A look at aid fragmentation in Lesotho : improving donor coordination through aid mapping

The increase of the fragmentation of aid delivered by the donor community has progressively risen over the last 40 years as lead donorship has declined. Fragmentation has negative consequences for aid efficiency and can reduce the impact that the donors have on development, as well as hurt the long-term economic development of a recipient country. The aim of this research is to see if aid fragmentation can be reduced through the use of aid data mapping tools to increase coordination, efficiency and transparency between development partners and the state. In order to answer this question, this thesis will focus on the case of the Kingdom of Lesotho, who is among the largest consumer of Official Development Assistance (ODA) in Africa. Lesotho has ratified both the Paris Declaration and endorsed the Accra Agenda for Action in 2008. Both of these agreements have sought to reduce aid fragmentation, made during the High Level Forum on Aid Effectiveness (HLF). However, aid fragmentation has increased by about 8.8% since the first HLF meeting in 2003. Aid mapping as a tool has arisen in recent years as a way to increase information sharing and coordination efforts among the donor community, and reduce the fragmentation of aid. The government of Lesotho has sought to create a centralized system to consolidate data on ODA and other flows into Lesotho with the creation of the Public Sector Investment Database for Lesotho (PSID). This thesis seeks to evaluate to what extent the PSID system has helped development partners improve their coordination efforts, and if other countries in the region would benefit from the implementation of a similar system. In order to gain insight into development actors’ perspectives on the PSID system, Skype and phone interviews were conducted within a year of the introduction of the tool. The interviews conducted revealed that there is a knowledge gap between the government and development partners. At the time of the interviews, the majority of local development actors were unaware that the PSID system was in place. However, as the PSID system is still in its infancy, it is expected that with the increase of awareness and trainings on the use of the PSID system, development partners will increasingly use this tool in the future to consolidate data and increase coordination efforts. The thesis concludes with policy recommendations for improvements in the future.