BlogsEventsFeaturesImage galleriesMediaPublicationsAnnual reportAsia White PaperBusinesslinkNewslettersPost Election BriefStatement of IntentTrade matters
Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
If you come across a term that isn't included in the Glossary please send us an email.
The role of the New Zealand Agency for International Development (NZAID) includes:
NZAID is a semi-autonomous agency (SAB) within the Ministry of Foreign Affairs and Trade. Established on 1 July 2002, NZAID is managed by an Executive Director with authority delegated from the Secretary of Foreign Affairs and Trade.
NZAID manages Vote : Official Development Assistance (ODA). In 2008/09 the total Vote : ODA is $481.9 million. This is nearly a 100 percent increase since 2002. The Agency’s operating context therefore is a dynamic one in terms of policy, the international context and institutional growth and change.
NZAID was established as a SAB in order to impart “a distinctive profile and new focus the New Zealand’s ODA programme” (Cabinet Min (01) 28/8), to give greater standing to development perspectives in policy formulation, and to create professionalism around the management of the ODA programme.
The key features of the semi-autonomy agreed by Cabinet are that NZAID has:
The current protocols and responsibilities between NZAID and the Ministry are described in the Relationship Document (2002), some features of which are:
NZAID’s current structure is as set out below.
Recent international development practice has put priority on addressing poverty - including through economic growth. A focus on growth alone can leave many people impoverished, with severe social, human rights and political and security consequences. In 2000 the global community, through the UN, endorsed a set of poverty reduction targets known as the Millennium Development Goals (MDGs), to be achieved by 2015.
Poverty may manifest as unmet basic needs, or a lack of opportunity, or may result from vulnerability to natural or man-made catastrophes. Efforts to reduce poverty may be direct, for example through improving basic services, or indirect, for example through improved governance.
When Cabinet established NZAID it mandated poverty elimination as its central focus, and directed a complete overhaul of policy and the integration of the MDGs into New Zealand’s ODA framework.
Responding to the higher priority accorded to the poverty gap and development challenges on the international agenda, many traditional donors have pledged to increase their ODA: New Zealand has set an interim target of an ODA to GNI ratio of 0.35 percent by 2010/11.
Along with increased volume there has been a major push to make aid more effective through a variety of measures, embodied in the Paris Declaration of 2005 and the Accra Agenda for Action of 2008.
The aid effectiveness agenda stresses 5 principles:
The proliferation of aid donors, with an expanding number of new donors and specialised funds and a rapidly increasing number of aid activities (totalling well over 70,000), poses a great challenge to achieving greater aid effectiveness. New Zealand is responding by itself engaging in fewer, deeper and longer development activities within programmes to maximise its development effectiveness. top of page
NZAID operates to a set of Ministerially approved policies to implement the Government’s strategic directions for ODA.
The Agency has an overarching policy statement and 9 sectoral/thematic policies. The table below illustrates the policies within each category.
Over-arching Policy Statement “Towards a Safe and Just World Free of Poverty” |
||
|---|---|---|
Cross- sectoral policies |
Sectoral policies |
Mainstreaming policies |
Growth and livelihoods |
Education |
Human Rights |
Conflict Prevention and Peace Building |
Health |
Gender |
Governance |
Trade |
|
Environment |
|
|
Ways of working, the ‘how’ of development, are set out clearly, in terms of prioritising people, working with local partners and with other agencies, including governments, civil society organisations, communities and other donors; understanding the local context; using medium to long term planning horizons; and focusing programmes on the following outcomes - fulfilment of basic needs, sustainable livelihoods, sustainable and equitable development and, safe, just and inclusive societies.
NZAID is operating to a set of strategic priorities, agreed with Ministers in 2005, which provide a long-term focus to ODA. These are:
With the above strategic areas as a guide, programmes, whether at a country, thematic or institutional level, are Ministerially agreed engagements comprising a set of activities managed and resourced by the agency related to a development goal, underpinned by a multi-year (generally 5-10 year) strategy and a performance framework.
The Agency operates seven programme types: Major Bilateral Partners; Bilateral Partners; Constitutional Relationships; Regional/Thematic Programmes; Multilateral and Pacific Regional Agency relationships; NZ Agencies; and Funds. Currently there are 33 agreed programmes within these headings as shown below:
TYPE |
PROGRAMME |
PROGRAMME |
|---|---|---|
Major Bilateral partners |
|
|
Bilateral Partners |
|
|
Constitutional Relationships |
|
|
Regional/Thematic Programmes |
|
|
Multilateral and Pacific Regional Agencies |
|
|
NZ Non-Govt Agencies |
|
|
Funds (outside bilateral, regional, thematic and multilateral Programmes) |
|
|
Cabinet directed that NZAID should have a core focus on the Pacific and the Agency has been steadily increasing the proportion of ODA to the region to over 50 percent of total ODA.
Financial Year |
02/03 |
03/04 |
04/05 |
05/06 |
06/07 |
07/08 |
08/09 |
|---|---|---|---|---|---|---|---|
% of ODA going to the Pacific |
39.9% |
44.1% |
47.0% |
49.2% |
52.0% |
53.7% |
53.5% |
Additionally around 80 percent of all bilateral funding now goes to the Pacific, as seen in the following table:
Financial Year |
07/08 |
08/09 |
|---|---|---|
|
$000 |
$000 |
Total Bilateral |
$175,849 |
$204,508 |
Pacific Bilateral |
$137,849 |
$163,708 |
Pacific Bilateral as a % of all Bilateral |
78% |
80% |
NZAID has reduced the dispersal and increased the concentration of New Zealand’s ODA in order to achieve more effective outcomes. Ninety per cent of bilateral ODA now goes to 23 countries, down from 31 in 2002, with a very high proportion going to Pacific and South East Asia country programmes, though smaller regional programmes continue in Latin America and Southern Africa. The number of multilateral agencies supported with core funding has dropped from 27 to 22. The number of countries eligible for scholarships has dropped from 96 to 49.
Particular programme issues to which attention needs to be drawn are:
Successive New Zealand Governments have stated the intention to achieve the international target of 0.7 percent of GNI for Official Development Assistance as and when resources permit.
In Budget 2007, Ministers agreed to a four-year series of funding increases that would see New Zealand report ODA as 0.30 percent of GNI in 2007/08 and 2008/09, rising to 0.33 percent in 2009/10 and then 0.35 percent in 2010/11. By comparison, according to stated intentions by all other OECD donor nations, the average ODA:GNI ratio reported by these countries in 2010 will have risen to 0.56 percent of combined GNI.
New Zealand’s projected percentages have been advised to and published by the OECD DAC. NZAID has committed to a range of programme initiatives based on these levels in line with priorities agreed with Ministers.
The following table shows overall aid expenditure since 2001/02 and the resulting ODA:GNI ratio reported. It includes projected ODA for the next two years as ODA rises to 0.35 percent of GNI by 2010/11.
|
Actual |
Projected |
||||||
|---|---|---|---|---|---|---|---|---|
Year ($m) |
2001/02 |
03/04 |
05/06 |
06/07 |
07/08 |
08/09 |
09/10 |
10/11 |
Vote ODA Departmental |
16.545 |
19.456 |
23.353 |
26.19 |
32.74 |
37.58 |
44.136 |
44.926 |
Vote ODA Crown |
225.578 |
245.562 |
301.968 |
347.66 |
406.13 |
444.32 |
509.27 |
577.78 |
Total Vote ODA |
242.123 |
265.018 |
325.321 |
373.85 |
438.87 |
481.90 |
553.407 |
622.707 |
|
|
|
|
|
|
|
|
|
ODA in other Votes |
25.0m |
35.1m |
38.2m |
38.2m |
38.2m |
38.2m |
38.2m |
38.2m |
Total Reported ODA |
267.123 |
300.118 |
363.521 |
412.05 |
477.07 |
520.10 |
591.61 |
660.91 |
Reported ODA:GNI Ratio |
0.22% |
0.24% |
0.27% |
0.26% |
0.28% |
0.30% |
0.33% |
0.35% |
Approximately 93 percent of reported aid expenditure is from Vote ODA. The majority (97 percent) of the remainder is delivered through three departments: Labour/Immigration New Zealand for the first year resettlement costs of refugees; Defence for a variety of offshore operations in developing countries; and the Ministry principally for subscriptions to a variety of international agencies.
Vote: ODA has four Crown appropriations – Pacific Bilateral, Global Bilateral, International Agencies (funding for multilateral agencies), and New Zealand Agencies as follows:
Programme |
08/09 |
% of Total |
|---|---|---|
Pacific Bilateral |
$222.52m |
51% |
Global Bilateral |
$96.56m |
22% |
International Agencies |
$82.42m |
20% |
New Zealand Agencies |
$32.83m |
7% |
TOTAL |
$434.32m |
100% |
Appropriations do not necessarily match reported expenditure in the Vote (as seen in comparing the two tables above). This is a result of the introduction in the 2004 budget of multi-year appropriations (MYAs). These MYAs apply to the Pacific and Global appropriations only. They are set for three years at a time, and NZAID is able to roll over up to 20 percent of the appropriation in years one and two of each three-year period, and bring forward up to 10 percent of the appropriation in the same years. This approach allows for better planning and ‘smoothing’ of expenditure of what are by definition long-term and complex programmes. It is these rollovers that cause allocations to differ from appropriations. top of page
The current multi-year appropriation (MYA) concludes at the end of f/y 08/09. NZAID will be seeking a further MYA in Budget 2009.
On current GNI projections, this will see Vote ODA rise from its 2008/09 level of $481.9m to approximately $622m in 2010/11.
The dynamic international development context, New Zealand’s scaling up of its aid effort, and the growth in ODA resources have meant that NZAID as an institution has been required to adapt and change, both in Wellington and at posts overseas. The central objective has been to increase the effectiveness and efficiency of the Agency to provide quality advice to Ministers and deliver a quality ODA programme.
Since 2002, there has been growth in capacity in the Agency, with staff numbers changing from 137.6 FTEs in 2002 to 266 FTEs in 2008 - where 171.0 are based in Wellington and 95 are based offshore (including many locally employed nationals). This mirrors the doubling of aid volumes since 2002. Capacity enhancements, such as increasing policy advice capability, the strengthening of the offshore operation and the enhancement of corporate operations, have taken place during this period within the Agency.
Following the Budget 2008 confirmation that ODA would lift to 0.35 percent by 2010/11, NZAID commenced a broader organisational development review. The review, named the Organisational Development Framework (ODF), is assessing how the agency would need to change and organise itself in terms of staffing, structures and systems, including in Wellington and at posts, in order to handle the projected growth. On current projections the agency will be managing 30 percent more ODA funding in 2011 than in 2008.
The ODF has taken a thorough look at NZAID’s operating environment and business model and concluded that re-structuring of the agency will be required in terms of how core and enabling functions are clustered and the tiers of management needed for the larger organisation of the future. Functional gaps and role requirements have been identified.
The proposed new organisation structure is shown below:
Following further consultation internally about the interface between the new structure and the core Ministry, as well as with Ministers, implementation, if agreed, is expected to take 12-18 months.
Growth and the changing public sector operating context for contracting have also imposed considerable strain on business systems and processes. In the 2007 annual audit NZAID was rated “poor” in respect of its control environment and contract management, though no actual risk was realised.
While this finding was borne out by the parallel but broader performance audit of NZAID’s management of overseas aid programmes undertaken by the Office of the Auditor General, the OAG also found that NZAID had a long-term approach to planning, and was working well with its development partners and other international development agencies in setting up and implementing its activities. However, the OAG did note that NZAID staff were often stretched and that the Agency would benefit from additional monitoring and evaluation of its activities.
As a consequence of the findings of both these audits, NZAID has put in place a two-year Control Environment Strengthening Programme (CESP). In the 2008 audit, NZAID’s rating has improved one rating to “needs Improvement”, which is good progress after one year of implementation.
Since its establishment in 2002, NZAID has undergone four key reviews and audit processes. All recommendations have been responded to and have influenced NZAID's proposed organisational structure.
OECD Development Assistance Committee (DAC) Peer Review (2005)
The OECD Development Assistance Committee’s five-yearly review in 2000 identified systemic issues in the management of NZODA which were addressed in the creation of NZAID. The next DAC Peer Review in 2005 found that 'the reorientation of New Zealand's development cooperation has been impressive' and 'the creation of NZAID can be considered a success'. The following significant positive changes since 2000 were noted:
The recommendations were for increased aid levels, the need to match new policies to well-focused programmes and strengthening NZAID's field presence.
The main aim was to ascertain to what extent the Cabinet’s decisions on the establishment of NZAID (CAB Min (01) 28/8) had been fulfilled.
Findings with regard to ODA were generally positive. The review concluded that of the 16 key decisions in the Cabinet paper, 14 were fully implemented and 2 were underway but not yet complete. Of 25 recommendations, six were for Cabinet and suggested that New Zealand should agree on a path by which it might move towards the internationally agreed ODA target of 0.7 percent of GNI, and that ODA policies and strategies should apply to all Government departments and be monitored by NZAID.
Another 12 recommendations applied to NZAID. Key among these were:
NZAID has continued to reassess its programmes to reduce spread and increase focus, as evidenced by the increased ratio of funding to the Pacific, and the fact that the number of activities has held steady or has decreased over the last six years while total ODA has doubled.
NZAID has also developed gender and environmental policies. They have been resourced, implemented and are mainstreamed into programmes and activities.
Other NZAID-specific recommendations were focused around training and NZAID’s relationship with other entities. All have been implemented or are approaches that continue to be observed.
NZAID Funding Arrangements Audit Review Report (October 2007)
OAG’s Performance Audit Report (January 2008)
Between July and September 2007 Audit New Zealand carried out a focussed review of NZAID’s procurement and contracting practices and financial management systems and identified a number of weaknesses resulting in an overall rating of ‘poor’.
During 2007 the Office of the Auditor-General conducted a performance audit of NZAID’s management of official aid programmes. This audit was wider in scope that the Funding Arrangements audit and looked at the planning, implementation, monitoring and evaluation of aid programmes based on a detailed examination of three programmes. The OAG found that NZAID had a long-term approach to planning, and was working well with its development partners and other international development agencies in setting up and implementing its activities. However, the OAG noted that NZAID staff were often stretched and recommended that the Agency strengthen the planning and reporting for monitoring and evaluation of its activities. The audit confirmed Audit New Zealand’s findings around NZAID’s contracting practices/financial management systems.
As a consequence of both sets of findings, NZAID has put in place a two-year Control Environment Strengthening Programme (CESP).
Good progress has been made. In the 2008 audit, NZAID’s rating was improved to the point where financial management is now assessed as ‘good’ by Audit New Zealand and the rating for contracting has moved up one step to “needs improvement”.
In its management letter to MFAT for 2008, Audit New Zealand advised:
“NZAID is on track to full implementation of its Control Environment Strengthening Programme over the two year target timeframe (by June 2009)
There has been a noticeable improvement in the quality of contract management file information being documented, good practice being followed, and improved focus on risk management and observance of probity matters such as recognition of potential/perceived/real conflicts of interest.”
Audit New Zealand noted that there is still work to be done, but concluded that: “NZAID have done well to get to where they are in less than a year. To do this both in Wellington and the challenging environment in overseas posts is commendable.”
