After DFID review: Nairobi-based UN-HABITAT’s fortunes to decline

The fortunes of the Nairobi-based United Nations Human Settlements Programme (UN-HABITAT) could change drastically in the wake of a damning report by the UK’s Department of International Development (DFID) that suggests that the organisation is riddled with irregularities. In a move that has been described as ‘a major shake-up of Britain’s aid programme’, the international development secretary announced early this month that it will stop core funding to four UN agencies, among them UN-HABITAT. The others are the UN Industrial Development Organisation (UNIDO), the International Labour Organisation (ILO) and the UN International Strategy for Disaster Reduction.

UN-HABITAT is one among several UN agencies that have received a bad scorecard from the bilateral donor. DFID’s review of 43 multilaterals found that that many UN agencies and other multilaterals consistently fail to deliver results on the ground, particularly in fragile states, partly because of lack of results-based management, including human resources management. More than two-thirds of the multilaterals assessed were found to be weak in strategic and performance management. Moreover, quite a large number were not sufficiently focused on driving costs down and reducing waste. The review also found that most of the multilaterals reviewed did not pay much attention to gender issues and that ‘there is still much room for improvement for the multilaterals as a group on transparency and accountability’.

DFID’s Multilateral Aid Review report, dated March 2011, is part of a larger effort on the part of David Cameron’s coalition government to provide ‘value for money’ to Britain’s bilateral and multilateral aid programme. In a strongly worded statement, Andrew Mitchell, the international development secretary, said that Britain will take a ‘very tough approach’ with organisations that are found to be weak in a number of key areas and that DFID ‘will not tolerate waste, inefficiency or a failure to focus on poverty reduction’.

DFID found that only nine of the 43 multilaterals reviewed offered ‘very good value for money’. Among these were the UN Children’s Fund (UNICEF), the Global Fund to Fights AIDS, TB and Malaria and the Global Alliance for Vaccination and Immunisation (GAVI), all of which will see an increase in British aid in the coming years.

UN-HABITAT was established in 1977 with the aim of improving housing for the urban and rural poor. In recent years it has shifted its focus to making cities more sustainable and is considered the lead agency in the implementation of the Millennium Development Goal of improving the lives of slum dwellers worldwide. It is also one of only two UN headquarters based in a developing country (Kenya); the other is the UN Environment Programme (which, incidentally, also did not score very highly in the DFID review).

The review found that UN-HABITAT performed unsatisfactorily in two critical areas: strategic and performance management and cost and value consciousness. The review says that UN-HABITAT has a poor record of institutional performance and transparency. It states: ‘UN-HABITAT does not operate under a presumption of disclosure. It provides some information on projects to the governing body, but does not publish full details on project performance.’ Even more critically, DFID says that the UN agency charged with improving the lot of slum dwellers worldwide ‘is not demonstrating a significant contribution’ to this goal.

In 2009, UN-HABITAT received voluntary core contributions of $20 million, including £1 million from DFID. DFID says it did not receive a breakdown of how the money was spent from UN-HABITAT, so had to rely on other sources to find out.

The decision by DFID to stop funding to UN-HABITAT should be of concern to African countries that have, through UN-HABITAT’s governing council, consistently fought for more support for the organisation, and have been instrumental in endorsing the continued appointment of the former executive director, Anna Tibaijuka, a Tanzanian national, who headed the organisation from 2000 to 2010. (Tibaijuka is now minister of housing in President Jakaya Kikwete’s government.)

Mass withdrawal of funding to UN-HABITAT could not only severely impact its programmes and projects, but could also dent the image of Tibaijuka, who prided herself on raising the profile of the UN agency and increasing total contributions to the organisation threefold during her tenure. The DFID review was conducted when she was still in office, hence any shortcomings within the organisation could be directly attributed to her leadership and management style, which some insiders claim was authoritarian and secretive.

DFID’s assessment of the current head of UN-HABITAT, Juan Clos, is also not very optimistic. A DFID report dated February 2011 states that the arrival of the new executive director in October last year may not lead to any change in the organisation’s management culture, which has been ‘resistant to change in the past’, adding that any change will require ‘ambitious reforms’, which seem ‘uncertain’ in the current set-up. It concludes that ‘while some reform efforts are underway, the organisation’s track record on improvements is not strong.’

The DFID review may force UN agencies to be more vigilant about fraud and corruption, especially in light of the fact that several large donor countries, including the United States, are talking of cutting funding to the UN until ‘sweeping’ reform measures are undertaken. The US has cut funding to the UN in the past: in the 1990s, the head of the Senate Foreign Relations Committee, Jesse Helms, succeeding in blocking all US funding to the UN. And in 1997, the then head of UN-HABITAT, Wally N’Dow, was forced to leave the organisation after UN-HABITAT’s governing council, led by key Western donors, found several irregularities in the way funds were used.

A senior UN-HABITAT official, who did not wish to be named, told this correspondent that it was unfortunate that Clos inherited problems caused by what he called ‘the poor leadership of his predecessor’, but that the problems facing UN-HABITAT are hardly unique to the organisation and can be found throughout the UN system. ‘One of the reasons UN-HABITAT and other agencies continue performing poorly is that they do not allow themselves to be audited externally,’ he said. ‘This allows for a lot of room for corruption.’

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