Africa Analysis: Global finance crisis will hit grants

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The global financial crisis may soon make external funding much harder to get, warns Linda Nordling.

In the face of the global financial crisis, African scientists should start applying for funding while there is still some going around.

Foreign funding is important for African science. It pays for much of the best of it — for example, testing the PRO 2000 gel which recently gave hope to women wanting to protect themselves against HIV infection (see Microbicide hope at last, say researchers).

It is also important in re-building universities and research communities on the continent — although the ensuing dependence on overseas donors remains controversial.

A decline in external funding would have seemed far-fetched a few years ago when donors were falling over one another to pledge support for African science. But with the global financial crisis, things are looking less rosy.

Will science suffer?

In October 2008, Kenyan anthropologist Richard Leakey said that the financial crisis would be "just devastating" to science. Not only will companies and governments have less money to spend on research and development (R&D), but philanthropists and aid agencies are also likely to cut back support, he said.

According to Leakey, the decline would start to be felt this year. But while funding is likely to become a bit tighter, the effect this year may be a lot less than imagined.

Foundations that finance their grants through interest paid on assets held in global financial markets have been hit hard, but many are not making immediate funding cuts. For example the Bill and Melinda Gates Foundation, which saw its total assets shrink by 20 per cent last year, is still planning to increase its payouts in 2009.

If this means eroding the foundation's asset base more quickly than planned, so be it, wrote Bill Gates in a January staff letter, saying: "The goal of our foundation is to make investments whose payback to society is very high rather than to pay out the minimum to make the endowment last as long as possible".

Other US charities, including members of the Partnership for Higher Education in Africa, are taking a similar line. They too deny that spending will fall in 2009, although a spokesman for the Carnegie Corporation said that beyond the end of its financial year in September, things are as yet unclear.

Others have brought out the scissors. The Wellcome Trust, a UK medical charity, saw its assets drop from £15.1 billion in September 2007 to £13.1bn the following year. The weakness of sterling is an additional headache, making international projects, including those in Africa, more expensive to fund. The trust says it will pay out £590 million in grants this year — a £30m cut from 2007/08. The result will be tougher competition for funding, it says.

Government promises

But if the charity sector is facing a lean year, it is far from clear how the financial crisis will affect governmental aid agencies. Before the credit crunch, many of them promised to increase their spending on science in Africa.

On paper, at least, most remain committed. Ivan Lewis, the UK's minister for international development, recently reiterated a pledge to spend 0.7 per cent of gross domestic product (GDP) on development aid by 2013. And the Canadian International Development Agency says it's on target to double aid to Africa by 2011.

But many doubt such claims. Having dragged their feet in times of plenty, they ask, how likely are government aid agencies to keep their promises in hard times?

Even if aid budgets grow, they may not go to science. The crisis — which Trevor Manuel, South Africa's finance minister, says will hit developing countries hard — could increase the need for humanitarian aid like food and healthcare. This could in turn starve less pressing projects like university reform.

Lean times ahead

Meanwhile, on the ground, research institutes are digging in for tough times ahead. "With countries facing GDP decline we are planning more conservatively," says Liz Ogutu, resource mobilisation officer for the International Livestock Research Institute.

Projects that are in the middle of their funding cycle, such as the Millennium Science Initiative in Uganda, don't have cause to worry — yet. But it will no doubt be tough for programmes looking to replace grants that are nearly ended — such as the African Mathematics Millennium Science Initiative which has a Mellon Foundation grant ending this year.

Still, there is a silver lining for African researchers who are confident competing against overseas teams for funding. The 'crisis package' signed into law by President Barack Obama earlier this month (February) features a hefty biomedical research funding boost. The money will be distributed by the US National Institutes of Health, which gives many grants to African researchers on the continent.

There is political pressure for the stimulus package to be spent inside the United States. But "traditionally, science funding has been relatively immune from 'Buy American' pressures that affect other types of spending like government procurement or transportation projects", says Kei Koizumi, R&D budget analyst for the American Association for the Advancement of Science.

All things considered, 2009 seems unlikely to bring the devastation Richard Leakey predicted. But it may only be a temporary respite. All funders and recipients interviewed for this column said that how much damage the financial crisis causes will depend on how long it lasts. The major funders could probably weather it for a year — maybe two. But if it lasts longer than that, all bets will be off.

Linda Nordling is former editor of Research Africa.