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Publications, 10/10/2004

Refocusing Finland's Cooperation with Namibia

pdf  Evaluation Report 2004:4

ISBN 955-724-477-0, ISSN 1235-7618

Instruments and actors for civil society and businesss community partnerships
LarCon Ltd. in association with Integrated Training Consultancy Servicess cc, Parola International Associates, Nordic Consulting Group A/S and Southern African I.D.E.A.S. (Pty) Ltd.

0. EXECUTIVE SUMMARY
0.1 Key Findings and Conclusions

Namibia as Finland’s Development Partner
. • Since 1970, Namibia has been Finland’s 11th biggest recipient of bilateral aid. The total value of Finnish aid to Namibia in the period 1970–2003 was 114 million EUR, including the support before Namibia’s independence.
. • In 1991–2003, Finland’s aid disbursements to Namibia amounted to 95.6 million EUR. Since 1992, the disbursements have hovered between 6 and 8 million EUR annually. The health and social sector, water sector and forestry sector represented 74 % of the total bilateral aid during1991– 2002.
. • Namibia’s Vision 2030 represents a good effort to set long-term goals and measurable objectives to the development of the country and its economy. The target seems very ambitious, given the existing bottlenecks and the actual performance in the past.
. • The decision to include Namibia in the transition countries in the framework of Finland’s development cooperation is justified and founded on realistic assessment of both Finland’s and Namibia’s development plans and policies.

Past Cooperation by Sectors
. • The health sector has received 40% of the total grant aid from Finland to Namibia since 1970, or EUR 29.9 million. The Finnish assistance has been highly relevant and has had an impact on the performance of the sector. The proposed concessional credit will address urgent equipment replacement issues. The structural constraints of the health sector will need to be addressed under the decentralisation process.
. • The water and environment sector has received 18% of the total assistance, or EUR 13.4 million. In the absence of funding for bilateral projects, the cooperation between Finland and Namibia in the water and environment sector is likely to dwindle. Finnish participation in construction projects or equipment deliveries is unlikely. Finnish consulting companies may succeed in bidding for EU or other multilaterally financed projects.
. • The forestry sector has received 16% of the total Finnish bilateral grant assistance since 1970, or EUR 11.7 million. Finland’s assistance has been beneficial, particularly in organizational and policy development, and in enhancing the professional capacity in forestry sector management. Current trend is towards management of wider environmental issues, and towards community-based operations.
. • The project to assist local government and to support decentralisation (CABLE) did not take account of the stage of development in the decentralisation process in Namibia and was poorly managed. The new project to support the decentralisation process will have to be implemented with maximum flexibility. The expectations to what can be achieved during the four-year project may be overly ambitious.

Civil Society Cooperation
. • The Local Cooperation Fund has provided a conducive environment for the strengthening of democratic practices, promoting good governance, institutional networking and cultural exchange programmes. Exchange in terms of civil society organizations in Namibia to share experiences has not been adequately explored.
. • The NGO projects have significantly contributed to the management and performance of several sectors. Finnish NGOs have enhanced the level of education and heightened the citizens’ national awareness. Since year 2000, projects focused on adding value to government services for people living with disabilities, and concentrated on early childhood education, youth development, trade unions and the fight against HIV/AIDS.

Business Community Cooperation
. • Trade between Finland and Namibia has been, and is likely to remain marginal. Tourism has much more medium-term potential. Due to the high cost of international travel and local services, Namibia will remain outside mass-tourism destinations. Sporadic industrial investments are possible.
. • The range of Finland’s instruments for the promotion of business community cooperation in the developing countries are essentially more limited than those available in e.g. Sweden and Denmark. Without pro-active measures, the business sector relations between Finland and Namibia will remain dormant.

Regional and Multilateral Cooperation
. • The multilateral, regional and bilateral financing institutions will be playing a growing role in Namibian public investment.
. • Finland could support the World Bank and other DFIs in multilateral financing arrangements, and by providing advisory services. There is a need to energize the work of the dormant Namibia country team of the MFA, and to re-establish the priorities for Finland’s participation in Namibia’s development efforts.

Alternative Scenarios
• This report presents three alternative scenarios and their likely outcomes for future Finnish-Namibian relations: Scenario 1: Phasing out of bilateral sector projects, no other measures – NGOs and civil society organizations will continue cooperation, hampered to some extent by inadequate administration of instruments. Commercial relations will remain dormant. Scenario 2: Promotion of relations by existing instruments and institutions – NGO funds and local cooperation funds will be used more effectively. Active promotion in the use of existing instruments for trade and investment promotion could lead to sporadic commercial projects. Scenario 3: Pro-active promotion of business community cooperation – The volume and effectiveness of civil society cooperation will increase through improved management. New proactive measures for the promotion of Finnish/Namibian business ventures could generate 3 – 5 commercial projects by 2010.

Cooperation Outlook
. • In the transition period of 2004–2007, the volume of Finland’s development cooperation with Namibia will drop from the level of 6 – 8 million EUR of annual disbursements to 3–4 million EUR. The traditional sector projects will be phased out, and the Local Cooperation Fund will become the dominant instrument of public development cooperation.
. • To meet Finland’s stated objective of deepening of trade and economic relations with Namibia, a forceful promotional effort during the transition period would be necessary. This report proposes a new instrument for the promotion of business community cooperation between Namibia and Finland: Namibia Transition Facility (NTF).

Administration
. • The Finnish Embassy in Windhoek has managed the sector projects as well as the NGO and LFC instruments remarkably well within the limits of its resources.
. • There is an apparent lack of modern management systems in the administration of Finland’s development cooperation. This also applies to Namibia. This is reflected in accessibility of key information, inadequate project management procedures, diluted accountability due to organizational changes, and low cost efficiency. Measures to improve management efficiency are necessary. The cost of aid administration in Namibia has increased.


0.2 RECOMMENDATIONS
. • Implement transition period policies in Namibia, shifting focus from traditional sector projects to new forms of civil society and business community cooperation, supported by existing and new instruments.
. • Continue NGO cooperation with emphasis on improved screening of applications, close monitoring, and immediate intervention in case of deviation; secure policy compliance and create a tighter focus based on results of a NGO sector study.
. • Expand Local Cooperation Fund (LCF) budgets to EUR 2 million by 2006 as planned. Diversify LCF use by adding new “windows” for short-term advisory services and for the Media and Cultural Facility.
. • Improve information sharing and coordination among NGO and Local Cooperation Fund (LCF) projects in order to improve effectiveness of project preparation and implementation; establish an “early warning system” and initiate a policy of immediate intervention in crisis situations.
. • Mainstream gender and HIV/AIDS issues in project management.
. • Adopt a policy of pro-active promotion of business community cooperation through the Local Cooperation Fund resources and through the establishment of Namibia Transition Facility; target 3 – 5 new Finnish/Namibian business ventures by 2010.
. • Prepare Project Document for Namibia Transition Facility and launch the Facility by June 2005.
. • Promote multilateral and regional projects that are in harmony with Finland’s development policies, but exceed Finland’s financial and management capacity to act alone, such as programmes addressing the HIV/AIDS issue.
• For the proposed concessional credit to finance purchase of medical equipment for Namibian hospitals, (1) require sector reforms as conditionality, (2) eliminate Finnish content requirement,
(3) require international bidding.
. • For the last sector project “Support to the Namibian Decentralization Process”, introduce measurable performance targets and strict monitoring; retain maximum flexibility in project implementation.
. • Improve insufficient management systems and monitoring mechanisms at MFA; demystify ‘policy jargon’ and redefine instruments; clarify management tasks by MFA and Embassy; reform management systems, adjust application procedures, and outsource support services.
. • Improve information and communication material and services (statistics, country reports, global.finland etc.); consider outsourcing of promotion services.
. • At the Windhoek Embassy, achieve and maintain the share of administrative cost at 7 % of aid disbursements by 2007.

This document

Updated 7/12/2006

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