New review – The changing nature of UK aid in Ghana

12 Feb 2020

• UK aid spending in Ghana awarded overall green-amber score by Independent Commission for Aid Impact, but with amber-red for sustainability.
• Aid watchdog’s first country portfolio review found that the UK’s support since 2011 had been “mostly effective” in helping some of the poorest and most vulnerable.
• But it warned that as Ghana moves beyond aid, the progress made so far in the health and social sectors may not be sustained if the UK scales back its financial support too quickly.

UK aid has been “mostly effective” at helping some of the poorest and most vulnerable in Ghana – but as the country works to become less reliant on aid, the UK should take care not to scale back its financial support too quickly, a new report from the Independent Commission for Aid Impact (ICAI) has warned.

The review, the first by the independent aid watchdog to examine a country’s entire aid portfolio in depth and with feedback from more than 800 Ghanaian citizens included, looks at how the UK government’s support for Ghana is changing. Although still affected by significant poverty and inequality, Ghana is working to move “beyond aid” after moving up from the lowest-income category of countries. In response, the UK has reduced the funding it gives directly through government channels, instead providing technical support and funding through other organisations with the aim of helping Ghana drive its own development.

But ICAI found that decisions on where to cut the UK’s funding – amounting to £2.8billion in bilateral aid between 1998 and 2017 – were not always based on a sound analysis of the impact it would have, particularly in social sectors such as health or education, creating a risk that the strong results previously achieved might not be sustained.

ICAI made six recommendations for how the UK can improve, awarding an overall score of green-amber but with an amber-red for sustainability.

ICAI chief commissioner Tamsyn Barton said: “UK aid has made a real difference in the areas that the people of Ghana say matter to them – such as getting support to improve their livelihoods and ensuring out-of-school children receive an education.

“But Ghana’s aim of becoming self-reliant brings unique challenges – not least in making sure the progress made so far can be sustained long-term, and that no one is left behind in a country where poverty and inequality continue.

“We’re concerned that the UK is winding down its government funding too quickly, without fully considering the impact and without making sure that other donors or existing organisations in Ghana are able to support the government to provide comparable public services. This risks reversing the good results that have been achieved over the past 10 years.”

Ghana was the first African country to meet the Millennium Development Goal of halving extreme poverty by 2015, and the discovery of oil in 2007 fuelled the country’s development, but unstable economic conditions in recent years mean that growth has stalled, and inequality has widened.

Despite concerns that the Department for International Development (DFID) had not been fully clear about the overall outcomes it wanted to achieve, ICAI found that UK aid between 2011 and 2019 had often made important contributions to Ghana’s development, with progress particularly strong in the social sectors. Researchers highlighted how the UK had helped 200,000 children from hard-to-reach communities to go to school, and more than 100,000 patients to access mental health services.

But ICAI also found that it was in those sectors that the pace of funding reductions could put progress and sustainability at risk. It said there was no convincing evidence that decisions on where to reduce aid were based on an analysis of needs, sustainability or existing capacities, and citizens were not systemically consulted. In some cases, DFID’s focus on results meant it provided services directly to citizens independently of the state, in order to reach more people, rather than supporting Ghana’s own public institutions to deliver them sustainably for the long-term.

ICAI acknowledged that the UK’s current approach – reducing bilateral funding to the Ghanaian government to deliver public services, and instead providing technical support through a wider range of government departments and increasingly channelling finance through multilateral partners such as the World Bank and IMF – was in line with both Ghana’s priorities, and the UK’s shift towards a “mutual prosperity” approach, economic partnerships in which both sides benefit.

However, ICAI found that the UK was not maximising its influence over the programmes being delivered by multilateral partners, and warned that the UK’s shift to a new economic partnership built around mutual prosperity needs to be guided by clear rules to ensure that the primary goal of poverty reduction is not lost.

The report made six recommendations:

• In transition contexts, DFID should ensure that the pace of ending the bilateral financing of service delivery in areas of continuing social need must be grounded in a realistic assessment of whether the gap left will be filled;
• DFID should require portfolio-level development outcome objectives and results frameworks for its country programmes;
• DFID Ghana should learn from its own successes and failures when designing and delivering its systems strengthening support and technical assistance;
• In transition contexts, DFID country offices should increasingly work to influence the department’s country multilateral partners on issues of strategic importance;
• DFID should include information on citizen needs and preferences as a systematic requirement for portfolio and programme design and management;
• The government should provide clear guidance on how UK aid resources should be used in implementing mutual prosperity objectives.

ICAI, the UK’s aid watchdog, is responsible for ensuring UK aid is spent effectively for those who need it most while delivering value for money for taxpayers. ICAI’s research for this report included a review of government documents; mapping of all bilateral and multilateral UK aid flows and results; stakeholder consultations with representatives from across Ghana’s regional and national government, civil society organisations, media, academics and businesses; and consultation with citizens.

Find out more here.