“Challenges of Donors Fund Allocation and Utilization: In the case of Development Response to Displacement Impacts Project Implementing Regions’’

Abstract

This study examined the key challenges faced by the Development Response to Displacement Impacts Project implementing regions in Ethiopia in the allocation and utilization of donor funds. The research employed a mixed-research approach, combining quantitative data from project reports and qualitative insights from interviews with regional government officials and development partners. The study employed a combination of purposive and convenient sampling techniques. The sample size for this particular study was 127 which was selected from the key stakeholders involved in the management and implementation of donor-funded development projects in these regions, including project key and technical staffs, community representatives, and local government officials. The study found that the Development Response to Displacement Impacts Project implementing regions face complex application and approval processes, misalignment between donor priorities and regional development needs, and coordination issues with donor agencies as the major challenges in the allocation of donor funds. The research also revealed that the Development Response to Displacement Impacts Project implementing regions face significant challenges in the utilization of donor funds, including inadequate capacities, compliance issues, disbursement delays, and the tendency to redirect project funds for regular government activities. The study further concluded that the Development Response to Displacement Impacts Project implementing regions have proactively developed strategies and best practices to overcome the challenges in donor fund allocation and utilization. The findings suggest that policy and institutional reforms are necessary to enhance the efficiency, accountability, and sustainability of donor fund allocation and utilization in the context of development projects responding to the impacts of displacement, such as the Development Response to Displacement Impacts Project. Key recommendations include streamlining the donor fund application and approval processes, aligning donor priorities with regional development needs, enhancing coordination and communication with donor agencies, and strengthening the institutional and policy frameworks.