AID EVAPORATION: DYNAMICS OF SUPPLY SIDE FORCES IN OVERSEAS DEVELOPMENT ASSISTANCE (ODA): CONFRONTING THE GLOBAL AID GOVERNANCE ARCHITECTURE FROM A PAN- AFRICAN PERSPECTIVE

By Dr.Litha Musyimi-Ogana

Aid Evaporation is a new Nortion. It is based on an academic study that comprehensively examined how ODA is governed from the source to the destination. Key ODA parameters emerged from the existing ODA governance frameworks namely; mechanism, ideology, development approach and processes. By unpacking elements contributing to aid ineffectiveness through these parameters, exploring the existence of the aid evaporation and examining the key enablers of ODA Evaporatoon, the study discovered supply side factors contributed significantly to Aid ineffectiveness. It exposed different AID Evaporation enablers which play different hidden functions such as ODA Door Openers, Appetixers, Softeners, Sponges, Convertors, Controllers, Distorters as well as Carrot and Stick among others. Key findings revealed that the prevailing perception that aid ineffectiveness was a demand side problem was only part of the story because supply side challenges were probably more responsible for billions of ODA that could not be accounted for. It has recommended the re-writing of the narrative that ODA ineffectiveness is predominantly premised on demand side by incorporating supply side factors. Findings demonstrated that while there were indeed demand side challenges such as bad governance, corruption and lack of strong institutions, there were also supply (donor) side challenges such as over-reliance of donor's own inefficient ODA governance frameworks as well as ODA delivery mechanisms, the entrenchment of bilateral interest in ODA processess and geo- political interests among other factors. In this regard, the study confirmed that the 62% of the ODA that could not be accounted for according to existing literature was either held up in the pipeline or evaporates mostly from the supply side. This finding brought clarity on the weak impact of ODA and corroborated with existing literature on the mystery of unaccounted ODA. While the notion of aid evaporation emerged as an attribution and part of a reflection on the problem of ODA dissipation at the preliminary stage of the literature review, it became the central issue of focus throughout the research investigation which involved substantive field work to bring clarity on the problem. The study has made theoretical and practical contributions to the existing concepts on ODA governance and proposed a new concept, namely the “Supply Baggage Concept”.

The new concept should inform the Post Paris era in achieving Aid effectiveness by weding out Evaporation, using the Aid Evaporation Detection Framework proposed in this book.

• Language: English
• Publisher: AuthorHouse UK
• Release date: Jun 29, 2023
• ISBN: 9798823082372

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© 2023 Dr.Litha Musyimi-Ogana. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse 06/29/2023

ISBN: 979-8-8230-8238-9 (sc)

ISBN: 979-8-8230-8237-2 (e)

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TABLE OF CONTENTS

Abstract

Foreword

Dedication

Acknowledgements

List of Abbreviations

Chapter 1: Introduction to Overseas Development Assistance (ODA)

1.1 Introduction

1.2 Background

1.3 Problem Statement

1.4 Purpose Statement

1.5 Research Objectives

1.6 Research Questions

1.7 Chapter Outline

Chapter 2: Confronting the Global Aid Governance Architecture from A Pan- African Perspective

2.1 Introduction

2.2 Definitions

2.3 Empirical Literature

2.4 Dominant Concepts Governing Development Aid

2.5 Traditional Global Aid Governance Architecture

2.5.1 The Context: Foreign aid Structure and Global Architecture

2.5.2 Evolution of the Concept of Development Aid and the Marshal Plan

2.5.3 Traditional Donors and ODA Delivery Mechanisms

2.5.3.1 Traditional Donors

2.5.3.2 Bilateral Aid Delivery Mechanism

2.5.3.3 Multilateral Aid Delivery Mechanism

2.5.4 Paradigm Shift in Aid Delivery: End of the Cold War

2.5.5 The Emergence of New Development Partners

2.5.6 Aid Drivers, Proponents and Critiques

2.5.6.1 Historical Linkages in the Global Aid Architecture

2.5.6.2 Aid Politics, Targets, Flows, Trends and Paradigm Shift

2.5.7 Global Economic Crisis nd its Ramification in ODA Flows Africa

2.5.8 Arguments for and against Development Aid

2.5.9 ODA Delivery Models

2.5.9.1 The Top-Down Model

2.5.9.2 The Bottom-Up Model

2.5.10 The Evolution of Aid Effectiveness Debate and the Paris Declaration

2.5.10.1 ODA Governance: Facts from International to National Level

Data from Global Level to National Level

2.6 The African Governance Architecture

2.6.1 The Search for an African Development Architecture

2.6.2 African Union Transformative Approach

2.6.2.1 The New Partnership for Africa’s Development (NEPAD)

2.6.2.2 The African Peer Review Mechanism (APRM)

2.6.3 The Comprehensive African Agricultural Program (CAADP): An Overview

2.6.4 Africa’s Response to Global Governance: Case of APRM and AGA

2.7 The Interface between Global and African Aid Architectures

2.7.1 Introduction

2.7.2 The Aid Governance Architecture Before Paris Declaration

2.7.3 Post-Colonial National ODA Architecture

The Aid Governance Architecture in Pre-Paris era:

Bilateral ODA Relationships

2.7.3.1 Multilateral Relationships at the National Level: Bilateral ODA Relationships

2.7.3.2 Multilateral Relationships at the National Level

2.7.3.3 Economic Interests, the Hidden Factor: ODA as a door opener for Foreign Director Investments (FDI)

2.7.3.4 The Post-Colonial National ODA Commitments

2.7.3.5 Multilateral ODA Relationships in Post-Paris Declaration era

2.8 Summary

Chapter 3: A Theoretical and Conceptual Framework for Engaging the Aid Evaporation Phenomenon

3.1 Introduction

3.2 Theoretical Framework

3.2.1 Theories governing ODA

3.2.1.1 The Modernization theory

3.2.1.2 The Dependency Theory

3.2.1.3 World Systems Theory

3.2.1.4 The Governance Theory

3.3 The Conceptual Framework

3.3.1 Introduction

3.3.2 From Theories to the Conceptual Framework

3.4 Dominant Concepts Governing Development Aid

3.4.1 The Southern Political System Concept Gift Economy Vs Philanthropy

3.4.2 National do-gooder’s Regime The Good Samaritan

3.4.3 The Strategic Communication Regime Media Propaganda

3.4.4 The National Corporationativism scratch my back I scratch yours

3.4.5 Elite Circulation the expatriates’ baggage

3.5 A Hypothetical Understanding of Aid Dissipation in ODA based on Kharas (2007) ratios

3.6 Revisiting Definition of Evaporation

3.7 Paris Declaration Interface with the Governance Theory

3.8 Summary

Chapter 4: Researching on the Aid Evaporation Phenomenon

4.1 Introduction

4.2 Research Approach and Paradigm

4.3 Research Design

4.3.1 Qualitative Research

4.3.2 Mixed Method Research

4.3.3 Case Study Method

4.4 Data Collection

4.4.1 Primary Data

4.4.1.1 Open Ended Interviews

4.4.1.2 Focus Group Discussion (FGDs)

4.4.1.3 Documentary Analysis

4.4.2 Secondary Data

4.4.2.1 Review of Existing Literature

4.4.3 Sampling

4.5 Data Analysis

4.5.1 Qualitative Data Analysis

4.5.2 Content Analysis

4.6 Dimensions for the Inquiry on Aid Evaporation

4.7 Reliability and Validity

4.8 Limitations of the Study

4.9 Ethical Considerations

4.10 Significance of the Study

Chapter 5: Aid Evaporation in Overseas Development Assistance (ODA)

5.1 Introduction

5.2 Mechanisms, Frameworks and Ideology of ODA in Pre-Paris era

5.3 Responses from the Pre-Paris Mechanisms, Frameworks and Ideologies

5.3.1 Mechanisms and Frameworks

5.3.2 Ideology

5.3.2.1 Pre-Paris Declaration Ideology

5.3.2.2 Post Paris Ideology

5.4 The Post-Paris ODA Governance ArchitectureAid: Ineffectiveness and Aid Evaporation

5.4.1 Aid Ineffectiveness

5.4.2 Aid Evaporation

5.4.2.1 Aid Evaporation in CAADP

5.5 The Contribution and Failure of the ODA Governance since the Paris Declaration

5.5.1 Responses on Contribution and Failure of ODA in the Post-Paris era.

5.5.1.1 Contribution of ODA

5.5.2.2 Failure of ODA

5.6 Perceptions of Local Communities neighbouring Masinga Dam Project: captured through FGD and through Observation.

5.6.1 Historical Background of Riakanau Village

5.6.2 Responses on the Perceptions of People on the Effectiveness of the Masinga Dam Project on their Livelihoods

5.6.3 Experience in this Village before the ODA Project was Constructed

5.6.4 Positive Farming Experiences from 2002-2015: A Shift from Top-down to Bottom-up

5.6.5 Conclusion

5.7 Documentary Analysis

5.8 Summary

Chapter 6: Understanding the Notion of Aid Evaporation

6.1 Introduction

6.1.1 The Essence of the Question on Mechanisms, Frameworks and Ideology

6.1.2 Overview

6.1.3 General Construction of themes

6.1.4 The mapping process

6.1.5 Emerging Themes

6.1.6 Highlights of the Leading Themes Emerging on Mechanisms and Frameworks

6.1.6.1 Analysis and discussion on emerging themes on Mechanisms and Frameworks

6.1.6.2 Analysis and Discussions on Themes emerging from Pre-Paris Ideology

6.1.6.3 Analysis and Discussions on Themes emerging from Post-Paris Ideology

6.1.7 Highlights of the Leading/Major Themes on Mechanisms and Frameworks and Ideology

6.1.7.1 The Leading Themes on Mechanisms and Frameworks

6.1.7.2 The Leading Themes on Ideology

6.1.8 Critical Analysis of the Leading Themes on Mechanisms, Frameworks and Ideology

6.1.8.1 A Critical Analysis of the Leading Themes on Mechanisms and Frameworks

6.1.8.2 Critical analysis of the Leading Themes on ODA Ideology

6.2 Paris Declaration’s Interventions on Aid Ineffectiveness and Aid Evaporation

6.2.1 The Essence of the Research Question

6.2.2 Summary of Findings in general

6.2.3 Construction of Themes

6.2.4 The Mapping Process

6.2.5 Emerging Themes

6.2.5.1 Analysis and Discussions of emerging Themes on Aid Ineffectiveness

6.2.5.2 Analysis and Discussion emerging from Theme on Aid Evaporation: Stage 1

6.2.5.3 Analysis and Discussion emerging from Theme on Aid Evaporation: Stage 2

6.2.5.4 Establishing Linkages between Stage 1 and 2 of Aid Evaporation

6.2.5.5 Analysis and Discussions on emerging Themes on Aid Evaporation in CAADP under Stage 2

6.2.6 Highlights of the Leading Themes on Aid Ineffectiveness and Aid Evaporation under Stage 2

6.2.6.1 Leading Themes on Aid Ineffectiveness

6.2.6.2 Leading Themes on Aid Evaporation under Stage 2

6.2.6.3 Leading Themes on Aid Evaporation in CAADP under Stage 2

6.2.7 A Critical Analysis of the Leading Themes in Aid Effectiveness and Aid Evaporation

6.2.7.1 Critical Analysis of the Leading Themes on Aid Ineffectiveness

6.2.7.2 Critical Analysis of the Leading Themes on Aid Evaporation under Stage 2

6.3 The Contribution and Failure of ODA

6.3.1 The Essence of the Research Question

6.3.2 Summary of the Findings

6.3.3 Construction of Themes

6.3.4 The Mapping Process

6.3.5 Emerging Themes on Contribution of ODA and Failure of ODA

6.3.5.1 Analysis and Discussion of Emerging Themes on Contribution of ODA in Post- Paris Era

6.3.5.2 Analysis and Discussions on Emerging Themes on Failure of ODA in Post-Paris Era

6.3.6 Highlights of the Leading Themes on Contribution and Failure of ODA

6.3.6.1 Themes on ODA Contribution

6.3.6.2 Themes on Failure of ODA

6.3.7 Analsis of the Leading/Major Themes on Contribution and Failure of ODA

6.3.7.1 Critical analysis of the Leading Themes on Contribution of ODA

6.3.7.2 Critical Analysis of the Leading Themes on Failure of ODA

6.5 Documentary Analysis

6.5.1 A Specific Focus on ODA Support to NEPAD Secretariat and to CAADP

6.6 Situating the Governance Theory as an Appropriate Vehicle for Addressing Aid Evaporation

6.6.1 Conceptualizing a Framework for Engaging with Aid Evaporation

6.6.2 The Notion of Aid Evaporation

6.6.3 Substantive Conceptualization of how Aid Evaporation Phenomenon Occurs

6.7 The Problem: Justification for a Framework for Engaging with Aid Evaporation

6.7.1 The Intervention: The Post Paris Aid Evaporation Framework (PPAEDEF) The Pyramid

6.7.2 The Realignment of ODA Delivery The Mechanism

6.7.3 The Hybrid Development Approach (HYDA): The Middle Ground

6.7.4 The Post Paris Aid Evaporation Detection Barometer (PPAEDEB) The Barometer

6.8 Summary

Chapter 7: Revisiting the Past, Shaping The Future: A New Dawn in Post-Paris ODA Governance

7.1 Introduction

7.2 Conclusions

7.2.1 Mechanisms and Frameworks

7.2.2 Aid Ineffectiveness and Aid Evaporation

7.2.3 Contribution and Failures of ODA

7.2.4 General Conclusions

7.3 Contribution of the Study

7.3.1 Contribution to Literature

7.3.2 Contribution to Theoretical Framework

7.3.3 Contribution to Conceptual Framework

7.3.4 General Theoretical Contribution

7.4 Implication to Practice(Recommendations)

7.4.1 Introduction

7.4.2 Mechanisms, Frameworks and Ideology

7.4.2.1 Mechanisms, Frameworks

7.4.2.2 Ideology of ODA

7.4.3 Aid Ineffectiveness and Aid Evaporation

7.4.3.1 Aid Ineffectiveness

7.4.3.2 Aid Evaporation

7.4.4 The Contribution and Failure of ODA

7.4.4.1 Contribution of ODA

7.4.4.2 Failure of ODA

7.4.5 Global Level

7.4.6 Continental and Regional Levels

7.4.7 National Level

7.4 Directions for Future Research

References

LIST OF FIGURES

Figure 1: Multilateral Partners Brokerage niche

Figure 2: New Colonial Bilateral Global ODA Architecture

Figure 3: The Donor Recipient Triangle at the National Level

Figure 4: Relationships between Bilateral and Multilateral Partners with Recipients

Figure 5: A Hypothetical Illustration of Project X ODA Allocation Analysis

Figure 6: Image of how Evaporation Occurs

Figure 7: A Pictorial Illustration on Perception of Aid Evaporation at the Preliminary Level

Figure 8: Percentages on Themes Governing Mechanisms and Frameworks

Figure 9: Percentage Presentation on Themes Governing Ideology in Pre-Paris Era

Figure 10: Percentage Presentation on Themes Governing Ideology in Post-Paris era

Figure 11: Percentage Presentation of Themes Aid Ineffectiveness

Figure 12: A Pictorial Illustration of Aid Evaporation under Stage 1

Figure 13: Percentage in Presentation of Themes on Aid Evaporation under Stage 2

Figure 14: A Modified Pictorial Illustration of How Aid Evaporation Occurred under Stage 1 & 2

Figure 15: Percentage Presentation of Themes Aid Evaporation in CAADP: Stage 2

Figure 16: Presentation in Percentages on Contribution of ODA

Figure 17: Evolution of Aid Evaporation Concept, Pillars and Enablers.

Figure 18: Pictorial Illustration of the PPAEDEF The Pyramid

Figure 19: Proposed Framework for Post-Paris ODA Delivery Mechanism

Figure 20: The Post Paris Aid Evaporation Detection Barometer 2017: "The Barometer

LIST OF TABLES

Table 1: Top ODA Receipts in US $ Net Disbursements, 2014 (billion)

Table 2: Dimensions and Scope of Research

Table 3: Summary Consolidated Matrix on Mechanisms and Frameworks

Table 4: Summary Consolidated Matrix on Ideology in Pre-Paris Era

Table 5: Summary Consolidated Themes on Ideology in Post-Paris era

Table 6: Summary Consolidated Matrix on Themes on Aid Ineffectiveness

Table 7: Summary Consolidated Themes on Reasons behind Stage 2 Aid Evaporation

Table 8: Summary Consolidated Themes on Aid Evaporation in CAADP

Table 9: Summary Consolidated Findings on Contribution of ODA

Table 12: Pages Translated 1July-30 November 2014 by DCMP of AUC

ABSTRACT

Despite the adoption of the Paris declaration in 2005, the challenge of aid ineffectiveness persists while the underlying problems are neither addressed nor captured in orthodox literature. Subsequently, billions of dollars from Overseas Development Assistance (ODA) channeled through bilateral and multilateral channels to Africa have not delivered significant results 50 years on. This generated global concern and led to the adoption of the Paris declaration on Aid Effectiveness at the High-Level Panel on Aid Effectiveness held in 2005. The problem is that ODA seems to dissipate in the process of disbursement, thereby making it unaccounted for and thus ineffective. The existing narrative attributed ODA inefficiencies to demand side (recipient) factors and ignored supply side (donor) inefficiencies. The root of the problem is however associated with supply side challenges. The purpose of the study was to understand, define, conceptualize, and make theoretical and practical contributions to, the issue. While drawing global attention to the undermining nature of this phenomenon, the study relied on the governance theory to examine the problem within the aid ineffectiveness discourse and the context of the Paris Declaration. The study used a mixed method approach with a qualitative methodology bias to investigate the phenomenon by examining key ODA parameters identified in the research questions, namely ODA governance frameworks, mechanism and ideology, unpacking of aid ineffectiveness, exploring the existence of the aid evaporation in ODA packages as well as identifying the positive and negative contributions of ODA. It interviewed a wide cross section of stakeholders at an international, continental, regional, and national level. Key findings revealed that the prevailing perception that aid ineffectiveness was a demand side problem was only part of the story because supply side challenges were probably more responsible for billions of ODA that could not be accounted for. It has recommended the re-writing of the narrative that ODA ineffectiveness is predominantly premised on demand side to reflect the supply side buggage. Findings showed that while there were indeed demand side challenges such as bad governance, corruption and lack of strong institutions, there were also supply (donor) side challenges such as over-reliance of donors own ODA governance frameworks and ODA delivery mechanisms, the entrenchment of bilateral interest in ODA and geo- political interest. In this regard, the study confirmed that the 62% of the ODA that could not be accounted for accordidng to literature was either held up or evaporates from the supply side. This finding brought clarity on the matter and corroborated with existing literature on the mistery of unaccounted ODA. While the notion of aid evaporation emerged as an attribution and part of a reflection on the problem of ODA dissipation at the preliminary stage of the literature review; it became the central issue of focus throughout the research investigation which involved substantive field work to bring clarity on the problem and hence resulting in its being labelled as the Aid Evaporation Notion. The study has made theoretical and practical contribution, firstly by acknowledging that the five existing concepts governing ODA namely the southern political system, national do-gooder’s regime, strategic communication regime, national corporationativism and elite circulation are silent on the aid evaporation phenomenon, It also contributed through introducing the Supply Baggage Concept, calling for a shift in the predominant narrative that attributes ODA failure to the demand (recipient) side. Such a shift is informed by factors unpacked by the study that included breeders and enablers of the aid evaporation phenomenon. Subsequently, it has proposed that the new concept specifically addresses the phenomenon and that the Supply Baggage Concept be considered as the sixth ODA governance concept. The new concept shall inform the proposed aid evaporation detection framework comprising the Post Paris Aid Evaporation Detection Framework (PPAEDEF) the Pyramid, the Post Paris Aid Evaporation Detection Barometer (PPAEDEB) the Barometer, and the Post Paris ODA Delivery Mechanism (PPODEM) the Mechanism. In practical terms, the study calls for re- arranging the current ODA delivery mechanism to disaggregate ODA for program implementation from ODA for technical assistance through the (PPODEM) or the Mechanism. The study also recommends, among other things, the introduction of an ODA Clearing House in ODA management at the national level.

FOREWORD

I am delighted to foreword this edition entitled AID EVAPORATION Dynamics of Supply Side Forces in Overseas Development Assistance (ODA): Confronting the Global Aid Governance Architecture from a Pan African Perspective, authored by Dr. Litha Musyimi-Ogana.

I am particularly motivated by the title of the book, which has been inspired by this new notion on Aid Evaporation’. After extensive research on the subject and as part of fulfillment of her PhD studies at the University of Witwatersrand, in South Africa Dr. Musyimi-Ogana succeesfully defended the Notion on Aid Evaporation" after spending considerable time interrogating the notion, which makes her an authority on the subject.

Approaching it from a Pan Afrucan perspective, she interrogated ODA delivery mechanisms, processes, ideology and Development approaches and engaged extensively with existing literature on ODA from a historical, ideological, intellectual, theoretical and geopolitical dimension on the ODA architecture from a global, Regional, Sub- Regional, National and Local level.

Using a mixed method research design she went on to gather empirical evidence from global to local level, engaging quantitative and qualitative tools whose findings are well tabulated and analyzed in Chapter 5 and thouroghly discussed in Chapter 6. Furthermore she went ahead to demonstrate through a Case Study based on an ODA project using Masinga Dam Project in Kenya, how ODA can negatively or positively impact on a community’s agricultural life using Riakanau Village in Embu County. This case study amplified the impact of an ODA project on Agricultural production in general and particularly on the implementation of the Comprehensive African Agricultural Development Program (CAADP), championed by the New Partnership for Africa’s Development (NEPAD)

Having served as Kenya’s Minister of Planning and National Development when the CAADP framework as well as the African Peer Review Mechanism (APRM) were adopted by the African Union Heads of States and Government in Maputo, Mozambique, in 2003, I can confirm that I know the expectations our memberstates had on both Framweworks and that I particularly liked the discussion on the performance of both Framweworks in Chapter 6. This book attribute the better performance of the APR Mechanism to its Pan Africanist approach in solving serious governance challenges using African solutions and has isolated elements such as its African ideology, ownership, practicability as well as lack of interference by ODA proponents.

I totally agree with the findings in chapter 7 and the conclusion which clearly highlights supply side baggage in ODA packages as a major contributer to the notion of Aid Evaporation and the need to factor in the proposed concept of ‘Supply side Baggage’ elements in the ODA delivery Ecosystem if we are to eliminate Aid Evaporation from ODA packages and save it from evaporating through supply side interests, demand side challenges and side shows.

This book is a good read from an intellectual, developmental as well as geopolitical perspective and I strongly recommend it for reading to all Development partners and recepients of ODA, Multilateral and Bilateral agencies, United Nations Agencies, African Union Organs, researchers and a must publication for all our Academic institutions and Universities as it definitely contributes to the existing body of knowledge on Development Aid

Highly recommended,

HE Prof. Peter Anyang Nyong’o

The Governor, Kisumu County

Republic of Kenya

DEDICATION

I dedicate this Book to my late parents Stephen and Tabitha Musyimi Kisilu on the occasion of Dad’s Centennial commemoration, for bequeathing us and our children a timeless heritage encapsulated in human values informed by good education, family values, community service, Christian faith and economic empowerment through hard work which I share with my siblings David (late), Kim, Mutava, John, Rahab, Zippy, Isabella and in turn, bequeath to my children Janet, Silava and Victor for inspiring me to take my sabbatical to study and for accompanying me in my long journey as I combined studying with each one of them at different stages of their education curve, while also pursuing my professional career, balancing parenting and a busy working life characterized by heavy workload and travel.

ACKNOWLEDGEMENTS

I wish to acknowledge special people both in my academic and non-academic life including my supervisors, colleagues, comrades, friends and family who played a role in motivating me to embark on my PhD and to soldier on at difficult times in my academic journey, and their faith in my capacity and ability to undertake this study despite my overwhelming responsibilities.

I wish to first acknowledge the people who inspired me to persue a PhD whose research generated material for this publication. Their support through a combination of persuasion, belief and written affirmation convinced me to venture into academia. They include Professor Jaheed Mohamed, Prof. Okey Onyejekwe, Ambassador Dr. Monika Juma, Dr. Esther Njiru and Dr. Akinyi Nzioki who authored the testimonials that accompanied my PhD application. Many thanks to my PhD Supervisors namely Professor Jaheed, Dr. Horacio Zandamela and Prof. Pundy Pillay and Panel member of the Wits academic panels who sat through my defence panels at different stages especially for their critique and the interest they demonstrated in my thesis which came up with a new notion on Aid Evaporaation. Their interest in my topic and commitment to academic excellence raised the quality of the discouse on the notion and encouraged me to publish my thesis. They include Prof Gillian, Professor Pundy, Prof. Anne, Dr. Lynn, Dr. Johnny Mashabaphala, Dr. Diran, Dr. Kabadima, Prof Patrick Bond, Dr. McLean as well as Dr. Emmanuel. I will be forever grateful to Dr. Mashabaphala who chaired my final Pre-Sunmission Defence Panel and my principle supervisor Dr. Horacio who stood by me up to the end. I wish to also acknowledge support from my colleagues at Wits with special mention of Dr. Angelita, Noreen Wahome and Nasreen Abdullah for their unwavering support.

I wish to acknowledge my friends in the African Union family and particularly thank HE Dr. Nkosazana Dlamini and H.E Mr. Erastus Mwencha the former Chairperson and Deputy Chairperson of the African Union Commission, for granting me sabbatical to persue my PhD as well as H.E. Dr. Mayaki the CEO of the African Union Development Agency-NEPAD for facilitating my secondment in South Africa to help me complete my studies. My gratitude also goes to my fellow Directors at the AU Commission, AU Commissioners and AU Staff through the Chief of Staff as well as my staff at AU-Women, Gender and Development Directorate (WGDD) particularly Emebet my PA, Jeanne, Simone, Fifie, Rael, Zemen, Beyene. I cannot forget staff at the Pan African Parliament, the African Development Agency-NEPAD, African Peer Review Mechanism and of the Regional Economic Communities (RECs), particularly the staff that I interviewed.

I wish to acknowledge the peer review team constisting Prof. Kalil Timamy, Dr. Ulrich Erhardt and HRH Kgosi Pilane for generously sharing their views and experience in development work during my study. Special Acknowledgement goes to Josephine Love of Ministry of Agriculture and Livestock in Kenya as well as Isabella Ndolo my Chief of Staff for coordinating all my respondents from NEPAD Kenya particulary in Riakanau village residence. Without the overwhelming support I got from family members, both the PhD research in Kenya and publishing this book would have been a nightmare. In this regard, I wish to acknowledge the logistical support at all levels from my family including my sisters Rahab, Zippy and Isabella, and brothers Kim, Hon. Mutava, John and my sisters-in-law Nyambura and Naumi. My children Janet, Silava and Victor have endured the sacrifices associated with my student life and need special recognision especially myson Victor who stepped in me with his IT skills whenever I got stuck.

I cannot complete my list before acknowledging my special friend, HE Dr. Joyce Banda, Former President of Malawi for her moral support.

Last but not the least, I am extremely grateful to His Excellency Professor Anyang’ Nyong’o for agreeing to forward my book. Prof. Nyong’o is guru in governance, renown scholar and one of the most respected Governors in Kenya.

To all those mentioned and many more that I have not mentioned,

I say,

Asanteni Sana

Dr. Litha Musyimi-Ogana

LIST OF ABBREVIATIONS

CHAPTER ONE

INTRODUCTION TO OVERSEAS DEVELOPMENT ASSISTANCE (ODA)

1.1 INTRODUCTION

Aid Ineffectiveness is one of the main challenges facing Overseas Development Assistance (ODA) in general and specifically in the African continent despite the adoption of the Paris Declaration in 2005 (Moyo, 2009; Organization for Economic Co-operation and Development, 2005; Ovaska, 2003; Park, 2019). The main issue is that ODA flows to Africa for over 50 years have not had commensurate results even with increasing ODA flows to the Continent according to Moyo (2009). The Organization for Economic Co-operation and Development (2005) report identified five principles that needed to be addressed to solve the problem namely: lack of ownership, alignment, harmonization, managing for results and mutual accountability. However, despite adherence to the five principles, by 2012, not much progress had been made in overcoming the challenge according to Park (2019) while Ovaska (2003) study questioned the whole aid efficacy. The generic problem is that ODA has been dissipating due to an underlying problem which had been undermining ODA effectiveness. This study was designed to find out the reasons leading to the persistent dissipation of ODA and recommend ways to address the challenge, attributed to aid evaporation phenomena.

This objective of the study, was to explore the challenge of aid evaporation in overseas Development Assistance (ODA). The phenomena seemed to dissipate aid by either consuming it in the process of its disbursement or absorbing it within the system. Aid evaporation was viewed to encapsulate all aid dissipating factors including aid wastage, disappearance, misappropriation and pilferage among others. Although these ODA dissipating factors individually contributed to the aid evaporation phenomena, none of them alone can be held responsible for aid ineffectiveness. Moreover, the terminologies used to date to describe the problem were associated with demand side challenges, ignoring the supply side generated challenges. The term aid evaporation was conceived to encapsulate all aid dissipating factors on both sides of the ODA equation and to specifically create discomfort on the supply side challenges while generating curiosity for the immediate attention of problem by the aid industry. Given that the existing narrative attributed ODA inefficiencies to demand side (recipient) factors and ignored supply side (donor) inefficiencies, the study went beyond the existing narrative to investigate supply side challenges.

The main concern of this study was that despite the adoption of the Paris Declaration on aid effectiveness, ODA continued to be ineffective. (Nawaz Khalid Mehmood and Zahra, 2012), Overall results from a study across 86 countries covering a 23 year period indicated that the notion that ODA helped developing countries achieve higher growth trajectories was not entirely true (Ovaska, 2003). The underlying reasons to the problem of aid ineffectiveness had neither been captured in orthodox literature nor been candidly presented to cause discomfort to donors.

According to Sharife (2009), development aid that cannot be accounted for is estimated at US$20- 28 billion or 62% of total ODA disbursements some of which is stashed by the African elite in offshore accounts while 58% of tied aid was held by the donor country for purchases of goods including HIV and AIDS drugs as well as food aid. An average of US$1.8 billion was further coated in foreign policy according to Moyo (2009). On the other hand, Kharas (2007) highlighted the huge gap between ODA disbursement by the World Bank and actual ODA received by countries under their Country Assistance Programs which he estimated as 62%. While Moyo (2009) refered to ODA as dead aid for its failure to account, the paradox between billions of ODA committed to Africa and lack of visible results to match them remained a contradiction. This study highlighted how the aid evaporation phenomenon dissipated funds designated for development and welfare by either consuming it on the supply side, retaining it in the system, or benefiting non-core processes once disbursed such as consultants, advocacy experts, media companies, logistic experts, researchers, technical assistants, the hotel industry, and travel companies among others. Unlocking aid from this quagmire where aid acts as driver of processes rather than a driver of development requires a scholarly discourse to address the aid dissipation phenomenon. This discourse required the generation of new knowledge to inform a policy regime that can go beyond the Paris Declaration prescriptions on aid ineffectiveness.

To understand the aid architecture within which ODA is generated, managed and channeled, one first needs to appreciate the economic development discourse within which aid is defined, conceptualized and delivered. Although ODA has not achieved its full potential in promoting development in developing countries, development aid in general and ODA can indeed contribute to income growth and minimize income inequalities. Aid can also contribute to the achievement of non-income benefits such as improved education, health, environmental sustainability, good governance, democratization, gender equality and equal access to global public goods (United Nations Development Program, 2015) (Kelly, 2008; Office of Vice President & Ministry of Planning and National Development, 1999; United Nations Development Program, 2011, 2015).

The African continent has been a major recipient of development aid (Department of Foregn and International Development, 2005; Dichter, 2003; Economic Commission for Africa/Organization for Economic Co-operation and Development, 2009; Gleneagles, 2005; Kharas, 2007). According to Economic Commission for Africa/Organization for Economic Co-operation and Development (2009), the volume of ODA to Sub-Saharan Africa almost doubled in the last 15 years, increasing from $18.9 billion in 2002 to $34.2 billion per annum in 2007 and rose to $47.6 billion by 2009. However, despite the increase in ODA flow to Africa, most ODA never reached the intended destination (Dichter, 2003; Kharas, 2007; Van der Aa, 2007). The dramatic increase in quantity of aid to Africa since the turn of the millennium was due to global advocacy through combined efforts of the United Nations, multi-lateral and bilateral development partners, the international community and African stakeholders (Department of Foregn and International Development, 2005; United Nations Department of Economic and Social Affairs, 2000, 2002a). Despite increasing ODA, its ineffectiveness remained a major concern and led to the adoption of the Paris Declaration in 2005.

The Paris Declaration is a non-binding commitment adopted at a High-Level Forum in Paris on March 2, 2005 which agreed for the first time to confront aid ineffectiveness in ODA. The Declaration adopted a set of 56 commitments to make aid more effective, culminating in five principles namely Alignment, Coherence, Harmonization, Mutual Accountability and Managing Results (Organization for Economic Co-operation and Development, 2005). Despite the adoption of the Paris principles and the Declaration, challenges addressed in the declaration still persist (Deutscher and Fyson, 2008; Nawaz Khalid Mehmood and Zahra, 2012). They include fragmentation and predictability; for example, between 2005-2006, 38 developing countries received ODA from 25 DAC and Multilateral donors in which about 24 of those countries received less than 10% of the country’s total aid. Deutscher and Fyson (2008) further lamented that only 45% of ODA arrived on time, posing yet another challenge regarding predictability.

Despite fourteen years of implementation of the Paris Declaration on Aid effectiveness (2005- 2019), the international community is yet to show the benefits derived from improved aid performance in the post-Paris era. The full conceptualization of aid ineffectiveness and introduction of the new notion of aid evaporation by this study is the first step in firstly acknowledging ODA dissipation as a problem and secondly, putting pressure on development partners and ODA stakeholders as regards their complacency on aid ineffectiveness since the Paris Declaration was adopted. It aims to draw global attention to the undermining nature in which ODA seems to dissipate or evaporate on the supply side.

Furthermore, ODA has been predominantly financing inputs rather than outputs (Lancaster, 2007, 2009). This has been characterized by funding processes and sideshows as opposed to financing outputs that would be demonstrated through the implementation of desired programs and projects designed to benefit developing countries (Lancaster, 2007, 2009; Werker, 2012). Subsequently, billions of dollars channeled through ODA to Africa have not delivered significant results, and this has generated global concern leading to the adoption of the Paris Principles of Aid Effectiveness at the High-Level Panel on Aid Effectiveness Held in Paris in 2005 which adopted the Paris Declaration on Aid Effectiveness.

The study highlights this phenomenon as a key driver of aid effectiveness within contextual framework of the Paris Declaration. The study investigated the phenomenon of aid evaporation at the literature review level to inform the preliminary understanding of its existence and substantively through field research to better understand and fully conceptualize the notion.

This peculiar characteristic of aid dissipation is embedded in the ODA infrastructure and is difficult to pinpoint, trace and isolate without overhauling the ODA disbursement architecture. This problem was perceived to be a key driver of aid ineffectiveness leading to the investigation of the problem under study. The purpose of the research, therefore, was to understand the problem responsible for aid ineffectiveness in ODA in general and in particular to understand, define, conceptualize the phenomena of aid dissipation, herein referred to as aid evaporation.

The study used a mixed method approach with a qualitative methodology bias to investigate the phenomenon by examining key ODA parameters identified in the research questions, namely ODA governance frameworks, mechanism and ideology, unpacking of aid ineffectiveness, exploring the existence of the aid evaporation in ODA packages as well as identifying the positive and negative contributions of ODA. Key findings revealed that the prevailing perception that aid ineffectiveness was a demand side problem was only part of the story because supply side challenges were probably more responsible for billions of ODA that could not be accounted for. Findings highlighted that while there were indeed demand side challenges including corruption, mismanagements, lack of ownership and apathy, supply side challenges were equally significant. The study made a theoretical and practical contribution, firstly by acknowledging that the five existing concepts on governing ODA namely the southern political system, national do-gooder’s regime, strategic communication regime, national corporationativism and elite circulation were silent on the supply side generated challenges. It has made contribution by coming up with a new concept specifically to address the aid evaporation phenomenon and proposed that the Supply Baggage Concept be considered as the sixth ODA governance concept. It recommended the re-writing of the narrative that ODA ineffectiveness is predominantly premised on demand side to reflect the supply side baggage and also recommended,