This page provides a summary of discussions from the Future Humanitarian Financing (FHF) cross-sector dialogue hosted by Groupe URD in Dakar on 26th November 2014.

Emerging themes

  • The traditional values of solidarity are extremely vivid in Africa and there are many important flows of resources to affected populations from within Africa, including Zakat, and from overseas African communities. How to support them, engage with their stakeholders and coordinate aid response between the formal and informal flows of resources is critical.
  • The Diaspora funds and other traditional funding mechanisms such as ‘tontines‘ are not meant to be channelled through the classic Aid system but through peer to peer systems in support to village banks. Still, there is a role to play in technical support and in coordinating classic Aid actions and local ones.
  • There is a strong place for private sector actors in the implementation of social services, possibly shifting to emergency relief during crisis situations.
  • In Africa, the limits between relief, rehabilitation and development are not always distinguishable.
  • The private sector is expected to be providing an ‘enabling environment’ with functioning banks, telecommunications, and local factories producing what populations and NGOs need.
  • Some successful Public Private Partnership projects should be investigated and analysed in order to be reproduced.

The following sections elaborate some of the major discussion themes examined during the dialogue event.

African perspectives on LRRD

The separation between emergency relief and development is not clear in Africa. Focusing on the humanitarian prism means being locked in a disaster management system, whereas integrating short term operations as a part of a development process would allow resolving crises in a sustainable way.

The nature and impact of humanitarian crises is changing, new types of response and new actors are emerging. Current financing methods are not suitable for these new contexts and actors. Previous reforms have not managed to guarantee that humanitarian financing is opportune, flexible and based on needs.

The role of the Diaspora

Funds raised by Diasporas for their families back in the homeland are mechanisms which are becoming increasingly powerful and important for societies which are affected by crises and this has partly been made possible by mobile phones and other recent mechanisms.

According to studies on the subject, Diaspora money that is transferred is largely used for daily subsistence, but also supports social infrastructures such as clinics, schools or even mosques. Peaks in transfer are often observed when a crisis occurs in the areas of origin. It would be interesting to propose developing annexed financial services and health insurance of families in the homeland. However, the importance of not considering the Diaspora solely as a source of funds but as partners was emphasized and also the fact that migrants certainly don’t have an obligation to finance projects, it is a personal choice, and that they cannot and will not replace institutional donors or states.

The idea of creating a coordination platform could bring together all actors for a real discussion about Diaspora financing as a first step towards the development of an innovative system.

 

Improving Efficiency

With the rising number of large scale crises, and the increasing demand, the existing mechanisms (appeals by NGOs, by the Red Cross movement and the United Nations system) are all beginning to be under stress. There is therefore a need to think strategically, on effective new approaches because the humanitarian system needs to revise how it finances aid.

Previous reforms have not sufficiently managed to guarantee that humanitarian financing is opportune, flexible and based on needs. The United Nations emergency relief mechanisms lack effectiveness and reactivity with resources lost in terms of running costs. Rather than asking for more, there should be a demand for efficiency; “we could do better with less”. The slowness of humanitarian financing has been stressed as a huge problem.

There is a dynamic based on the analysis of how emergencies are managed, before, during and after, which makes it possible to improve the aid provided to communities and how it is financed. New operational methods are required given the shifting of contexts – how to access Northern Mali for example? There is a need to create a potential of capacity for them. The current structure of humanitarian aid is unbalanced, only approximately 1.6% is managed locally, hence the volume of aid which reaches communities directly is very small.

The architecture of international humanitarian financing needs to reflect the diversity of actors involved in the response and in its financing and needs to be reorganized to match the evolution of the ecosystem of participants, notably by improving the local actors’ operational and fund raising capacities, through training , decentralisation, and even through a shift of power.

Empowering the South

FHF TontinesAfrican States and Civil societies are questioning their level of responsibility in responding to crises on their continent, and this cannot be operated through the mobilization of resources at international level. How can national resources and international aid be combined to better finance humanitarian aid? Perhaps part of the solution lays in the creation of multi actor dialogues per country in connection with national economic policies. Besides, there is a breach of trust and a crisis of confidence between populations and aid organisations. The INGOs are often considered as rich organisations, who have “enough” funds. The solutions are no longer expected to come solely from the Western world; furthermore there is a will to halt the situations of dependence on external aid

Propositions were made for scaling-up and adapting the existing solidarity initiatives at local level to a wider system, by creating synergies between actors based on an approach of exchanged donations. Education, art and sport were also mentioned as essential seeds for the development of positive initiatives in Africa. The traditional saving systems, such as tontines, also known as Rotating Savings and Credit Association were also discussed, it was proposed that their functioning could be analysed to find ways of running them more effectively. It appears that they have an active role in the development process as a whole, but remain categorised as an informal phenomenon, and since informal finance is excluded from the analysis, it becomes difficult to pin down their effects. However, it is recognized that informal finance helps fund the modern sector, while the informal sector itself needs institutional finance to exist.

 

About the Future Humanitarian Financing Initiative

FHF is convened on behalf of the Inter-Agency Standing Committee (IASC) task team on humanitarian financing and is led by a steering group comprising CAFOD, the UN Food and Agriculture Organisation (FAO) and World Vision and funded by the Government of Germany and FAO.

The purpose of the FHF initiative is to discuss the potential of new and emerging approaches to financing and investigate how these might support both a more open and adaptive humanitarian endeavour as well as new business models fit to meet the changing nature and scope of humanitarian crises.

The FHF initiative will follow a multi-stakeholder exploration of the potential and implications of financing approaches used outside, and at the margins of, the humanitarian sector – including the opportunities and risks these pose to the key actors and current modes of humanitarian response.

Dialogue events were held in London and key centres of regional humanitarian coordination including Amman, Dakar and Bangkok, with a final synthesis to be held in Geneva in January 2015.

Expected outcomes of the FHF initiative include:

  • a more robust understanding within the humanitarian community of the characteristics and comparative advantages of alternative financing approaches – and their potential to address humanitarian needs;
  • a set of recommendations for the IASC Principals and members that will constitute an agenda for research, experimentation, adaptation and engagement with emerging financing approaches as well as linked recommendations proposing adjustments to existing financing approaches;
  • the beginnings of an expanded collaborative network of humanitarian financing actors, which may be developed and sustained beyond the lifetime of the FHF initiative.

 

MORE REPORTS

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s