The Official Development Assistance (ODA) landscape in South Africa remains much the same as in 2015. Global economic uncertainty, development partner budget constraints, and increasing pressure to channel funds to least developed countries all continue to place pressure on the level of support given to South Africa.
That said, grants in particular are governed by multi-year contracts, and a reduction in support is therefore likely to be steady, as relevant contracts expire over time. In addition, some contractual relationships stand to be renewed, albeit at a lower level.
Figure 1 below shows the amount of funding flowing through the RDP Fund Account, with projections to 2019/20.
The effects of the 2008/09 financial crisis are apparent, with receipts dropping from R2 billion in 2008/09 to R1 billion in 2010/11, before recovering to R2.335 billion in 2013/14. Since then, however, receipts have dropped below R1.5 billion and are expected to fall to R0.7 billion in the next 2 years. Furthermore, South Africa’s three largest Development Partners (USAID, the European Union and Germany) all face some degree of political and economic uncertainty. All three will be subjected to significant geo-political events in the short term, which may influence their approach to ODA: USA will inaugurate a new administration in January, BREXIT and escalating humanitarian / refugee crises in Syria will likely cause the EU to focus inward, while Germany is due to hold federal elections in 2017. The uncertainty occasioned by these events means that a pronounced uptick in ODA is unlikely.
OPPORTUNITIES
2015 saw the adoption of two important frameworks for development practitioners: the Addis Ababa Action Agenda and the Sustainable Development Goals. Work is ongoing as to how these frameworks will be operationalised. However, it is already clear that greater reliance will be placed on working in partnership (as opposed to donor–recipient relations), on domestic resource mobilisation (from increasing tax revenue, to combatting illicit financial flows, to partnering with new actors) and on attaining development paths that include greater cognisance of environmental impact.
Moreover, the global landscape is increasingly characterised by new or emerging actors (Non-DAC
sovereigns such as BRICS) and Multilateral donors; philanthropy and foundations; Private sector and NGOs, new approaches and models (Triangular and South-South Cooperation; Blended and Hybrid Finance Mechanisms; Climate and Green funds; Impact Financing; Global Public goods; Public-Private Partnership) and a new, universal global development framework. Each of these developments creates opportunities to re-think the way development work is done but requires a high degree of innovation and flexibility. To borrow a phrase from politics, “it cannot be business as usual.”
In short, South Africa’s development professionals should prepare themselves to be less reliant on traditional ODA
forms. We will need a diverse set of skills (from negotiations to stakeholder management, to project management and financial skills), we will need to break out of our traditional government silos to develop cross-cutting initiatives, and we will, from a government perspective, need to be willing to relinquish control in order to partner with outside actors.
