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.
