Development Goes Digital

Innovations in areas such as mobile payments and remote healthcare in developing countries are helping to turn the old development paradigm on its head. “It’s not any more the South which has the problems and the North which has the solutions,” said Alexander De Croo, Belgian Deputy Prime Minister. “It’s for the first time a real multipolar role,” as digital technology is becoming an integral part of society in the least developed countries.

However, digital innovation does not automatically lead to inclusive growth. De Croo warned that without smart policies, “the digital dividends will remain in the smaller group of the population. […] It needs to be part of development policy but for the first time really in a multi-stakeholder approach, with private sector, civil society and with government all together.”

The EU invests €32 billion a year in development funding, though only around €350 million disbursed from 2001-13 was connected to digital issues. More than €150 million is currently allocated to ongoing D4D activities (Digitalisation for Development) such as the Africa Connect2 project and the Central Asia Research and Education Network (CAREN3). In addition, projects like Satellite Enhanced Telemedicine in Sub-Saharan Africa and the Africa Internet Exchange System are being developed under blending, a financing mechanism that combines EU grants with loans or equity from public and private financiers. EU Member States are pushing for more investment in digitalisation.
 

Image

Credit: Rob Tinworth

In June 2016, Neven Mimica, EU Commissioner for International Development and Cooperation, said that "a new strategic framework will enhance the efficiency and effectiveness of our interventions". He added that the way to strengthen digital infrastructure and connectivity is to establish an enabling policy and regulatory framework. "To move forward in mainstreaming digitalisation in development, we need EU institutions and Member States to work more closely together, sharing responsibilities and resources", said Mimica.

Belgium is one of the frontrunners: the Belgian ministry for development cooperation wants to see a digital element embedded in every single one of its development projects. However, De Croo noted that donors might not be “100% ready” to take this digital plunge. When the Belgian ministry instigated the new rule, “People almost started laughing, saying ‘how do you want this to work – if we build a new road somewhere, what’s the digital component?’” said De Croo. “And I said, we should try even harder.”

“If you build a digital component, it forces you to work for example with open data, which means other people can use the benefits of what you’re doing,” said De Croo. 

Several actors gathered at the European Development Days in Brussels to discuss the role for digital technology in achieving the Sustainable Development Goals. There was acknowledgement that digital is not a goal in itself, but a powerful tool which can be used to tackle the rest of the 2030 Agenda, from healthcare to accountability.

Capacity4dev spoke to innovators on both these fronts: Michael Joseph of Safaricom on next steps after M-Pesa; and Roderick Besseling of Cordaid on the International Aid Transparency Initiative.

Health via mobile phone

Safaricom, owned by Vodafone, launched its SIM-card based cash transfer system M-Pesa in 2007. Today, around 17 million people use it every day, transferring around €1.6 billion each month. 

Because of the huge volume of transfers, Safaricom began earning a significant amount of interest. “Because we’re not a deposit-taking institution, you can’t really pay the interest back to the individual. So we set up the Mpesa Foundation, and use the interest to fund good projects in Kenya.”

These have ranged from education and wildlife conservation projects to the “weird and wonderful”, such as sponsoring “a cowshed in a children’s home” and “every marathon and half marathon in Kenya”.

The next project is M-Tiba, a healthcare scheme. M-Tiba is a ‘tab’ on the M-Pesa wallet, and the money inside can only be spent on healthcare at specific clinics. Still in its infancy, the project could transform healthcare provision and funding in Kenya.

More than half of poor Africans receive treatment in private hospitals, but without health insurance, they are required to pay in cash. With M-Tiba, “either your employer puts the money there for you, or a donor puts it there, or a health insurance plan, or relatives,” said Joseph. The funds can only be used at certified regulated health clinics. So far 2,000 clinics have signed up, and 750 are receiving assistance to improve their standards.

Safaricom is working with an NGO called Amref Health Africa, which has devised a mobile phone-based training programme for far-flung community health workers. Once trained, they will be able to provide all but the most sophisticated healthcare services, diverting some patients away from more expensive hospital visits.

Joseph believes the M-Pesa system could be rolled out successfully in any country with a significant gap between the number of people with mobile phones and the number with access to bank accounts. It’s already available in 10 countries, and Joseph said that Safaricom is willing to share the technology with others who want it.

M-Tiba has the potential to follow a similar trajectory, improving the quality of its network of clinics and bringing access to health funding to uninsured populations.

Data Revolution for Aid Transparency

The International Aid Transparency Initiative, or IATI, is an open data framework to promote accountability and transparency of development aid flows. Launched at the Busan Forum on Aid Effectiveness in 2008, it is now used by some 450 organisations, including donor countries, governments, civil society organisations and private institutions.

Members join on a voluntary basis, although some donors are considering making it mandatory for the agencies to whom they disburse funding. DFID and the Dutch Ministry of Foreign Affairs already require organizations to publish via IATI for their reporting and other countries are looking to follow suit in 2017.

Two main benefits are accountability and transparency. “Open data and transparency are becoming more and more important nowadays,” said Roderick Besseling, Open Data & IATI Manager at the Dutch development organisation Cordaid. “Development organisations of course have always wanted to do that, but they’ve often lacked the framework.”

Through IATI, funding can be easily tracked from donor to partner country or civil society organisation, and on down to the projects on the ground. Being able to ‘follow the money’ means organisations are becoming more accountable to their donors, and more importantly to their beneficiaries.

IATI itself could contribute to efficiency by making reporting more straightforward for development organisations, freeing time and resources for their core development work. Plan Finland in cooperation with Cordaid and other organisations are finalising an IATI Business Case which organisations can use to understand the benefits of IATI for their organisations. “Organisations start realising how inefficient some of their reporting processes are and how they can be done better,” said Besseling. “IATI in theory cuts down the amount of reporting we have to do and cuts the paper as well.”
 

Using the framework can also influence the way organisations make decisions. When Cordaid started reporting to IATI in 2013, it soon found that “it’s not just useful for communication but also for strategic decision making,” said Besseling. “We’ve seen how using IATI, we’re slowly becoming a data driven organisation where we base decisions, especially at a senior management level, on our own data sets and other data sets we can find.”

The framework is set to be adopted in the humanitarian sphere as well. At the World Humanitarian Summit in Istanbul in May, humanitarian actors signed up to use the framework within two years. This has the potential to improve the effectiveness of humanitarian relief and longer-term development work. By providing a standardized and centralized data set for funding from each organisation to each country and sector, it could help highlight shortfalls and uneven distribution, as well as giving partner countries up to date information to manage resources effectively.

By giving organisations a central registry with descriptions of each project and regular updates, IATI could also improve knowledge-sharing between development and humanitarian organisations.

For more on how digital technology can contribute to development goals, visit:

European Development Days Sessions

• Digital technologies' contribution to the Sustainable Development Goals
• Mobile technology: Democratising health care in Africa
• Opening up with the International Aid Transparency Initiative

This collaborative piece was drafted with input from Marc Stalmans from DEVCO, with support from the capacity4dev.eu Coordination Team. Image credits:
banner: UN Women / Gaganjit Singh Solar Engineering trainer, Barefoot Colledge, India via Creative Commons lincense 2.0.
thumbnail: Rob Tinworth's 'Possible' via Creative Commons lincense 2.0.