Searching for the nexus: It’s all about the money

‘There’s still a contradiction between what the donors signed up to and what they’re doing on the ground.’

Searching for the nexus

It’s a lot easier to deliver blankets and food aid to a warzone than it is to build roads or set up new justice systems. But what if the highways and courts help resolve the war and lead to fewer emergency needs in the longer term?

At a glance: Key points

  • Donors are rethinking at least $60 billion in annual aid spending.
  • Joining up development, humanitarian, and peace spending should have more impact in the long run.
  • Some examples of the new nexus approach are already underway, involving hundreds of millions of dollars.
  • Donors have to reorganise themselves to implement the nexus.
  • Aid agencies also need to redesign their proposals to donors to move beyond short-term programming.
  • So far, the rhetoric is well ahead of reality as risk looms large.

That’s the theory behind the triple nexus – a proposed closer collaboration between the humanitarian, development, and peacebuilding aid sectors.

But amid doubts around how to turn plausible theory into doable practice, the biggest barrier of all could be money – both the amount, and the way it’s spent.

In this, part four of our deep dive into aid’s new meta-policy, we take a look at the role of donors within the nexus and ask what has changed – or still needs to – in terms of funding.

Where are we now?

Current funding methods entrench “development” and “humanitarian” silos, planned and spent separately, typically through different agencies and channels.

Since the nexus began gathering steam at the World Humanitarian Summit in 2016, there has been a rash of high-level commitments to change this approach.

However, a series of interviews with experts and aid workers – as well as studies consulted in the course of compiling this special report – suggest donors remain too risk-averse to put their money where their mouth is.

And while some cash-strapped humanitarian relief agencies are hoping the nexus can unlock the generous budgets of development aid for crisis needs (the World Bank has begun humanitarian funding, for example), it isn’t that simple.

The nexus aims to satisfy emergency needs at the same time as fixing things for the long term: not just different spending priorities, but killing two – or three – birds with one stone.

A project in Bangladesh that provides cooking gas to a refugee camp at the same time as planting trees to replace firewood in the surrounding area. A $100 million fund for providing social services and work opportunities in areas destabilised by Boko Haram in West Africa. Multi-year grants that allow a project to change direction, for example if a drought sabotages an agriculture programme.

These real but still isolated examples may sound useful – but is the commitment really there to deliver this approach sector-wide?

Not everyone is so sure.

Take Matthew Scott, who runs an initiative for World Vision International focused on how aid is delivered to fragile contexts, where public services, peace, the environment or government may be weak or unstable.

“I've been to many international conferences on the nexus in the last two years where everyone talks about more flexible financing, joined-up programming, context analysis, and all the other principles,” Scott told The New Humanitarian. “The policy commitments are there, but the funding behaviour hasn't yet caught up.

“With very few exceptions, institutional donors are still throwing silos of funding at the problem,” he said. “So even though our paradigms, frameworks, commitments, and our guidance say ‘get rid of the silos and work in an integrated way’, funding is still going out the door in these very stove-piped ways.”

Read more → Tipping points 2019 | Lessons from fragility

Leah Zamore, director of the humanitarian crises programme at New York University’s Center on International Cooperation, said there had been “several notable shifts” in terms of funding flows, but "these have not yet added up to a game-changer on the ground".

And Fie Lauritzen, senior humanitarian policy advisor at Danish NGO DanChurchAid, told TNH: “The opportunities for nexus approaches in a protracted crisis setting are significant and we need more appetite for risk from donors. There’s still a contradiction between what the donors signed up to and what they’re doing on the ground.”

Why does funding need to change?

Figures from the Organisation for Economic Co-operation and Development (OECD) show that Official Development Assistance (ODA) from its 30 members – the world’s top donors – shrank by 2.7 percent last year, compared to 2017, to $149 billion.

OECD Secretary-General Ángel Gurría described the “picture of stagnating public aid” as “particularly worrying” and warned that it “bodes badly for us being able to achieve the 2030 Sustainable Development Goals”.

This figure for mainstream aid includes major state funds but excludes individual remittances, most non-governmental operations, and faith-based help. Only about a tenth of the 2018 total went towards humanitarian needs.

Humanitarian caseloads are growing, thanks to an increase in climate-related disasters such as flooding and drought, as well as lengthy conflicts, like in Syria, Yemen, and Afghanistan.

Despite increasing emergency needs and ambitious international goals for development progress, the cake isn’t growing. Doing more with less (or the same) is one of the key drivers behind the nexus.

In 2018, more than 200 million people were in need of humanitarian assistance and UN-coordinated appeals rose for the third consecutive year, reaching a new high of $28.1 billion.

Although funding committed for these appeals reached record levels of $17 billion, this still left a significant shortfall, forcing budget and programming cuts.

Who’s ‘doing the nexus’?

The nexus – a policy now enjoying wide consensus – followed reform discussions including the UN’s High Level Panel on Humanitarian Finance, the World Humanitarian Summit, and the subsequent so-called Grand Bargain.

In February, members of the OECD’s Development Assistance Committee (DAC) – the world’s leading donors – adopted a “Recommendation on the Humanitarian-Development-Peace Nexus”.

This mandated signatories to “incentivise and implement more collaborative and complementary humanitarian, development and peace actions, particularly in fragile and conflict-affected situations”.

In plainer English, this means donors must take a broader look at how they fund humanitarian, development, and peacebuilding initiatives, and be more flexible.

They shouldn’t for example, just pour money into emergency response when longer-term projects, such as education programmes, new infrastructure, or social cohesion work may have the potential to reduce tensions and ultimately need.

According to the DAC recommendation, donors should be using “predictable, flexible, multi-year financing” in order to give field-based staff more control and allow them to redeploy funds as new circumstances and opportunities arise.

For example, a nutrition programme could be scaled up amid a sudden food shortage or rising malnutrition rates.

To decide where money could best be spent, DAC also recommends more joint analysis by development, peace, and humanitarian teams to try to understand, and tackle, root causes.

The OECD policy states that funding should be focused on achieving “collective outcomes”, meaning shared among various players in the aid ecosystem.

One example: multiple aid agencies and donors agreed to design a range of projects towards reducing the number of people facing food insecurity in Chad by 32 percent. Further examples of early moves towards collective outcomes can be seen here.

“Prevention always, development wherever possible, humanitarian action when necessary”.

While noting the need for flexible pooled funds and “forward-looking” humanitarian funding, Zamore sees coherence, especially from national governments, as being at the centre of a successful nexus approach.

“Donors can help strengthen the capacities of national actors to develop and oversee comprehensive response and recovery strategies,” she explained.

“They can provide greater support to national public education, health, and social protection systems that incorporate refugees or internally displaced persons, rather than funding ad hoc and generally unsustainable parallel systems.”

So what has actually changed on the policy front?

The February DAC document – a legal instrument on which signatories will be held to account through peer review and other internal processes – was a major milestone for the nexus, and, according to Rachel Scott, OECD head of crisis and fragility, it has created “a lot of traction” among donors.

“Things are starting to happen,” she told TNH. “I think people have accepted that fragility and crisis are interlinked problems, that you need different sets of actors working more coherently to be able to address the problem, and that no one set of actors can do it alone.”

Scott summarised the policy: “Prevention always, development wherever possible, humanitarian action when necessary”.

For Scott, it is time to reassess humanitarian and development spending and allow humanitarians “to get back to their comparative advantages and work as humanitarians”.

Emergency responders should not be doing the “stretching” they are doing at the moment, such as health system strengthening and other more development-style work, she said.

There is, however, still some distance to go in translating theory into practice.

Members of the International Network on Conflict and Fragility (INCAF) – a subsidiary body of the DAC that also comprises UN agencies and multilateral lenders like the World Bank – are collectively working on a “theory of change” framework to “set out what success looks like” under the nexus.

There are also plans for donors to designate specific countries as key nexus targets.

OECD’s Scott said this and the theory of change would help to “give clarity and demystify the nexus” in terms of programming, financing, and coordination, and that once target countries were identified, there would be “a lot more activity on the ground”.

So far that has been lacking, according to UK-based research NGO Development Initiatives (DI), which has been analysing the different ways in which the UK’s Department for International Development (DFID) and the Swedish International Development Cooperation Agency (Sida) are approaching the nexus.

“For many donors, funding and financing approaches to the nexus are still catching up with the policy agenda,” noted Sarah Dalrymple, a senior policy and engagement advisor at DI.

DI’s research, due to be published this month, notes that both donors – whose aid contributions in 2018 were $19.4 billion and $5.8 billion respectively – have been “early proactive and committed champions of resilience approaches” and have “increased their strategic focus on engaging in fragile contexts”.

Notable developments within Sida and DFID observed by DI included: resilience funds for less pressing humanitarian contexts where development actors were not present; the hiring and placement of multi-disciplinary teams at country level; new flexibility within budgets to allow contextual changes; and new checklists to prompt teams to do more joined-up assessments and programming.

However, the study said “developing operational guidance on the nexus is a critical step for transforming this agenda into action”, and it suggested there was a need to “strengthen programming tools for exiting crisis into recovery and peacebuilding”.

A DFID spokesperson told TNH it spends at least 50 percent of its budget in fragile and conflict-affected states and that “it had developed a wide range of programmes focused on building stability”.

One example of nexus-type DFID programming is an initiative to build resilience and adaptation to climate extremes, known as BRACED. The DFID official said it had “helped improve the resilience of more than five million people across the Sahel, East Africa, and Asia, and assisted 14 countries or institutions improve their approaches to tackling climate extremes”.

READ MORE →

The nexus in action: What one donor is doing

The Swedish International Development Cooperation Agency, known as Sida, says it has redesigned its strategy and planning processes around humanitarian and longer-term development and peacebuilding efforts to ensure more joint project preparation.

Göran Holmqvist, the agency’s head of department for Asia, Middle East and Humanitarian Assistance, told TNH it had also “substantially increased staffing with competency profiles and mandates that span over both humanitarian and long-term development”.

Holmqvist noted that having the right staff on the ground is “a key factor in making the nexus work”.

Examples of some of the agency’s nexus-style approaches include:

  • After the Mozambique cyclones, Sida money paid for humanitarian response as well as immediate planning for longer-term reconstruction needs.
  • A Sida-funded peace and health committees programme in the Tanganyika province of the DRC has reduced tensions between Twa and Bantu communities, and the increased stability has allowed the restoration of health services and increased their accessibility.
  • In Bangladesh, where refugees cooking with firewood is a major environmental issue and also a source of conflict with the host population, a joint humanitarian and development intervention has converted one million people from firewood to gas and begun a reforestation project. This has reduced pollution and deforestation, created jobs, and decreased tensions between refugees and host populations.

A separate independent evaluation of how the Swiss Agency for Development and Cooperation (SDC) was linking its humanitarian and development aid noted how the organisation was starting to apply a more coherent approach in the Horn of Africa.

The review, by the Denmark-based Nordic Consulting Group, praised the agency for its “job rotation principle”, which it said “was particularly conducive to working in the nexus” because it equipped staff with a wide range of skills and experiences to work in both humanitarian and development response. But it also urged more internal communication and coordination in relation to the nexus.

Nonetheless, for all the positive accounts given by donors themselves about what they are doing to “operationalise the nexus”, NGOs on the ground say there is still a perceived reluctance to fund longer-term and peacebuilding programmes in areas where there is instability.

Measuring the difference

Given the time it takes for the official data to be compiled, it’s too early to see a major change in funding flows since the gradual acceptance of the nexus principle.

The OECD and DI do suggest some indicators to watch: the volume and breakdown of ODA to “fragile” states; or whether total aid drops after a crisis begins.

According to OECD data on aid in 58 fragile states, humanitarian aid almost doubled in value from 2010 to 2017. But money for development and peacebuilding, the other two legs of the triple nexus, remained relatively flat in those countries.

A mapping of aid flows to 27 countries during the first five years of a crisis shows ODA falling sharply in the years following a crisis. Although emergency aid rose, it was not enough to compensate for the fall in developmental ODA, leaving the country short when it was most in need.

According to Dalrymple of DI, with some exceptions, the “new rhetoric” isn’t being matched by funding flows.

What is holding back reform?

Political factors can limit nexus ambitions, according to Göran Holmqvist, head of Department for Asia, Middle East and Humanitarian Assistance at Sida.

He gave the example of Syria, “where political realities are such that the long-term development cooperation largely stays away from engagement”, referring to donor governments not wishing to invest in infrastructure because this could help – or be seen to help – a regime they regard as an unacceptable partner.

In some countries, it is politically unfeasible to allow refugees to work, which makes it harder for aid agencies to seek to integrate refugees into the local economy, Holmqvist added.

A lack of risk appetite from development actors was another factor commonly cited by interviewees as a barrier to implementing the nexus.

Referring to a recent DanChurchAid report on the impact of the triple nexus in South Sudan, Lauritzen said: “There is very little appetite among donors to fund development activities because of the conflict situation, even though there are plenty of pockets where there is no active conflict and much need for longer-term projects.”

OECD’s Scott believes that risk tolerance on the development side requires having the right staff working out in the field.

“You need someone who is willing to be on the ground in a remote corner of somewhere like Central African Republic (CAR) for up to three years to hold the hand of the local authorities to get projects done,” she said.

“These are not attractive posts and it can be complicated to get the right people in the right places and working in the right way. It’s about institutional set-up. It’s not just about getting money out.”

Donors are starting to change the way they staff country offices (see Box 1).

Dalrymple also pointed out that separate humanitarian, development, and peacebuilding programmes had “given way to diverging mindsets, which undermined opportunities for joined-up working”.

“It’s about breaking down these mindsets,” she said. “What has come out of our research is that systems can only go so far, but it’s people and mindsets and ways of working that are critical.

“Financing is often seen as a separate thing, a standalone tool, but in fact, if done the right way, it can facilitate the nexus. But it has to be done in parallel with a change in mindset.”

Zamore said change was needed on both sides of the fence.

“Humanitarians themselves aren’t necessarily used to planning over multiple years,” she said. “So some of the plans they are submitting can end up looking more like a series of one-year plans than one long-term strategy, which doesn’t really inspire the donors to make major multi-year contributions.

“That caution among donors in turn affects the ambition of the plans that agencies submit,” she noted. "It’s a classic chicken-and-egg situation.”

How is nexus funding changing programming?

“I think the nexus has been a bit of a ‘thousand flowers bloom’ in terms of the approach so far… [with] country teams being told to go off and make it work, and I think that has had mixed results,” acknowledged Scott from the OECD.

Cecilia Roselli, head of the Norwegian Refugee Council’s Partnership and Humanitarian Policy Unit, said there were “some early good examples of nexus financing” – such as the Minka Fund in Cameroon, the German transition financing instrument, and some World Bank initiatives. But, she cautioned, “I really think it's still too early to say if these have already had any impact in changing the way we are programming.”

Zamore told TNH she’d seen “more capacity to shift from development to humanitarian budget lines, and vice versa, and more donors have changed their own internal procedures and rules so that they can give more multi-year humanitarian funding”.

Dalrymple said there was an emergence of some innovative approaches, such as risk financing mechanisms, and efforts to bring more focus to refugee and migration responses.

Other notable developments observed by DI include: designated resilience funds for less urgent humanitarian situations where longer-term aid programmes aren’t in place; changes in the profile of staff at country level; and new flexibility within budgets to allow changes in project direction midway.

However, Dalrymple said there was still “a need to fill the gap of the ‘missing middle’ between top level policy and operational country, regional, and sector strategies”.

“A lot of donors are doing the nexus, but it is in pockets and not systemised, which makes it hard to evaluate,” she said.

Several new funds have been launched that commit significant sums of money to be spent in a nexus-style way.

READ MORE →

The nexus in action: New tools

In Chad, the EU’s DIZA programme (Programme de développement inclusif dans les zones d’accueil) is combining humanitarian and development aid to target refugees, returnees, internally displaced people, and host communities by seeking to provide better access to basic social services, employment opportunities, and stronger local governance.

The €15 million programme, first approved in 2017, is being implemented by a consortium of international and local NGOs, in cooperation with local authorities. It is considered a nexus approach because it is helping a range of different people in different stages of need, and providing a mix of emergency and longer-term support, crucially all from the same pot of money.

Another example is the Minka fund, launched by the French government’s Agence Française de Développement (AFD) in 2017 to support peace and resilience projects in the Sahel and Lake Chad regions, Central African Republic, and parts of the Middle East. The fund provides €100 million a year of French and other international funds, which are channelled “through a common programmatic approach and based on joint diagnostics” – a key component of nexus programming.

And, in July this year, the United Nations Development Fund (UNDP) unveiled its $100 million Regional Stabilisation Facility for Lake Chad. Effective from September to run until 2021, UNDP says this “rapid response mechanism” should “curtail the activity of Boko Haram insurgency by restoring and extending effective civilian security and improv(ing) the delivery of basic services and livelihoods in Cameroon, Chad, Niger and Nigeria”.

Making the case for this new approach, UNDP’s regional director for Africa, Ahunna Eziakonwa, said: “If we respond appropriately to grievances and end the spiral of insecurity, forced displacements, and conflict, the situation in the Lake Chad Basin can be stabilised, and the foundations of recovery and development established.”

OECD’s Scott, however, saw these initiatives as peripheral to the wider implementation of the nexus. “It's not really about new tools and instruments,” she said. “It's about bringing everything together and making sure that what funding you do have in a particular situation is coherent.”

A report published earlier this year by the Norwegian Refugee Council looking at the financing of the nexus in five case study countries – Cameroon, Central African Republic, Chad, the Democratic Republic of Congo, and Ukraine – also observed how some of the new flagship multi-year funding instruments were very much framed around specific issues, such as curbing extremism or reducing migration.

These thematic approaches, the authors said, had created “new coordination problems”. Despite “aspirations to work toward collective outcomes”, there was evidence of “fragmentation and incoherence”.

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