Buying goods and services from local suppliers is a more efficient use of aid money, but agencies need to run through checks and be patient for partnerships to bear fruit
Considered in isolation, the idea that aid money should be used to buy local goods and services in the beneficiary country is a no-brainer. Why waste time and funds bringing basic relief items into a country that already has them? Why not maximise aid effectiveness by allowing local businesses - potential drivers of local development in their own right - to benefit?
Local procurement has the potential to create more jobs, increase local capacity, generate greater tax revenues, and take positive steps towards country ownership. Aren't these the objectives stated in the aid effectiveness agreements like the Paris Declaration and the Accra Agenda for Action?
The obvious problem, of course, is that local procurement can't be considered in isolation. Other factors come into play: local suppliers may fail to meet the required quality standards; goods may be available more cheaply elsewhere; donor funding may be misappropriated, or fail to reach intended beneficiaries.[view whole blog post ]