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Capacity4dev Team created a new Article 20 February 2018
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The updated Budget Support Guidelines, introduced in October 2017, encompassed changes to the modality and a streamlining of existing procedures. Grounded in a logic of dialogue and partnership, budget support accounts for about 40% of EU’s bilateral cooperation. We talked to three EU Delegations to ask about their experiences with the modality and what the update of the guidelines means for their work.
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About a third of the EU’s bilateral cooperation is implemented through budget support – funds provided directly to a country’s treasury to be managed using national systems, conditional on policy dialogue and performance assessment. The EU had recently updated and simplified its Budget Support Guidelines. DEVCO’s Erica Gerretsen outlines the main changes.
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The financing needs of the SDGs range up to $7 trillion a year – well beyond the reach of traditional development assistance. Donors are looking at ways to leverage their resources by attracting private financing, for example through blending: combining public grants with loans or equity. Is it working, and how can it be done better? Capacity4dev hears from the authors of a recent evaluation of EU blending from 2007-15.
puppet show india
EU bilateral assistance to India is being completed, but cooperation continues on many levels, as Johann Hesse outlines. In this wide-ranging interview the Head of EU Cooperation reflects on lessons learned and the path ahead, including the crucial role to be played by civil society. In neighbouring Bhutan, he considers the impact of the country’s Gross National Happiness approach; and outlines EU support in areas from public financial management to climate change adaptation.
Thumbnail Image HoC Cambodia Article
Classed as a lower middle income country, Cambodia is a growing economy that is still marked by its history, notably the Khmer Rouge period. In the first of a new monthly series of articles featuring interviews with EU Delegations Heads of Cooperation, Fiona Ramsey shares best practice examples of the Cambodian Delegation’s work on joint programming and budget support, as well as advice for other delegations thinking of using these tools.
 When you think about development challenges, a lack of trained accountants might not immediately come to mind. Yet poor public sector financial management is often at the root of patchy service delivery in other sectors, from health and education to transport. South Africa recognised this underlying issue, and with EU support embarked on a capacity development programme.
Zambia can sound like a success. One of sub-Saharan Africa’s fastest-growing economies – with an average annual expansion of 3% between 2004 and 2013 – it was classed by the World Bank as a lower-middle-income country in 2011.
Estimates for achieving the Sustainable Development Goals range up to a $7 trillion a year. Where will it come from? According to two senior experts from the United Nations Environment Programme, the funds are there, and the real question is how they can be channelled from damaging investments towards sustainability.
Capacity4dev Team created a new Article 11 November 2015
The balance of international aid is shifting, with emerging donors contributing a growing proportion of the international development budget. The surge in investment needs careful handling to avoid gaps and overlaps, and to keep poverty reduction and lowering inequality at the heart of aid. Collaborative projects between the EU, emerging donors and beneficiary countries could be the way forward, according to a European Commission report, ‘The European Union, Africa and New Donors’. 
SMEs in developing countries face significant financing challenges due to the lack of appropriately-sized loans available to them. Needs on either end of the spectrum are – relatively – better addressed; large firms have a variety of mechanisms to choose from and grassroots initiatives fill the gap on the microfinancing end. The funding gap for SMEs, however, is estimated by the International Finance Corporation to be at least $2 trillion, with more than 200 million SMEs in need of a loan or overdraft. 

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