Strengthening local systems for lasting impact amid aid disruptions

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OPINION

By Moses Otai

The recent shift in US foreign aid policy under a new administration has sent shockwaves through the global development and humanitarian sectors. While this may have caught some off guard, it has been years in the making. Over the past decade and more intensely in the last five years, many donor countries, especially in the West, have begun reevaluating how they deliver aid, seeking approaches that align more closely with their domestic priorities and demand for accountability.

Rather than relying solely on traditional funding streams to governments and NGOs, donors are exploring alternative methods to deliver social impact. These include social impact bonds, private sector-style investments recouped based on performance and concessional loans tied to measurable outcomes.

Governments like the Netherlands and the UK are increasingly turning inward, redirecting funds to national priorities such as military spending. Philanthropic organisations, too, are evolving, with some like the Mastercard Foundation focusing more on co-creation and results-oriented giving.

Despite this shift, many development and humanitarian actors, particularly in the Global South, continued to operate under business-as-usual models, depending heavily on traditional funding avenues such as PEPFAR and Feed the Future. These programs, which support HIV/AIDS treatment, child protection and food security, provided lifelines but were never immune to the changing winds of foreign policy.

The current disruptions present both a challenge and an opportunity to rethink how social impact is achieved. One clear lesson is the need to embrace and strengthen local leadership and systems. Over the years, many credible local civil society organisations have emerged, rooted in and responsive to their communities. International NGOs, facing reduced funding and presence, can partner with these local actors to sustain impact. This means building governance, management and accountability systems that foster local ownership and effective delivery of services.

In Uganda, the localisation agenda had already gained momentum before recent funding cuts. Organisations like ChildFund have worked with hundreds of local partners globally, including nine in Uganda over the last 20 years, to support child wellbeing. Other INGOs have followed suit, and the time is ripe to refocus efforts on local capacity building, despite financial constraints.

There is also a pressing need to rethink strategies for delivering essential services, particularly to vulnerable groups affected by poverty, conflict and displacement, especially children, women and youth. Governments, as mandated providers of public services, must invest in evidence-based policies and integrated systems to improve social outcomes.

Uganda offers some instructive examples. The Ministry of Health has revamped its approach to community health by transforming Village Health Teams into Community Health Workers (CHWs), focusing on preventive care and integration of HIV services, seeing as standalone clinics face funding cuts. Similarly, the Ministry of Gender, Labour and Social Development, in collaboration with the UN and INGOs, has worked to institutionalise Para-Social Workers to bolster child protection systems at the community level.

Both CHWs and Para-Social Workers are critical frontline actors who, if well-trained and resourced, can connect communities to formal systems and drive results in constrained resource settings. Their integration offers a pathway for governments and partners to deliver on their mandates more effectively.

Citizen empowerment is another essential pillar. Organising communities into structures like Village Savings and Loans Associations (VSLAs) and Savings and Credit Cooperatives (SACCOS) promotes financial inclusion while serving as platforms for education in parenting, nutrition, and children’s learning. The government’s Parish Development Model can be leveraged to enhance these community structures, ensuring service uptake and economic empowerment.

However, none of this is possible without adequate funding for the social sector and robust accountability mechanisms. To plug gaps created by donor withdrawals, such as the reported sh604b ($161m) lost with the USAID closure, Ugandan institutions must minimise wastage and leakages, enforce budget discipline, and embrace collaboration. Parliament must play a strong oversight role, ensuring funds are appropriated responsibly and result in a tangible impact.

In conclusion, while the current aid disruptions are significant, they present a moment of reflection and recalibration. Strengthening local systems, empowering communities and building resilience into development models are no longer optional; they are essential for sustaining progress in an increasingly uncertain world.

The writer is the Country Director ChildFund International, Uganda