5. Germany’s delivery modalities and partnerships
This chapter looks at the principles that guide Germany’s partnership approach across its development portfolio and how Germany uses its financial, diplomatic and technical resources in its global engagement and in partner countries. It assesses whether the approach and principles are consistent with Germany’s development co-operation policy and international commitments on development effectiveness: ownership of development priorities by developing countries, a focus on results, inclusive development partnerships, and transparency and mutual accountability. The chapter first considers Germany’s approach to partnerships for development co-operation with a range of actors, assessing whether they embody the development effectiveness principles. It then explores whether Germany’s work in partner countries is in keeping with its domestic and international commitments to, and principles of, effective development co-operation.
Germany has a strong and diverse ecosystem of partnerships, ranging from multilateral institutions to partners engaged in development co-operation at state and municipal levels in addition to active civil society organisations (CSOs), including church-based organisations and the six political foundations, numerous research and evaluation institutes, and an interested private sector. Activities of the federal states and municipalities, while smaller in size than those of the Federal Government (Chapter 2 and 4), bring development co-operation and solidarity into the lives of citizens. At the same time, development co-operation is considered mainly as government-to-government co-operation and Germany could make better use of its diverse partners.
Germany could step up its funding to CSOs, including to local CSOs in partner countries, and reduce bureaucratic hurdles. CSOs appreciate the increased funding through the private provider programme. Scaling up and having more effective and less cumbersome procedures for CSO funding, including more flexibility to adjust to changes in the partner countries, would allow German CSOs and their partners to adapt better to changing contexts.
Dedicated mechanisms and instruments enhance predictability and flexibility to involve the private sector in German development co-operation — a goal that is explicitly put forward in the Africa-related initiatives, reform partnerships and BMZ 2030. Different platforms, organisations and support mechanisms are available in addition to co-funding for public-private partnerships. Germany could commit to projects with the private sector beyond the usual three-year funding period and reduce the bureaucracy involved in joint projects.
As a strong supporter of multilateralism and European Union (EU) joint programming and a champion of triangular co-operation, Germany opts for joint approaches where possible. Germany could do more to encourage multi-stakeholder partnerships.
A former co-chair of the Global Partnership for Effective Development Co-operation (GPEDC), Germany champions development effectiveness but will need to ensure the 2030 reform strategy of the Federal Ministry for Economic Cooperation and Development (BMZ) safeguards partner country ownership and demand-driven partnerships. The current reform process is a good opportunity to rethink the form and content of its country strategies with a view to sharing them in a transparent way with partner countries. Germany’s wide ranging partnerships could be included in the implementation of the country strategies. Germany’s support to partner countries is predictable, and its forward planning is strong. Generally, government-to-government negotiations ensure a link to partner countries’ national development strategies and existing country portfolios.
Germany has a broad range of instruments at its disposal to respond flexibly to partner countries’ demands, with the COVID-19 response a good example to build on. It makes good use of its offices in partner countries, research institutions and think tanks to develop context analysis and understanding of partner countries. For the six African reform partners, reform financing, including as policy-based grants and loans, is tied to showing results that are agreed by the partner country and Germany.
Germany could make better use of its diverse development co-operation partners
Germany has a broad range of partners that are strongly engaged in development co-operation at state and municipal levels in addition to an active CSO scene, including church-based organisations and the six political foundations, numerous research and evaluation institutes, and interested private sector partners. Political foundations are a unique instrument of German development co-operation, with networks across political parties, parliaments, trade unions, social movements and other areas. At the same time, development co-operation is thought of mainly as government-to-government co-operation (Chapter 2), and Germany could build more on the expertise of its non-state partners.
While smaller in size than those of the Federal Government (Chapter 2 and 4), the activities of federal states and municipalities bring development co-operation and solidarity into the lives of citizens. For instance, German municipalities engage in twinning activities, grassroots development projects and exchanges with partner municipalities which contribute to raising awareness of development issues on both sides, as the example of the Rwanda-Rheinland-Pfalz partnership and its twinning projects vividly illustrate.
In Tunisia, BMZ’s support for diverse German CSOs has enabled them to engage with Tunisian partners in ways that complement official German development co-operation. The six political foundations, the German Tunisian Chamber of Industry and Commerce, and other civil society organisations are encouraging participation in democratic processes, providing training to meet the demands of the Tunisian labour market, supporting progress towards a digital economy and attracting private sector investment. These initiatives are drawing on the potential of Tunisia’s young and well-educated population and creating opportunities for them and returning migrants.
Germany could step up its funding to CSOs, including to local CSOs in partner countries, and reduce bureaucratic hurdles
CSOs appreciate the increased funding through the private provider programme. At the same time, the share of Germany’s funding going to CSOs, at 8%, remains below the OECD average of 15%. Scaling up and having more effective and less cumbersome procedures for CSO funding, including more flexibility to adjust to changes in the partner countries, would allow German CSOs and their partners to adapt better to changing contexts (VENRO, 2020[1]). Maintaining leeway for small CSOs to continue engaging in grassroots activities is important. However, while Germany has made progress since the last peer review, it could make greater efforts to move larger CSOs from project-based to programme financing based on agreed results.
Engagement Global provides valuable support to German CSOs, as does VENRO, the umbrella organisation of development and humanitarian non-governmental organisations (NGOs). CSOs funded through the private provider budget line can receive support and advisory services through Engagement Global as the one-stop shop for civil society engagement in development co-operation (Chapter 1). Funding and advice for municipalities to engage in development co-operation is also channelled through Engagement Global (Table 5.1), which is mainly funded by BMZ. As the 2015 peer review proposed, finding the right balance between signing multi-year framework agreements with some CSOs and allowing for small CSOs to propose projects would encourage greater diversity.
Germany has improved the quality of its civil society partnerships, but challenges remain. Germany could step up its funding to local CSOs and its support for civic space in partner countries in consultation with German CSOs and their partner organisations. Official funding to CSOs on the ground is limited and mainly through embassy budgets for small CSO projects. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH also provides funding through local subsidies, as seen in Rwanda (Annex C), and involves civil society as an active partner in change processes by providing platforms between the larger governmental institutions and local activists. KfW Development Bank increasingly co-operates with CSOs that have specific mandates, favourable access to local populations, or particular thematic expertise (e.g. World Vision, World Wildlife Fund, etc), using specific guidelines, operating procedures, and key accounts to work with partners beyond governments. In fragile contexts, where NGOs may rely both on development and humanitarian aid funding sources, the situation is more complicated due to the Federal Budget Law, as the Federal Foreign Office (for humanitarian assistance) and BMZ (for development co-operation) have different accountability requirements and do not allow different ministry budgets to be used to fund a single project (e.g. water, sanitation and hygiene infrastructure in a refugee camp).
Germany makes good use of its various technical co-operation instruments. For example, GIZ supports institutional strengthening of CSOs by a technical co-operation project, and at the same time deploys development workers and civil peace servants to support Rwandan CSOs. Rwandan partners value the support in general and the predictability of these experts as they work with local CSOs for two to four years. Direct support to grassroots and small- to medium-sized CSOs is one important avenue for Germany to reach local beneficiaries and marginalised populations, bringing the voices of those on the front line of poverty, inequality and vulnerability to development processes (OECD, 2018[2]); and maintaining local networks to ensure there is extensive on-the-ground knowledge (Chapter 7).
Germany could do more to create an enabling environment for CSOs in partner countries and to better engage with them. While the Africa policy guidelines call for deepening civil society partnerships, they will be difficult to achieve without a strategy that goes beyond the existing mechanisms. This may be because the German federal government may only work indirectly with Southern civil society partners by supporting international or German civil society actors or using micro-project funding instruments. At country level, KfW and GIZ implement programmes with civil society actors.1 The latest GPEDC monitoring round, however, found Germany could do better in engaging civil society actors in partner countries, for example in preparing their country strategies or tracking and evaluating projects or programmes (OECD/UNDP, 2019[3]). As Germany expands the reform partnership with Tunisia to support good governance, it could work to assess and decide how to partner and consult more strategically with civil society. This would contribute to ensuring the relevance and sustainability of all of its public investments (Annex C).
Through a diverse set of mechanisms and instruments, Germany facilitates private sector engagement in partner countries
Germany provides incentives for its private sector to take responsibility and engage in development co-operation through dedicated mechanisms and instruments. These include the Agency for Business and Economic Development, develoPPP.de and AfricaGrow and the provision of export credit guarantees (“Hermes”) and investment guarantees (Chapter 2). In addition, the network of German Chambers of Commerce Abroad offers support to partner countries and German businesses to engage in building capacity and establishing business associations. Private sector actors regard the government (mainly BMZ and the Federal Ministry for Economic Affairs and Energy) as strategic partners; they value the support of GIZ offices on the ground, which facilitates project implementation.
Germany could commit to projects with the private sector beyond the usual three-year funding period and reduce the bureaucracy involved in joint projects. Private sector involvement lends credibility to Germany’s long-term investments in partner countries, provides training, creates jobs, and brings new experiences and expertise. Germany spearheaded the drafting and agreement of the Kampala Principles and created the Business Leader Caucus under the aegis of the GPEDC, underlining the importance it gives to partnering more with the private sector. Over time, government and business partners managed to understand each other’s logic of intervention, but bureaucracy is still a stumbling block for stronger partnerships. Also, Germany could make better use of the private sector expertise in areas such as renewable energies, digitalisation, and implementing corporate social responsibility projects and standards and could involve business representatives more regularly in thematic and regional discussions on Germany’s development co-operation.
Germany engages in successful multi-stakeholder partnerships but could do more. The BMZ Charter for the Future included multi-stakeholder partnerships as a key action area to implement the “new global partnership” and aimed to develop a new generation of multi-stakeholder partnerships (GIZ, 2017[5]), which was reaffirmed in BMZ 2030 (Chapter 2). The private sector values the joint learning exercise and BMZ’s openness for inputs in establishing this partnership, which was adapted to the needs and realities on the ground based on companies’ feedback. Working with a diverse set of partners is key for the success of the textile partnership and the new Green Button label (Chapter 1, Box 1.1). Given the strong support for sustainability issues among development stakeholders and the diverse landscape of partners, Germany could step up its engagement in multi-stakeholder partnerships to live up to its policy ambitions of bringing together diverse sets of experiences, views, voices and approaches in equal partnerships to work towards a common good.
As a strong supporter of multilateralism and EU joint programming and a key partner in triangular co-operation, Germany opts for joint approaches where possible
A champion of EU joint programming, Germany could step up its efforts in EU joint implementation (Chapter 3). Germany participates in 85% of the EU’s joint programming efforts in 67 partner countries, ranking first among EU member states, according to 2019 data collected by the European Commission (European Commission, 2019[6]). Yet, Germany’s country strategies and programming documents do not refer to EU joint programming and EU joint implementation, and the latter is still rare. Germany is committed to Team Europe and aims to engage via its embassies and KfW on developing a Team Europe approach on the ground in partner countries, paving the way for more joint implementation2.
EU member states perceive Germany as a driving force for government-development partner co-ordination in Rwanda and Tunisia. Furthermore, in 2019, 170 projects implemented by GIZ were EU-delegated co-operation projects or co-financing arrangements with EU member states — accounting for 11% of GIZ’s business volume (GIZ, 2020[7]). Germany receives co-financing from its DAC partners, for instance from the United Kingdom’s Foreign, Commonwealth and Development Office for the green fund in Rwanda, and in countries where other DAC members have no presence on the ground, building on Germany’s country offices and partnerships in the field.
Germany engages in parallel and co-financing arrangements with multilateral organisations. The Ruzizi III hydropower plant in the Democratic Republic of Congo is financed by the World Bank, the African Development Bank, the European Investment Bank, Agence française de Développement and KfW. In Tunisia, the reform matrix Germany developed for its reform partnership paved the way for a joint approach to policy based lending by the World Bank and three bilateral partners (France, Germany and Japan). Implementing the joint matrix is still work in progress. The African Development Bank has signaled that it will join the reform approach in 2021, and the EU has aligned its work to that of partners engaged in policy based lending.
Germany is stepping up its engagement in triangular co-operation, leveraging partnerships of trust with its partners to jointly tackle global challenges (Box 5.1). Through BMZ 2030 and building on its strength in working with middle-income countries (Chapter 3), including the eight global partners, Germany could share its experience and knowledge with countries in the same neighbourhood or with other regions and could mainstream triangular partnerships throughout its portfolio.
Germany has increased its transparency and accountability
Germany publishes to the International Aid Transparency Initiative (IATI) on a monthly basis, providing information on more than 9 000 projects (BMZ, 2021[8]) and improved its rating in 2020. KfW has moved up from fair to good on the Publish What You Fund Index, and GIZ’s rating remains good. While Germany is transparent and accountable to a German-speaking audience, it could increase availability of project information and evaluations in English or other international languages to increase transparency to its partner countries and the global development co-operation community. Information on GIZ projects and evaluations is easily available in English on line, while KfW provides aggregated data in English and its detailed project database is available in German only.
With rising budgets, there is increased pressure from BMZ and the federal parliament on the implementing organisations to be accountable. For instance, GIZ has seen an increase of external audits, controls and evaluations, reaching around 1 000 per year, which include those conducted for an increasing number of public clients and co-financing partners. Furthermore, questions from the federal parliament to BMZ have intensified during the current legislative period. While such requests are important for the purpose of public accountability, managing them is time-consuming for implementing organisations and may require additional, dedicated staff to work on issues related to accountability.
Germany is among the most active partners in triangular co-operation worldwide (Global Partnership Initiative, 2019[9]; OECD, 2021[10]). It engages in global discussions on using the modality to achieve the 2030 Agenda within the scope of the United Nations, OECD, GPEDC and the Global Partnership Initiative on Effective Triangular Co-operation. A recent portfolio evaluation of German triangular co-operation by DEval concluded that the instrument has great potential. Germany recognised early on that triangular co-operation has a political-strategic (partnership) and programmatic-thematic (development results) dimension (German Institute for Development Evaluation, 2020[11]). An example is its work with Indonesia and Mexico where the experiences of triangular co-operation supported the establishment and strengthening of the new co-operation agencies, Indo-AID and AMEXCID.
Concrete development results also were achieved in the ten-year partnership between the Brazilian and German metrology, INMETRO and PTB, institutes to establish a Mozambican metrology institute, with the support of the Brazilian Cooperation Agency, BMZ and GIZ. The quality control of this metrology institute has helped Mozambican businesses market their goods in the Southern African Development Community.
Working with the private sector in triangular co-operation — for example, in partnerships between China, Ethiopia and Germany and between Germany, Guatemala, Honduras and Mexico — has produced valuable results for all partners. Similarly, working with CSOs often complements government co-operation, as is the case for the triangular partnership between the Tunisian Center of Arab Women for Training and Research, the Arab Gulf Program for Development, the Saudi Fund for Development, and Germany to support financial inclusion of young Tunisian and West Bank and Gaza Strip entrepreneurs.
German triangular co-operation offers a number of lessons learned:
Regional Fund for Triangular Co-operation in Latin America and the Caribbean, which celebrated its tenth anniversary in 2020, enjoys great popularity in the region, is well known by all partners and regularly receives more applications than it can fund. During the COVID-19 pandemic, it quickly adapted its upcoming call for project proposals to tackling the pandemic. Based on the lessons from this region, Germany set up a new regional fund for Asia.
Partnership and development results are closely linked in most triangular co-operation projects, they allow the testing of new ideas and learning by all three (or more) partners.
Perceived transaction costs in triangular co-operation are an investment in the partnership among the partners and contribute to harmonising efforts in the beneficiary countries.
It is important to create incentives to spot ideas for triangular partnerships and to communicate the benefits of working trilaterally across the German development co-operation system.
BMZ 2030 highlights multi-donor partnerships including triangular co-operation, a twofold opportunity to achieve impacts and mobilise additional resources (BMZ, 2020[12]). A new strategy paper and guidance on triangular co-operation are being prepared to implement the recommendations of the DEval evaluation, in line with BMZ 2030. BMZ also is assessing the option of creating new regional funds for the Middle East and Northern Africa (MENA) region and Africa.
Rethinking the form and content of its country strategies would enable Germany to move towards a coherent, German approach and increase transparency and accountability
The BMZ 2030 reform process offers an opportunity to alter the content and purpose of country strategies. Currently, the country strategies are internal BMZ documents (drafted in German) that include frank analyses of challenges and draw on the expertise of the implementing organisations, research institutes and think tanks. The content of country strategies varies from country to country. Usually, they are aligned with the 2030 Agenda and most comprise indicative funding projections and objectives of the three focus areas of co-operation. However, only some have an overarching objective for co-operation with the country. Including results at all levels is good practice (Chapter 6), which Germany could take up in drafting future country strategies.
Including a whole-of-nation perspective in country strategies would provide partner countries a comprehensive view of German development co-operation. This would in turn enable concrete programmes of technical and financial co-operation and individual modules to be developed. The activities of other federal ministries and German government entities are not systematically or comprehensively reflected in country strategies. Nor are these ministries and other entities asked to provide inputs to BMZ as the lead ministry for development co-operation. Furthermore, links to EU strategies and joint programming could complement the German approach, especially in countries where Germany has a small portfolio. Adding information on activities of German non-governmental partners would enrich the scope of the country strategies. Sharing country strategies with partner countries and publishing them on line would increase Germany’s transparency and mutual accountability with its partners and its public.
For instance, in Tunisia, Germany could do more to tell the story of how it contributes towards the goals of Tunisian citizens, civil society organisations and the government itself through its broad range of partnerships. In addition to modelling transparency, such an approach could highlight how Germany is supporting government, civil society and private sector efforts towards a more pluralistic society and sustained growth, while at the same time linking back to overarching German policy goals, such as the G20 Compact with Africa and the BMZ Marshall Plan with Africa.
Globally, GIZ could benefit from making its vision of country engagement and objectives for technical co-operation, self-help and capacity building clearer. Germany offers high-quality staff that provide technical co-operation in a wide range of sectors and enjoys high appreciation from its partners. In a rapidly changing and increasingly interdependent development co-operation landscape, this model requires constant reflection in view of increasing capacity in partner countries, ensuring value for money of the chosen approach and ownership, and jointly working towards anchoring the project results in the partner country system to affirm sustainability. Projecting GIZ’s role in partner countries into the future where partners are likely to require more knowledge sharing, partnerships, and technical expertise, and will have fewer external resources to obtain it, GIZ could communicate better its vision for the breadth and role of its technical co-operation model.
A strong supporter of development effectiveness, Germany could facilitate greater partner ownership
Germany has played a leadership role in the Global Partnership for Effective Development Co-operation and has spearheaded efforts to adapt effectiveness principles to different contexts and modalities. The effectiveness principles guide Germany’s development co-operation, and Germany continues to lead work on translating them into guidance and practice for other partners.
The BMZ 2030 intention to make Germany’s development co-operation more effective requires contextualisation in partner countries. Partners, such as Tunisia, might at times be overwhelmed by the sheer size of Germany’s state and non-state partner activities and their funding (Chapter 4). In Tunisia, Germany is a strong supporter of the young Tunisian democracy. It has rapidly scaled up its portfolio since 2011 to such an extent that there is also a question of absorption capacity (Annex C). Germany might consider the level, focus and effectiveness of its official development assistance (ODA) to ensure it is achieving value for money and responding to what its partner countries need most at a given time.
As part of its commitment to ownership, Germany scaled up the provision of budget support in 2018. Typically provided with other development partners, budget support in the form of policy-based financing and reform financing also constitutes an important instrument in Germany’s six reform partnerships — one that works to strengthen public financial management systems (Annex C).
At the same time, where partners show strong ownership, Germany is willing to respond and adapt. For instance, Rwanda exercises strong ownership of development co-operation with Germany and is clearly demanding German support in the three agreed priority sectors. Both parties show a degree of flexibility and adaptability, such as GIZ aligning to the Rwandan fiscal year.
Germany could apply its Latin America and Asia experience in Africa. With its global partners and partners in Asia and Latin America, Germany follows a progressive, partnership-oriented approach, testing new ideas and jointly defining co-operation activities where all partners learn. Living up to the ambitions of the BMZ Marshall Plan with Africa and the Compact with Africa, Germany could follow more of such an approach with African partners rather than working in more traditional ways (Annex C).
Germany’s predictability and forward planning are strong
Government-to-government negotiations ensure a link to partner countries’ national development strategies and existing country portfolios. According to data from the GPEDC, Germany made efforts to improve country ownership from 2016 to 2018 (Table 5.2). Germany is successfully aligning new programme and project objectives with those defined in partner country strategies and plans. Of Germany’s total gross bilateral ODA, 42% was country programmable aid (USD 9.2 billion) in 2019 (Chapter 3). Based on country reporting for GPEDC monitoring, Germany performs better than the DAC average (Table 5.2). Forward expenditure plans received by countries from Germany covered 75% of estimated funding, an increase over the 2016 share of 62%. Annual predictability of German development co-operation is also high, with 91% of its funds disbursed to partner countries within the fiscal year in which they were scheduled for disbursement. However, only 53% of Germany’s development co-operation is recorded in partner countries’ budgets and subject to parliamentary scrutiny in the partner country (OECD/UNDP, 2019[3]).
The BMZ 2030 reform strategy requires clear transition and exit strategies as well as frank communication with Germany’s partner countries on the phasing-out of bilateral co-operation. Partner countries, however, were not involved in the process and were only informed of the results when the BMZ 2030 strategy was released in April 2020; some learned about the end of co-operation from the media. BMZ, German embassies and other federal ministries could have developed a clearer communication and exit strategy with partner countries - identifying areas and mechanisms to continue collaboration, for example via regional or triangular partnerships, co-operation with other federal ministries, or projects supported by CSOs or political foundations.
Germany could make greater use of partner country public financial management and country-owned results frameworks, planning tools and implementation capacity. As seen in Rwanda, procurement of German-funded activities can be done using national systems; the Rwandan government follows a pragmatic approach of seeing which system is more efficient and at times has decided to adopt international guidelines where necessary.
Germany has a broad range of instruments at its disposal to respond flexibly to partner countries’ demands, with the COVID-19 response a good example to build on
Germany makes good use of its offices in partner countries, research institutions and think tanks to develop context analysis and understanding of partner countries. Against this background, Germany uses a broad range of financial (Chapter 3) and technical co-operation instruments; engages in EU joint programming; and participates in co-financing with other development partners and with multilateral organisations to better tailor its approaches to the partner country’s demands and needs. In countries with a clear government strategy and vision for their development partners, such as Rwanda, Germany might involve partners in sequencing technical and financial co-operation early in planning.
The German COVID-19 response and additional support for partner countries (Chapter 3, Box 3.1), has shown that German co-operation can respond quickly, flexibly and effectively to new challenges. Furthermore, Germany’s special initiatives on forced displacement stability in the MENA region, and training and job creation are valuable responses to the 2015 refugee crisis that have led to successful initiatives on tackling root causes of forced displacement, support for host regions, pathways for legal migration, sustainable migration, reintegration and employment, e.g. in Tunisia. Germany could build on these experiences to enhance responsiveness and flexibility in its development co-operation.
Germany aims for participatory processes, taking into account the most vulnerable and marginalised groups in its programming and implementing. Building on its strength in the area of decentralisation, Germany could work more with grassroots initiatives, local groups and CSOs to support locally led change, including by engaging German municipalities in localising development initiatives.
Germany links the disbursement of ODA funds to the reform priorities of its six Africa reform partners
For the six African reform partners, reform financing, including as policy-based grants and policy-based loans, is tied to showing results that were previously agreed by the partner country and Germany. The reform partnerships are an essential part of the BMZ 2030 reform process and linked to both the Marshall Plan with Africa and G20 Compact with Africa (Chapter 2, Box 2.1). They are based on the commitment of these six countries (Côte d’Ivoire, Ethiopia, Ghana, Morocco, Senegal and Tunisia) to complete individual reform steps to promote private investment, vocational training and employment.
References
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Notes
← 1. An example of KfW and civil society working together is a water and sanitation hygiene project in Burundi https://www.kfw-entwicklungsbank.de/ipfz/Projektdatenbank/Wasser-Hygiene-und-Sanit%C3%A4rprogramm-PEHAT-%C3%BCber-NRO-34033.htm.
← 2. This is complemented by KfW’s co-financing initiative with Agence française de Développement (AFD) the European Investment Bank (EIB), and the Mutual Reliance Initiative (MRI), which is planned to be expanded to a broader Team Europe co-financing platform, including Cassa depositi e prestiti (CDP), the Spanish Co-operation (AECID) and other European development finance institutions - contributing to increasing co-ordination regarding project financing within the Team Europe framework.