Re-thinking the displacement financing architecture in the Great Lakes Region At Danish Refugee Council

Context background

The search for durable solutions to the protracted displacement situation in the Great Lakes region (Burundi, DRC, Rwanda, Tanzania and Uganda), is a key humanitarian and development concern. This is a regional and cross-border issue, with a strong political dimension, which demands a multi-sector response that goes beyond the humanitarian agenda.

The numbers of forcibly displaced people across the Great Lakes Region are staggering (in February 2020 there were 5.1 million internally displaced persons and 2.8 million refugees) ^[1] and countries are facing major humanitarian challenges as a result. The region has been characterized by political instability and insecurity with high levels of poverty and vulnerability and, while significant stabilization has occurred, the issue of durable solutions for those displaced receives little attention from policy makers. Protracted displacement presents a destabilizing factor for the whole region and responses to displacement have often been short-term, and security or humanitarian oriented. Although three out of the five countries have been selected to pilot the implementation of the Comprehensive Refugee Response Framework (CRRF)[2], there is no comprehensive approach in the Great Lakes region that addresses the continuing needs of the displaced and their host communities in a more sustainable and durable way, and ensures mutual security.

Political instability, conflicts, land, natural resources scarcities and limited funding presents structural challenges to achieving durable solutions. Durable solutions (through voluntary repatriation, resettlement to third countries or local integration in the respective host countries) require greater political commitment, regional and international cooperation and responsibility sharing.^[3]

The Great Lakes region requires engagement and coordination between humanitarian, development, peace building (the so-called ‘triple nexus’) and private sector actors to support refugees, IDPs, host communities and hosting countries. As the numbers of displaced people continue to grow and the protracted nature of their displacement mostly further entrenched, humanitarian financing needs to be complemented by different types of development funding and other types of innovative financing to be able to sustainably respond to displacement challenges and needs.

There has been numerous research about how the current financing architecture is not fit for purpose and the need for new approaches to address the growing scale, duration and impact of displacement on countries and communities.^[4] At the 2016 World Humanitarian Summit, large donors and aid agencies signed up to a package of reforms to improve the efficiency and effectiveness of humanitarian financing launched through the Grand Bargain. Under the Inter-Agency Standing Committee (IASC) there continues to be related on-going work under their different Results Group, notably Result 4 (Humanitarian Development Collaboration) and Result 5 (Humanitarian Financing) to support further operationalising the nexus and its linkages to improved financing.[5] The 2018 Global Compact on Refugees (GCR) also underlined the importance of an internationally agreed, stronger, more predictable, and more equitable response to new and existing large refugee crises. At the heart of the GCR is the call for increased ‘responsibility-sharing’ with the aim to ease pressure on countries that welcome and host refugees. But as the Overseas Development Institute (ODI) has noted “the exhortation of ‘easing the pressure’ under the GCR largely comes down to a simple bargain between refugee-hosting states and donor countries: ‘you host, we fund’”.^[6] And yet the GCR does not contain a mechanism to ensure additional or more predictable funding including for hosting governments. While a large number of pledges including financial were made at the first Global Refugee Forum (GRF) in December 2019, it remains to be seen whether host governments in the region will receive a proportional increase and more sustainable funding to support their responses to refugees and host communities, including direct budget support and financing to their national development and sector response plans inclusive of displaced populations. The on-going work of the United Nations (UN) Secretary General’s High-Level Panel on Internal Displacement has also included financing as one of its six thematic work streams in 2020.[7]

As the Organisation for Economic Co-operation and Development (OECD) noted “… the nature and quality of financing suits a pattern of displacement that no longer exists, if it ever did. Displacement trends require humanitarian, development and peace financing to work in complementary ways”.^[8] However, humanitarian and often predominately fragmented short-term project-based funding continues to dominate financing in forced displacement situations.^[9]

The OECD found that in Africa just 14% of financing for refugee situations was development funding.^[10]

It is important to take stock, to review what exists, including the different financing instruments used to track the flow of aid, and to look at innovative yet feasible financing models outside of the displacement sector. Innovative financing models recently explored include Insurance and Insurance Linked Securities (ILS), Other Securitised Instruments including (Impact) Bonds, Credit Instruments, Debt Relief Instruments and Revolving Funds.^[11] In particular there are new debates emerging on innovative health financing for refugees including non-traditional applications of overseas development assistance, joint public-private mechanisms and flows that fundraise by tapping new and varied resources that deliver new financing solutions (blended finance).^[12] There is also the potential to learn from some of the innovative financing and risk-informed approaches to disaster risk financing in the humanitarian sector.^[13]

The need to re-think the displacement financing architecture comes at a time of the COVID-19 pandemic and its far reaching consequences on displacement-affected communities and the durable solutions agenda.

Objective

In order to re-think the displacement financing architecture and to be able to use different types of funding instruments to respond to different types of needs and challenges, the Regional Durable Solutions Secretariat for the Great Lakes (ReDSS GL)^[14], is seeking to commission an operational study on the displacement financing architecture in the Horn of Africa, with the objectives to:

● Research and analyse current financing modalities that exist (both within and outside the displacement sector and within the Horn of Africa region and globally);

● Explore through a series of country specific case studies (Burundi, DRC, Rwanda, Tanzania and Uganda), what are the current displacement financing modalities being used, in what context/sector and what is the political economy analysis related to aid financing between donors and the host country; and

● Recommend for each country appropriate financing modalities to address the specific displacement related needs and operational context, being through business cases for particular sectors or through developing new partnerships and instruments.

ReDSS hopes that the country level analyses, developed through multi-stakeholder consultative processes, will be used by donors, national governments and humanitarian and development partners to inform the use of different types of displacement financing models and partnerships to respond to specific displacement related vulnerabilities.

Phases of research/consultation

The research and consultation process will focus on two main phases:

A. Review and analyse of different financing modalities for displacement contexts

During this first phase the consultant(s) will conduct an extensive desk review and engage with key stakeholders to review, map and analyse financing modalities for durable solutions for displacement-affected communities.^[15] It will be useful to group and compare the different types of financing to simplify the matrix. To ensure that the research can be operationalised the consultant(s) will focus on particular key priorities such as access to services, financial inclusion, social protection and safety nets, graduation model and affordable housing and how they contribute/could contribute to strengthened protection, self-reliance and social cohesion of displacement-affected communities. This will consist of a thorough review of different existing and potential financing modalities across humanitarian and development approaches within and outside the forced displacement sector and analyse their potential benefits and various constraints (constraints to both their approach, applicability and benefits in displacement contexts/for displacement-affected communities).

B. Country specific cases (Burundi, DRC, Rwanda, Tanzania, Uganda) and identify innovative financing modalities

Based on the first phase, specific issues will be identified in each of the three target countries (Burundi, DRC, Rwanda, Tanzania, Uganda) together with stakeholders and authorities with the objective for the consultant(s) to develop specific country case studies. Those case studies will contain a thorough review of existing financing modalities and political economy analysis of aid financing in the countries. The case studies will interrogate these current financing modalities against overarching displacement (including the GCR and GRF pledges) objectives and suggest specific context-based financing models/modalities to be used for priority themes identified (i.e. access to services, financial inclusion, social protection and safety nets, graduation model and affordable housing).

Methodology

The methodology will be based on a participatory process including:

● Desk review of secondary data, including recent reports on financing modalities (humanitarian, development, displacement and other sectors) and exploring innovative financing modalities for displacement contexts.

● Key Informant Interviews (KIIs) with ReDSS GL Secretariat staff (region and country level), ReDSS GL members and partners, humanitarian and development donors, ICGLR, UN agencies, MFIs, OECD, private sector actors, research institutes and other identified stakeholders.

● Country specific research through a series of additional KIIs (including with national and local authorities), stakeholder questionnaires, workshops (virtual/in person where feasible).

Expected deliverables

● Inception Report (with PowerPoint presentation) outlining the consultant(s)’ understanding of the Terms of Reference (ToR), methodological approach, and agreed research framework. The inception report will also outline the work-plan and a list of individuals and/or types of organisations the consultant(s) will be interviewing across the first phase of the consultancy.

● Based on extensive desk review and stakeholder consultation review and mapping of different financing modalities report (25 pages maximum without annexes, Calibri 11, single spacing) including:

o Table of contents, glossary of key terms, list of acronyms

o An executive summary (maximum 2 pages) with an overview of existing and innovative financing modalities

o Introduction highlighting the objectives of the research, methodology used, research framework, scope and limitations

o Overview and mapping of different existing and innovative financing modalities including description of modalities, current use, benefits and constraints

o Conclusions, recommendations of the different financing modalities currently in use within the region and globally, could be scaled up or explored in displacement contexts

o Annexes including but not limited to list of key interviews, bibliography of documents reviewed, etc

o Use of graphic tools to demonstrate key analysis and findings

o A short PowerPoint presentation highlighting the key objectives, methodology, key findings and recommendations (15 slides maximum)

● Based on extensive desk review and stakeholder consultations five Country Specific Case Studies (10 pages maximum without annexes each) following similar formatting and structure to previous report but with a specific focus on:

o Overview and mapping of current financing modalities in country including description of modalities, current use, benefits and constraints

o Conclusions, recommendations of the different financing modalities currently in use, could be scaled up or explored in country context/specific sectors

o A short PowerPoint presentation highlighting the key objectives, methodology, key findings and recommendations (10 slides maximum)

● Five country specific reflection and consultations workshops (one day each if in person and/or series of shorter webinars with different target audiences) with key stakeholders to inform business case development.

● Final report for external publication (25 pages maximum without annexes) following similar formatting and structure to previous reports but with a specific focus on:

o Presenting an overview of the research/mapping and analysis into displacement financing modalities

o Final Country Case Studies (8 pages maximum each)

o Key recommendations for different target audiences and recommended next steps

Management and timeframe

The research will be conducted in a period of 60 consultancy days within a span of no more than 4 months. Starting date will be jointly discussed with the selected consultant(s). The consultant(s) will report to the ReDSS Regional Manager and be guided by a Technical Advisory Committees made up of ReDSS members and key external stakeholders at regional and country levels.

Depending on the measures related to the on-going situation with COVID-19, there is a possibility that the primary consultant(s) won’t be able to undertake travel to conduct in-country research. If this is the case, the consultant(s) are encouraged to partner with local researchers who can support stakeholder engagement and, if the situation allows, facilitate in-person workshops with the support of ReDSS GL Country Units.

Required skills and experience

● Master degree in international relations, development, political science and/or economics

● Minimum 10 years proven experience in conducting similar assignments

● Demonstrable experience related to forced migration, durable solutions and humanitarian/development financing

● Strong knowledge of the region and the socio-economic and political dynamics affecting it; more specifically on displacement trends and financing within the Great Lakes region

● Strong analytical and writing skills with proven experience in producing high quality research with ability to present complex information in a simple and accessible manner

● Fluency in written and spoken English

● Fluency is French will be considered an asset

^[1]https://reliefweb.int/sites/reliefweb.int/files/resources/ROSEA_20200220_GLR_Humanitarian_Snapshot_February.pdf

[2] https://www.unhcr.org/comprehensive-refugee-response-framework-crrf.html

^[3]outcome_document.pdf (unmissions.org)

[4] See for example, DAI Europe & Parhelion Underwriting, Innovative Financing for Responses to Refugee Crisis, March 2019.

[5] Norwegian Refugee Council (NRC), Food and Agriculture Organization (FAO) and United Nations Development Programme (UNDP), Financing the nexus gaps and opportunities from a field perspective, June 2019.

[6] Nicholas Crawford and Sorcha O’Callaghan, Humanitarian Policy Group (HPG) Working Paper, The Comprehensive Refugee Response Framework: Responsibility-sharing and self-reliance in East Africa, September 2019.

[7] United Nations (UN), ‘UN Secretary-General’s High-Level Panel on Internal Displacement: Dedicated thematic work streams’, May 2020.

[8] Organisation for Economic Co-operation and Development (OECD), Financing for Refugee Situations: OECD Development Policy Papers (No. 24), December 2019.

[9] International Rescue Committee (IRC) and Development Initiatives, A WIN-WIN: Multi-year flexible funding is better for people and better value for donors, June 2020.

[10] OECD, Financing for Refugee Situations: OECD Development Policy Papers (No. 24), December 2019.

[11] DAI Europe & Parhelion Underwriting, Innovative Financing for Responses to Refugee Crisis, March 2019. See also Overseas Development Institute (ODI), Market-Based Solutions and Innovative Finance: New Approaches to Addressing Humanitarian Needs, March 2018.

[12] Spiegel et al. BMC Medicine, Innovative Health Financing for Refugees, June 2018.

[13] ODI, HPG and Inspire Consortium, Risk-informed approaches to humanitarian funding: Using risk finance tools to strengthen resilience, May 2020.

[14] ReDSS GL was created in 2020 with the aim of maintaining momentum and stakeholder engagement towards durable solutions for displacement-affected communities in the Great Lakes Region. ReDSS comprises 14 NGOs: ACTED, Concern Worldwide, Care International, DRC, IRC, NRC, Mercy Corps, OXFAM, Save the Children, World Vision. The DRC, IRC and NRC form the ReDSS steering committee.

[15] Focus will vary across refugees, IDPs and host communities depending on the country context and include both conflict and climate induced displacement.