The humanitarian sector is facing an ongoing challenge of balancing the need to provide emergency assistance with the desire to promote local ownership and sustainability. In recent years, there has been a growing recognition of the importance of localised procurement in achieving these objectives. However, many in the sector have focused on the barriers that prevent the full realisation of localised procurement in the aid sector.

This is the first blog in a forthcoming series about localised procurement. This blog will summarise and discuss the barriers to localised procurement in aid. The series will end with my analysis and call to action: why donors and funders are the real drivers for change.

Local procurement in humanitarian aid

Local procurement refers to sourcing goods and services from suppliers rather than relying on external sources. Data and research have shown that over 2/3 of our aid supplies are still flown internationally. The concept of local procurement is based on the idea that local procurement can support the local economy and build the capacity of local organisations and economies. Local procurement is also presented as being more cost-effective and efficient. However, several barriers, as listened to by many in the past (and used as arguments for the sector’s inability to change systematically), prevent the widespread adoption of localised procurement in the aid sector.

The limited capacity of local suppliers and quality concerns

One of the often-cited main barriers is the limited capacity of local suppliers, manufacturers and organisations to meet the procurement requirements of the international aid sector. Lacking specific technical expertise or resource to meet the procurement requirements of international NGOs and donors make it difficult for them to compete with larger, more established international suppliers and wholesalers. Also, concerns around quality standards and the ability to comply with international standardisation are critical barriers for international NGOs to procure locally. Additionally, local actors may have different access to financing and resources than more prominent actors, making it challenging to provide the necessary goods and services.

Complex donor regulations and requirements for procurement

Another barrier to localised procurement is the complex donor regulations and requirements for procurement processes. Donors often have strict rules and regulations around procurement, which can be difficult for local organisations to navigate. These regulations can be particularly challenging for businesses, suppliers and other actors in LMICs (Low and Middle-Income countries) that may not have the same familiarity with international standards and practices.

Lack of trust and accountability

Trust (lack of) and accountability between donors and local actors is another significant barrier to localised procurement. There might be a reluctance to work as local as possible (as per Grand Bargain objectives) for fear of accountability and reputation. This fear regarding reputation and accountability issues comes with a growing demand (internal resources) by the (International) NGOs to have a solid framework and capacity in-house to validate suppliers locally in all locations (with dedicated due diligence processes). Local actors, in turn, may be hesitant to work with the sector because of concerns about financial risk or payment conditions.

Limited availability

The limited availability of local suppliers and vendors is another obstacle to localised procurement. It is argued that many goods and services needed in humanitarian operations may not be available from local suppliers, making it challenging to source goods and services locally. This can be particularly true in remote or conflict-affected areas, where supply chains may be disrupted. With current budgets, individual NGOs do not have a complete overview of all suppliers in all domains and all locations globally.

Language barriers

Finally, language and cultural differences between local organisations and international donors can be significant barriers to localised procurement. Effective communication is essential for successful procurement processes, and misunderstandings can lead to delays and other problems. Cultural differences can also create misunderstandings and mistrust between donors and local organisations.

Growing recognition of the need for localised procurement

Despite these barriers, there is a growing recognition of the need for localised procurement in the humanitarian sector. One of the critical benefits of localised procurement is that it can support local economic development and build the capacity of local organisations. By sourcing goods and services locally, donors can support local businesses and communities, which can help to promote self-sufficiency and sustainability.

Localised procurement can also be more cost-effective and efficient than relying on external suppliers. Local suppliers may have lower costs for goods and services, and they may be able to deliver them more quickly and efficiently than international suppliers. This can help reduce the time and cost of procurement processes, which can be critical in emergencies.

Another benefit of localised procurement is that it can promote greater collaboration and partnership within the humanitarian aid sector. By identifying and addressing procurement needs, actors can build stronger relationships based on trust and mutual respect. This can help to promote greater accountability and transparency in humanitarian operations.

Conclusion

In conclusion, while there are many barriers to localised procurement in the aid sector, the need for it is increasingly recognised. Localised procurement can support local economic development, build the capacity of local organisations, and promote greater efficiency and collaboration in humanitarian operations. Donors and international actors should work together to overcome these barriers to localised procurement. Are those structural limitations or arguments not to move forward? I’ll talk about what is done and should be done in future blogs in this series. and