The International Committee of the Red Cross is enmeshed in a financial crisis that has sparked fears and budget cuts, according to internal communications and exclusive disclosures reviewed by PREMIUM TIMES, threatening the ability of the 160-year-old Swiss humanitarian organisation to deliver assistance to people in emergencies around the world, including Nigeria.
“I’m acutely aware that this is a time of anxiety and worry for many of you, and that our current financial situation is weighing very heavily on every part of our institution,” said director-general Robert Madini in a March 23 email response to an open letter by about 2500 staff members of the ICRC. “You have very legitimate questions on how and why we found ourselves in this situation – and just as importantly, what are we doing to get out of it.”
The Red Cross has an estimated field budget of 2.5 billion CHF ($2.7 billion) for 2023, the largest ever, which it is now apparently unable to implement, consequently resulting in the “painful” activities of cutting plans across field operations, internal communications showed.
The 2022 budget report is not available on the organisation’s website but it budgeted 2.37 billion CHF ($2.58 billion) for 2021. However, in his email seen by PREMIUM TIMES, Mr Madini said the 2023 budget is only 0.03 per cent higher than the 2022 budget.
Mr Madini explained that the heavy 20223 budget was a “calculated risk” in response to growing humanitarian needs around the world. “And we took it with the conviction that it would work, based on the information we had at the time, including the support we anticipated from our donors,” he said.
While Mr Madini appeared to blame funding shortfalls and unexpected aid cuts by major donors, insiders told PREMIUM TIMES that mismanagement of funds in Geneva was responsible for the crisis although no evidence was provided for the claim.
Governments and the European Commission are the biggest donors to the Red Cross, with 93.3 per cent contributions in 2021, according to the year’s report. Other sources of funding include public and private donations and the national Red Cross and Red Crescent societies. PREMIUM TIMES understands that the Red Cross also run businesses like the Boma hotels in Kenya, whose revenues flow into running the charity.
“The former president, Peter Maura, approved an unnecessary expansion of projects and recruitments without commensurate financial backing,” a source said. “Staff in headquarters especially Geneva called for an investigation and audit of ICRC finances in the last ten years ”
Mr Madini, too, in his response to the worrying staff hinted at a need to review the organisation’s finances over the years.
“The leadership is also committed to initiating an independent review of how the budget has been managed not just over the past year, but in recent years. Because it is just our clear responsibility to do so,” he said. “The findings of this review will feed into the development of our next Institutional Strategy, to ensure that we are fit for purpose in the years ahead.”
‘A Global Red Cross Panic ‘
As the Red Cross considers cuts that could amount to about 15 per cent of its frontline budgets, humanitarian operations in countries like Iraq, Yemen, Syria, Nigeria, South Sudan, the Central African Republic, Libya, and Afghanistan are to suffer, insiders told PREMIUM TIMES.
This would have a direct impact on millions of people in the affected emergencies.
“Expatriate staff who constitute about forty per cent globally (are) to lose their jobs and those with existing mortgages may lose their houses to foreclosure worldwide,” one source said. “(There is also) panic amongst residents and local staff globally due to fear of downsizing.”
“Nigeria: psychological trauma”
Several thousands of people require humanitarian assistance in Nigeria’s northeast following the campaign of violence by Boko Haram and the counterterrorism measures to stop them. Thousands of families, including children, face malnutrition. The conflict-induced food crisis has been exacerbated by climate change manifesting notably in rapid desertification and the shrinking of Lake Chad that millions of people had relied on for livelihoods.
The Red Cross (ICRC) works in this Nigeria’s humanitarian context as well as other parts of the Lake Chad region – Cameroon, Chad, and Niger – ripped apart by terrorism. This operation may now suffer, staff in Nigeria fear.
Nigeria hosts one of ICRC’s largest operations by expenditure. According to the 2021 report of the organisation, With 75.5 million CHF ($82.4 million), Nigeria was its seventh-largest operation in 2021 after Syria, Yemen, South Sudan, Iraq, DR Congo, and Afghanistan.
PREMIUM TIMES understands that in late March, the head of the Red Cross delegation in Nigeria, Yann Bozon, addressed the staff in an effort to allay worries.
According to sources, who participated in the meeting beamed virtually across the organisation’s offices in Nigeria, Mr Bozon hinted at “downsizing and cutting down of our operations in Nigeria” due to the financial crisis ICRC faces.
One source said, “He (Mr Bozon) said he does not have the details of what will happen, but he is waiting for his proposal to be approved by Geneva. Sometimes in April, those to be affected will be informed and also some departments may be scrapped. He said this is a very difficult period for ICRC and it will give staff any necessary support to navigate the period through the staff health in Abuja.”
The source added that the meeting rather “compounded psychological trauma of staff in Nigeria who have heard from the rumour mill they will be affected.”
In addition, our source said, the monthly stipend called “COLA” that was added to staff salaries in the last seven months to minimize the effect of inflation and the naira swap has been suspended from March till further notice.
Red Cross staff members rarely speak externally about the crisis and even the spokespersons across national delegations are barred from doing so, PREMIUM TIMES understands. Insiders who agreed to be interviewed for this report only volunteered as anonymous sources.
However, in a message to PREMIUM TIMES, a Geneva-based spokesperson for the Red Cross, Juliette Ebele, confirmed the funding shortfall, which she said would affect the organisation’s operations.
“The ICRC has a significant funding gap for 2023 that will have a significant impact on its global operations and it is understandable that ICRC staff are concerned about any potential impact on our humanitarian assistance and on their colleagues,” Ms Ebele said. “At this stage, however, no decisions have been made to reduce our operational activities or staff members in Nigeria.”
“We are looking globally about how we can lower costs and prioritise activities to achieve our humanitarian goals.”
Meanwhile, insiders told PREMIUM TIMES the Swiss government might intervene with a bailout fund to save the ICRC, which is headquartered in the European country.
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