This report presents a Value for Money (VfM) assessment of DFID contingency funding that was provided early in the Ethiopia 2015/2016 drought. The study finds that timely funding for the full food requirement could have avoided additional costs of between US$127 million – US$271 million as compared with late procurement. The economic cost of no response could more than double this estimate.
Timely procurement with DFID funding in this crisis is estimated to have avoided an additional US$6.3 million-US$7.4 million that would have been incurred by later procurement, an overall saving of approximately 18 percent. While the study findings indicate that DFID contingency funding provided early in the crisis has played a significant role in delivering VfM gains, it also indicates that the costs associated with the remaining deficit could measure in the hundreds of millions of dollars in procurement and economic costs.
This analysis shows the necessity for funding models to respond to the first signs of a crisis. Flexible funding, for example through multi-year humanitarian funding models with built-in contingency mechanisms, can allow shifts in funding depending on need and can help to stimulate more timely response resulting in significant cost savings.
This report was funded from a DFID programme entitled ‘Building resilience and responding to crises in fragile and conflict-affected states: A thematic evaluation of DFID’s multi-year approaches to chronic/protracted humanitarian crises in the Democratic Republic of Congo, Ethiopia, Sudan and Pakistan’
Cabot-Venton, C. The Economic Case for Early Humanitarian Response to the Ethiopia 2015/2016 Drought. Valid Evaluations, Oxford (2016) 33p