using a set of open-ended questions based on the five Paris Declaration principles on aid effectiveness: ownership, alignment, harmonisation, mutual accountability and management for results. The paper evaluates findings in each of these five areas.

The principle of ownership is that donors should strengthen government capacity in implementing and managing development projects. The ZimFund focuses on priorities in the GoZ’s development strategy (the medium-term plan (MTP) 2011-2015); however the GoZ is not directly involved in the management of the fund, which is to a large extent ‘donor-driven’. Fund donors are restricted in engaging directly with the GoZ, due to sanctions by their own governments, and have therefore been forced to use indirect means of engagement through the AfDB, a non-state actor. Opportunities for the GoZ to have proper engagement and ownership of the fund have therefore been missed.

While the focus of the ZimFund is aligned with MTP priorities, there is poor alignment between fund activities and local authorities and with the Zimbabwe Electricity Supply Authority (ZESA). As a result there has been little investment in state infrastructure. Government ministries are provided with short-term consultants or specialists contracted by the AfDB to assist in certain areas, rather than building capacity of government employees, and a separate procurement system is used, which leads to overseas rather than local product procurement. In this way, ZimFund donors exert excessive control.

Government officials do not always attend POC meetings (this could be improved on) and there is little evidence that such meetings are used as a way of harmonising ZimFund projects with other donor projects in Zimbabwe. Efforts have been made by the MMU to develop a broad communications strategy that communicates programme information to a wide audience and guidance exists for ZimFund projects to include environmental and social components. However, interviews and results of a 2013 mid-term review reveal that this has not filtered through into practice. The ZimFund has, however, facilitated harmonisation of the seven donors’ activities in Zimbabwe through coordination of activities and development of common planning, monitoring, evaluation and reporting.

In terms of mutual accountability, the ZimFund produced a mid-term review in 2013 to provide an account of its activities and internal workings, but only partially fulfilled the terms of reference. Areas not covered include detailed analysis of ZimFund compliance with bank rules and procedures, risk assessment and mitigation measures, donor coordination, and monitoring and evaluation. This demonstrates some lack of accountability. Furthermore, the ZimFund monitoring processes are detached from government processes and, at a ministerial level, the Ministry of Finance does not directly account for ZimFund projects to parliament. On the positive side, the Ministry of Finance did report to parliament on ZimFund progress through budget statements for 2012 and 2013 and reports from the POC are sent to the cabinet, which constitutes some accountability to the legislature.

In terms of management for results, ZimFund has so far used a weak performance assessment framework that does not provide detail on performance and indicators, although efforts are being made to improve this. The 2013 mid-term review found no tangible results on the ground in the form of implementation, which has been a concern for stakeholders, including the GoZ. However, there is recognition that this is a pilot programme for the AfDB and donors alike, both of whom lack MDTF experts and are constantly learning, which has created delays.

This case study demonstrates that aid effectiveness of MDTFs is context-specific and heavily influenced by politics and the institutional structure of the trust fund. The experience of the ZimFund provides several lessons. Firstly, political relations between recipient and donor countries are vital for the proper functioning of MDTFs; this has been severely hampered in the case of the ZimFund by donors working through non-state actors. Secondly, design of MDTFs has an important effect on delivery and, when there is no formal engagement with government, the use of neutral, acceptable and credible bodies as fund administrators is fundamental. Thirdly, while the legitimacy of national governments in fragile states is often contested, targeting legitimate and credible state institutions, such as local authorities, can offer tangible results. Finally, MDTFs focusing on the recovery of key sectors such as water, sanitation and energy have direct impacts on economic recovery and people’s lives.

Footnotes

¹Muchadenyika D. (2016). Multi-donor trust funds and fragile states: assessing the aid effectiveness of the Zimbabwe multi-donor trust fund. Journal of international development. 28, 1337-1357. DOI: 10,1002/jid.3237

²The Paris Declaration (2005) is a practical, action-oriented roadmap to improve the quality of aid and its impact on development. It outlines a series of specific implementation measures and a monitoring system to assess progress. www.oecd.org/dac/effectiveness/parisdeclarationandaccraagendaforaction.htm