NGO’s in Developing Countries

28/08/2022 0 By indiafreenotes

Donor agencies increasingly support NGOs in providing services to the poor in Third World countries where markets are inaccessible and where governments lack capacity or resources to reach the poor. In most Third World countries including those in Africa, both states and markets are weak or in decline. In Africa, the persistence of the dual crises of weak states and nascent or declining markets pose a classic dilemma for proponents of either market- or state-led economic development. The failure of both markets and governments in Africa to deliver economic development has contributed to the rapid growth and expansion of NGOs on the continent.

Evidence accumulated over the past three decades shows “the inability of the African State to deliver on its development promise. “In fact, the African State is now perceived as “The inhibitor of social, economic, and political development. “The demise of the African State has inevitably given rise to the ascendancy of NGOs to fill up the “Development vacuum” that has been created. The expansion of the NGO sector in Africa is most clearly reflected at the country level. For example, in Kenya there are about 500 NGOs and in Uganda there are more than 1,000 registered foreign and indigenous NGOs. Similarly, other African countries have a large number of active NGOs. These countries include: “Zambia with 128, Tanzania with 130, Zimbabwe with 300, and Namibia with over 55.”The growing role of NGOs in all sectors of development is an indication of the decreasing capacity of the African state to undertake meaningful development. Besides increases in NGO numbers, the amount of development resources they receive or handle for development purposes has grown over the years. It is estimated that “official aid to Kenyan NGOs amounts to about US$35 million a year, which is about 18 percent of all official aid received by Kenya annually [and] . . . in Uganda, NGOs disburse an estimated 25 percent of all official aid to Uganda.”

The weakening financial situation of Uganda and Kenya, like that of other African countries, is due to a combination of huge external debts, corruption and the effects of structural adjustment programs imposed by the International Monetary Fund (IMF). In particular, the structural adjustment programs have “strained the ability of the African states to provide services and has attracted more NGOs to cushion the adverse short-term effects of adjustment programs, such as by providing affordable healthcare services.”30 Given the prevailing political and economic conditions in Uganda and Kenya, as well as elsewhere in Africa, the role and contribution of NGOs to the development process is expected to increase.

Donor agencies increasingly funnel development assistance through NGOs and other non-state institutions because the states in Sub-Saharan Africa are considered both inefficient and corrupt. As Dicklich observes, the “failure of the [African] state to provide for basic services has led to many official donors to use NGOs rather than the local state to provide services.”In Uganda, a succession of inefficient, violent and corrupt regimes since 1971 has contributed to the emergence of over 1,000 indigenous NGOs to provide self-help solutions to the poor. Most “Ordinary Ugandans have had to fend for themselves, relying on organizations outside of the state rather than on the state itself to provide basic necessities. “In general, most service-oriented NGOs have generally “moved into service provision where the state has moved out. “No doubt, NGOs have been necessary in Uganda and other African countries to fill up the “Developmental gaps” caused by the weak post-independence state.

While African States have become increasingly weak, formal markets have steadily declined and in some cases have been replaced by informal or parallel markets. According to Callaghy, most African economies are faced with

“Declining or negative rates and stagnating or falling per capita income figures; balance of payments and debt problems (which have become more severe (since) the 1980s, requiring IMF and the World Bank programs with their attendant conditionality packages and consequences. Many (export) commodity prices remain low while most import prices remain high. In many countries, agricultural production is falling while aid levels stagnate. Health and nutrition levels are falling while informal or magendo economies (have) become more important as states weaken and formal markets decline. ‘Socialist’ states have performed poorly and ‘capitalist’ ones are not significantly better. Hopes for economic growth and development have shriveled on all sides.”

In Uganda and other African countries, authoritarian regimes “induced an ‘exit’ from the formal economy [as well as] a general avoidance of state institutions by a wide range of groups and occupations. “Furthermore, economic restructuring due to structural adjustment programs and privatization contributed to the retreat of African states from their responsibilities of promoting economic development and providing “basic social services such as health care, education, sanitation and basic security,. . . “Given the weak private sector and the state withdrawal from the provision of basic economic necessities and social services, “many NGOs are being pressurized into dealing with poverty alleviation (not eradication), and the provision of basic social services . . .”Thus, NGOs increasingly fill in social and economic spaces created by weak markets or retreating states. As a result, “NGOs have been heralded as . . . new agents with the capacity and commitment to make up for the shortcomings of the state and market in reducing poverty.” Some critics of NGO participation in economic development contend that such involvement provides legitimacy and support to governments that have failed to deliver economic development or provide basic social services to their citizens. Other critics charge that NGOs save “donors money and allow them to avoid addressing implementation difficulties, while also allowing them [the donors] to retain ultimate control over activities.”

The absence of viable states or markets in most Third World countries including African states has left NGOs as the most important alternative for promoting economic development. Thus, the failure or inability of both states and markets to meet the basic needs of the majority of the people in the Third World has given rise to the growing importance of the NGO sector in the development process. Such inability has also exposed the inherent limitations of the state or private sector as major agents of promoting economic development in the Third World.


The rapid growth and expansion of NGOs worldwide attest to their growing critical role in the development process. At the international level, NGOs are perceived as vehicles for providing democratization and economic growth in Third World countries. Within Third World countries, NGOs are increasingly considered good substitutes for weak states and markets in the promotion of economic development and the provision of basic services to most people.

NGOs are seen by their proponents as a catalyst for societal change because they are responsive to the needs and problems of their clients, usually the poor, women and children. Because of targeting and being responsive to marginalized groups in society, NGOs are being heralded as “important vehicles for empowerment, democratization and economic development. “In fact, some NGOs are “driven by strong values and . . . interests . . . , geared toward empowering communities that have been traditionally disempowered. “International donor agencies see NGOs as “having the capacity and commitment to make up for the shortcomings of the state and market in reducing poverty. “Perhaps the greatest potential NGOs have is to generate self-help solutions to problems of poverty and powerlessness in society. This is based on the view of NGOs as independent, “efficient, less bureaucratic, grassroots oriented, participatory and contributing to sustainable development in grassroots communities. “But for NGOs to remain independent of donor or elite control and achieve their social and economic goals, they have to work diligently toward capacity building and financial sustainability.

NGOs are increasingly playing an important role in the development process of most Third World countries as discussed in section three of this paper. The growing importance of NGOs in the development process is attributed to the fact that they are considered suitable for promoting participatory grassroots development and self-reliance, especially among marginalized segments of society-namely, the poor, women and children. In fact, some NGOs seek to organize and involve the marginalized groups in their own development. And sometimes, they try to link their clients to the powerful segments of society by providing access to resources that are normally out of reach to the poor. For example, within development-oriented NGOs, microfinance institutions (MFIs) try to contribute to the economic improvement of the poor by: “bringing in new income from outside the community, preventing income from leaving the community, providing new [self] employment opportunities and stimulating backward and forward linkages to other community enterprises.”