Mark Lowcock, the permanent secretary of the Department for International Development (DfID), is passionate to talk about aid effectiveness and accountability issues. Lowcock began his career at DfID (formerly the Overseas Development Administration) in 1985 and has occupied the roles of secretary to Baroness Chalker, minister for Overseas Development from 1992 to 1994, deputy head and later head of the DfID ‘s Regional Office for Central Africa, based in Harare, Zimbabwe, from 1994 to 1997. He has also worked as the head of the European Union Department from 1997 to 1999, before returning to Africa as Head of DfID’s Regional Office for East Africa, based in Nairobi, Kenya.
Between 2001 to 2003, Lowcock served as the director of Finance & Corporate Performance. He then moved to serve as director general of Corporate Performance & Knowledge Sharing, from 2003 to 2006. He also served as director general of Policy until 2008, eventually moving on to serve as director of Country Programs for three years up until 2011.
He has been visiting Ethiopia since 1986 and was here last week with the objective of meeting government officials and UK businesses operating in Ethiopia.
In this exclusive interview with BINYAM ALEMAYEHU, EDITOR-IN-CHIEF, Lowcock talks about aid effectiveness, accountability and human rights issues. Excerpts:
FORTUNE: The G-8 countries have committed to devoting around 0.7pc of their gross domestic product (GDP) to Official Development Assistance (ODA). Britain is getting closer to this target. But what about aid effectiveness – the extent to which British aid is being utilised for its intended purpose?
Mark Lowcock: Yes, you are right. The UK, this year, will spend about 0.7pc of our national income on ODA. That amounts to 16 billion dollars.
Under the law in the UK, we can only use that money to promote development and to reduce poverty. In fact, one of my responsibilities is to make sure that everything we do complies with that law.
Here in Ethiopia, I believe that there has been fantastic progress in reducing poverty, reducing infant mortality, ensuring that more boys and girls go to school and that few die in child birth from the very difficult starting point when I first came here.
Every time I come here, I am impressed by the progress that is made. Yesterday, (Thursday, December 12, 2013), for example, I went to one of the schools out of Addis Abeba for a visit. I saw students learning economics.
I am an economist by profession, incidentally, and we had a discussion on economics. I was just very impressed by the quality of the secondary school education.
Q: But identifications from the parliamentary inquiry committee on development show a different result. There has been reports that UK’s aid is not being utilised as effectively as it is should be. There is even mishandling in some cases that is reported. What have you been doing to address these issues?
We have a very sophisticated system at DfID. In fact, my senior colleagues spent a considerable amount of time making sure that our projects are well-designed and well-implemented, and that they are reaching the intended beneficiaries.
Overall, our success in that is very high. For example, over the past four years of our spending review, we will be financing more than nine million girls and boys to go to primary schools in developing countries. We have very good data, and monitoring and auditing so that we know exactly what is happening.
We are enabling more than 50 million people to have access to financial services. We are also financing 50 million people to have better prevention against malaria. We track all those commitments. We monitor all those programs we finance. We evaluate them. We know what has been successful and what has not been successful.
Q: But what about the alleged mishandling? Are you saying they never occurred?
Of course not. If you are running a very large development program like we do, in some of the world’s poorest countries, there are chances that things go wrong. Of course, there are problems.
But, overall, we are satisfied with the general success of the programs we finance. And that is true here in Ethiopia, as well as in so many other countries.
Q: Britain’s performance on the aid-for-trade agenda remains low. Apart from a few major breweries, British investment in Ethiopia is not visible. Is there any initiative to change this?
During my visit, I have been talking to investors from the UK and visiting some of the factories. Yesterday, I saw one factory producing leather goods, garments and bags to export to the US, the UK and other parts of the world.
That is a very important British investment. There are hundreds of Ethiopian citizens working here for the company. They are successful exporters and are growing rapidly.
There are also lots of other interested British investors. I, thus, detect a change in peoples’ perception about Ethiopia.
Over much of the last 15 years, the focus of British development assistance to Ethiopia has been on human development and such things as health, education and water and sanitation. And I think, the country has made fantastic progress on those things.
But the government of Ethiopia and that of the UK have agreed that, while the human development assistance should continue, more will be done in the area of economic development.
Q: But why has it taken so long for British investment to pour into Ethiopia?
There is indeed a tremendous change in the interest of British investors to come to Ethiopia. The situation is certainly much better than it was a decade or two ago. That is a reflection of the progress the country has made.
I am very optimistic about the prospects for Africa in general and Ethiopia in particular. My impression is that investors are getting more optimistic as well.
Q: International organisations, like DfID, operate using implementing partners. Some observers argue that is prominently done to outsource accountability because there is a political heat to be faced back home. What is your take?
I disagree with the observers. We work through various partner organisations, such as the United Nations, the World Bank, private sector organisations, NGOs and others. But we have a very high degree of accountability and expectationsfrom these organisations in the work they do. We spend a lot of time and effort, ensuring that these organisations are spending the money we give them on exactly the things stated in the contractual agreement.
I, therefore, do not think it is a valid argument to say that just because an organisation works through implementing partners the accountability chain is weak.
Q: Global evidence shows that this is one of the ways in which aid money is mishandled. The criticism, therefore, revolves around the alleged intention of the bigger organisations.
As far as we are concerned, we take great care. We do a whole lot of scrutinising – like complex systems of due diligence to scrutinise the governance of the partner organisations; how good they are; whether they have good financial management, and whether they have qualified staff.
We look at the organisations before we channel money through them. Then, we monitor, we evaluate and we review the way they spend the money.
Q: Ethiopia is the largest recipient of British aid money. In the post-2005 period, aid flows have come outside of direct budgetary support. There seems to be a serious contradiction here. On the one hand, a large amount of aid is provided to Ethiopia, reflecting Britain’s satisfaction with the performance of the Ethiopian government in expediting development. On the other hand, the absence of direct budgetary support implies that Britain has doubts on whether the Ethiopian government could actually use the money appropriately. Do you intend to shift back to direct budgetary support as you used to in the pre-2005 period?
The reason we collaborate with the World Bank and many other donors in supporting things like the Protection of Basic Services (PBS) program and the Productive Safety Net Program (PSNP) is because, if the donors get together and fund those major programs collectively, then the government only has to have one collective dialogue with donors, rather than having multiple discussions with each of them.
We actually have a very high degree of confidence that money that passes through things like the PBS and the PSNP is spent very effectively in the country. The PBS, for example, makes a major contribution to the payment of teachers’ salaries in this country. The UK, through that, effectively pays 12pc of teachers’ salaries in this country.
One of the reasons why it has been possible to have a massive expansion of primary education and secondary education is because there are teachers, books, schools and desks and chairs.
Q: Is there any chance of going back to the pre-2005 system of direct budgetary support?
No, we actually think the current instruments we have are efficient in channeling resources to achieve the outcomes we are keen to achieve. We think these programs are efficient. Having the donors join up and work collectively is a strength in terms of the way things operate rather than a problem in my opinion.
Q: The European Union’s (EU) aid strategy attaches paramount importance to human rights issues. How far is Britain, as a member of the EU, committed to human rights in its aid programs?
Human rights are extremely important in every country. The UK stands up strongly for human rights.
That is an important part of the dialogue between the EU, including the UK, and all the 71 African-Caribbean countries, which are party to the Cotonou Convention.
As countries develop, citizens aspire for more freedom. In fact, the process of development is the process of creating freedom. They are absolutely intrinsic to the work of DfID.
Q: In the pre-2005 period, British support to Ethiopia involved capacity building components in the area of human rights. If we look at the latest trend, however, capacity building focuses on such issues as health and education. Why are human rights not included? Is it an indication that it is being neglected?
Human rights is certainly a concern. We have a very wide ranging and broad development program here.
We recognise that there are many other donors as well. One thing we want to do is not simply copy what everyone is doing, but rather operate in a way in which the whole system adds up to something coherent, rational and easy for the country to manage.
Q: But good governance and human rights stood out prominently among the UK’s priorities. Even in the post-2005 period, Ethiopia remains to underperform in human rights and good governance issues, but they are not given importance in the UK’s aid.
The UK government has certainly been expressing its serious concerns with human rights issues in Ethiopia. We raise that consistently every time we have a high-level interaction.
Likewise, we are very passionately committed to good governance.
It is not the case that these issues have become less prominent in our dialogue. The desire for greater human freedoms is something that goes along with the development process. I see that in all the countries I visit.
We, as DfID, will continue talking about these issues with all the countries we work in.
Q: The Girl Hub – a joint initiative by DfID and Nike Foundation – has been the subject of criticism by some, who say that it sidelines questions of structural inequality and power imbalance, and focuses on what girls can do for development, rather than what development can do for girls.
I completely disagree. I think that the kind of program we are doing on girls and women and our cooperation with the Girl Hub is addressing big issues. I had a talk this morning with a minister, who emphasised the importance of educating girls. I talked to female students here too.
It is to be admitted that it has not got to the point where the government liked to get with its assistance. There are some particular things that the Girl Hub is focused on.
It focuses on ending child marriage. Now this is much less than it used to be in this country. Another area where we have a good focus is ending female genital mutilation (FGM).
There is a whole range of areas where programs like the Girl Hub can contribute to empowering girls and women, giving them more confidence and better capability to express their point of view.
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