- Geoff Bennett:The vast majority of foreign aid that’s administered by the U.S. Agency for International Development goes through middlemen, international aid agencies or U.S.-based private companies, that then distribute the assistance.Critics say the system leaves out many deserving locally led start-ups and nongovernment groups.In the second of three reports now, Fred de Sam Lazaro explores the field of health care. It’s part of his ongoing series Agents for Change.
- Fred de Sam Lazaro:For most people in Africa, getting medical care is a nightmare. It takes hours, even days, to reach a clinic or hospital. So, many people must rely on pharmacies, most of them small and family-owned, like the one Kingsley Wills runs in the small Ghanaian town of Tafo Akyem.So, you’re running out of things?
- Kingsley Wills, Business Owner:Yes, we are running out of things.
- Fred de Sam Lazaro:For years, it was a struggle for him too. Inventory wasn’t moving and when vendors came to collect payment, he had special instructions to staff.
- Kingsley Wills:When they come, tell them I’m not around.(Laughter)
- Fred de Sam Lazaro:You had to hide from your suppliers.
- Kingsley Wills:Yes, from your suppliers, because there’s no money to pay.Gregory Rockson, Founder, mPharma: This was completely empty.
- Fred de Sam Lazaro:Then he was alerted to a company called mPharma started by Gregory Rockson, which has an unusual offer to pharmacies.It stocks their shelves and owns the entire inventory.
- Gregory Rockson:Think of it as we — they’re leasing their shelf spaces to mPharma. We make money if you make money. If you don’t make money, we don’t make money.The software tracks.
- Fred de Sam Lazaro:Thirty-three-year-old Rockson returned to his native Ghana 10 years ago and decided to put his education in America and Denmark to use improving health care and technology to carefully stock the small drug stores.
- Gregory Rockson:We built a team of data scientists and analysts that could actually take consumption data from these pharmacies in order to be able to do better planning.
- Fred de Sam Lazaro:MPharma now has a network of some 850 affiliated pharmacies in nine African countries. It’s software monitors what’s moving or what’s needed in any store and can quickly deliver from warehouses like the one in Ghana’s capital, Accra.Beyond pharmaceuticals, mPharma added services, creating health centers, with nurses on staff and doctors on standby. So, when Rosemary Hammond (ph) came in with a splitting headache one recent morning, nurse Patience Ayitey (ph) checked her vitals and saw fit to double-check with one of the 30 mPharma doctors available online.So far, there’s no added cost for the clinical services, which are covered by revenues from drug sales.
- Gregory Rockson:It costs us $350 a month, including the salary we pay for the nurse, the fractional cost of the doctor, because the doctor doesn’t have to be physically located at the site.
- Fred de Sam Lazaro:He says his costs are a fraction of those at the extensive government-built network of community health facilities. These so-called CHPS compounds, many built with USAID funds, have struggled, barely operational for a lack of resources, staff and volunteers, says Rockson.
- Gregory Rockson:There was no business model that would allow these CHPS compounds to actually stand on their own. And in an era where government budgets, because of massive debt burdens, are already under pressure, the first things to get cut are social services.And that’s what we are seeing.
- Fred de Sam Lazaro:It’s one example critics cite of how the system of U.S. foreign aid favors international aid contractors, mainly U.S.-based private companies, which have scant knowledge of local conditions and little collaboration with local groups.Eugene Boadu, Corporate Affairs Director, mPedigree: So much aid has been poured into developing countries like Ghana and most African countries, with little to account for.I think if you talk to the average Ghanaian, I think they do not know that the American people are sending them anything.
- Fred de Sam Lazaro:Eugene Boadu works for a Ghanaian start-up called mPedigree, which is tackling another of the continent’s major health care problems, counterfeit drugs.
- Eugene Boadu:Some of the estimates of the U.N. statistics show that it is more profitable to counterfeit medicine than it is to sell narcotic drugs. So, we are talking about really significant margins here.
- Narrator:It’s important to report all side effects.
- Fred de Sam Lazaro:To combat this, he says, most international donors have paid to set up hot lines Ghanaians can call if they have had adverse reactions to drugs they have purchased. The problem with this approach, Boadu says, few African consumers use mobile apps or call centers, and it’s too late.The product is already circulating in the market, much harder and much more expensive to track down.
- Eugene Boadu:That’s trying to solve a problem in the most — in the most inefficient and the most ridiculous of ways.
- Fred de Sam Lazaro:His company devised a simpler solution, preventing fake products from entering the supply chain in the first place. It produces unique one-time-use codes slapped on every product when it leaves the factory. A customer scratches off the code at the point of purchase and texts it to a toll-free number.In seconds, manufacturer and production date confirm the product is legit, and the whole transaction leaves a digital footprint.They know exactly where you are and how to reach you.
- Eugene Boadu:Exactly. Exactly.
- Fred de Sam Lazaro:Useful in case of a recall due to a manufacturing defect, for example; mPedigree has expanded to 12 African countries. Nigeria, perhaps the worst affected by fake drugs, mandates the system, which is paid for by a small fee imposed on the drug companies.
- Eugene Boadu:Nigeria has brought down its counterfeiting problem from somewhere around a staggering 65 percent to 70 percent, depending on the data you’re looking at, to, last we checked, under 10 percent. And we think that should be the paradigm.
- Fred de Sam Lazaro:A paradigm that could scale enormously, he says, if his company had access to some of those international aid dollars. but he and mPharma’s Rockson complain they’re shut out.
- Gregory Rockson:It is pretty hard for a local organization like mPharma to bid and win any USAID projects.
- Fred de Sam Lazaro:Those grant applications are hundreds of pages’ long, with contracts tens to hundreds of million dollars in scope, and local start-ups aren’t staffed to deal with the exhaustive accounting and reporting requirements. That leaves some-90-plus percent of all USAID grants off-limits to anyone outside a small circle of contractors, many based in Washington.
- J. Brian Atwood, Former USAID Administrator:The U.S. Congress, the General Accountability Office, the OMB, inspectors general.
- Fred de Sam Lazaro:Brian Atwood is a former USAID administrator. He says a lot of people are looking over the agency’s shoulder for every cent of the 30-plus billion dollars it disburses each year.
- J. Brian Atwood:And it is taxpayers money that you’re using. So you have to be very careful.
- Fred de Sam Lazaro:This is fear of corruption?
- J. Brian Atwood:Fear of corruption, no question.
- Fred de Sam Lazaro:He says a chronically understaffed agency is forced to outsource to contractors familiar with the complex process.But mPharma’s Rockson sees corruption in a status quo, where large private contractors work mostly within inefficient government systems in countries targeted for help.So, the American taxpayer, you have said, is abetting a lot of corruption.
- Gregory Rockson:Exactly. You have people that move from USAID with the inside knowledge to join these big development contractors with the inside knowledge on how you win these bids.
- Fred de Sam Lazaro:USAID Administrator Samantha Power declined our invitation to appear in this report. In 2021, when she took office, she pledged to increase the number of dollars that would go to locally led efforts to 25 percent by 2025 and 50 percent by 2030. Nearly four years on, that percentage has barely reached double digits.The agency has moved to simplify the application process and build capacity in local groups so they can apply for its grants, and that has so far made discernible progress in Central America, says Atwood.
- J. Brian Atwood:Something like 1,800 direct assistance grants have been offered to local organizations. And as a direct consequence of that investment, the migration from those countries has gone down considerably. That investment has really paid off.
- Fred de Sam Lazaro:Whether such initiatives continue in the new Trump administration is unknown at this point, but, significantly, Atwood says, the effort in Central America had the support of Senator Marco Rubio, nominated to be the next secretary of state.For the “PBS News Hour,” I’m Fred de Sam Lazaro in Washington.
- Geoff Bennett:Fred’s reporting is a partnership with the Under-Told Stories Project at the University of St. Thomas in Minnesota.
U.S. Foreign Aid
“Little to Account For”
The vast majority of foreign aid administered by the U.S. Agency for International Development goes through international aid agencies or U.S.-based private companies that then distribute the assistance. Critics say the system leaves out many deserving locally-led startups and non-government groups.
In our second report investigating the effectiveness of USAID, we visit two of those locally-led startups delivering health care results without foreign assistance.
90%
of USAID grants are off-limits to small, locally-led groups