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Before Liz Truss was the U.K.’s shortest-serving prime minister, she led its Foreign, Commonwealth & Development Office — and agreed to hugely increase the agency's private sector "financial transactions" in 2024-25. That means, experts tell Devex, that some £600 million from an expected £900 million aid budget increase cannot be spent on front-line aid and development.
Also in today’s edition: USAID launches a new platform to track partnerships, and we give you the lowdown on its plans to spend $25.6 billion.
+ Join us for our two upcoming events this week: On Wednesday, we’ll be hearing from experts on what’s at stake for aid in this year’s U.S. election.
And on Thursday, we’ll have an exclusive conversation with Nisha Biswal, deputy CEO of the U.S. International Development Finance Corporation and one of the most influential voices in U.S. development policy, about the future of development finance.
Truss exercise
Just when you thought the U.K. was on the up aid wise, the small print paints a different picture. Only a third of the recent increase in the aid budget can be spent on front-line development — because the rest of the money must go to private sector assets instead, writes Devex U.K. Correspondent Rob Merrick.
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After years of spending cuts, International Development Minister Andrew Mitchell hailed a welcome turnaround with a forecast 12% rise. That’s about £900 million ($1.14 billion) for 2024-25.
But a closer look reveals around £600 million of that will be swallowed up by a Treasury demand to allocate it to “financial transactions” — meaning private sector investments by British International Investment and other development finance bodies.
The requirement to double these transactions to almost £1.2 billion in 2024-25 was agreed by former Prime Minister Liz Truss when she briefly led FCDO before taking on the top job.
“The FCDO still has its hands tied by the government’s refusal to move on from the Truss-era approach to private sector investment,” Ian Mitchell, a senior policy fellow at the Center for Global Development, tells Devex.
The little-known commitment casts doubt on FCDO’s pledge in last year’s fresh international development strategy to return to making “ending extreme poverty” its central policy aim.
Read: Why most of the UK's aid budget rise cannot be spent on frontline aid (Pro)
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Tricks of the trade
Ever wondered which specific roles are most widely available for aspiring professionals in the global development world? We have a nifty cheat sheet that identifies the positions that have been advertised the most on the Devex job board based on an analysis of postings over the past 12 months. The result provides a snapshot for job seekers of the roles most sought after by development employers.
Download your copy: 7 most in-demand roles in global development (Career)
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‘The gift of data’
Toward the end of USAID's latest business forecast, a director within the agency's private sector engagement hub, Jordan Grover, told the digital crowd she had one last gift for them: The gift of data.
Last week, USAID launched a new platform to track the agency’s private sector partnerships — a portfolio which, as of 2022, included 2,178 active programs in 125 countries worldwide. The platform provides a snapshot into the agency’s work with the private sector, where users can filter by country, category, partner and dollar amount.
The data shows increasing private sector partnerships year-over-year until 2022, when the figure went from a 2021 record-high of 344 to just 186 the year following — the lowest number registered since 2015. It also shows which countries are most heavily laden with partnerships, with Colombia, the Philippines, and Ghana taking the lead.
In line with USAID's business forecast, Devex has also offered up a data gift of its own: an analysis of how the agency plans to spend $25.6 billion in the coming months. Miguel Antonio Tamonan, Devex’s senior data analyst, dove into the numbers. USAID now has 240 funding opportunities in its forecast, totaling nearly $4.8 billion — 15.7% less than the forecast from the same quarter last year.
Eighty-eight of those opportunities are new, with 61 expected to be procured in USAID missions — worth a combined total of $3 billion — and nine in Washington, worth just under $2.7 billion.
Interact with the data: How USAID plans to spend $25.6B in the coming months (Pro)
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Food for thought
The platform isn’t the only new investment USAID is making in the private sector. Last week, the agency launched The Africa Trade Desk, a public-private partnership that connects large U.S. food retailers to producers across the African continent. The partnership is set to push $300 million in export sales between Africa and the United States, USAID said in a press statement, connecting “African suppliers and U.S. retailers by establishing a secure supply chain.” Initially, the agency said it will focus on aggregating specialty food products such as seafood, citrus fruits, and high-value herbs.
Opinion corner
• Francine Pickup, the deputy director of the UNDP Bureau for Policy and Programme Support, explains in her opinion piece why the world must focus on small island developing states and landlocked developing countries this year to ensure sustainable growth for the world’s most vulnerable populations and ecosystems.
• We should challenge our outdated thinking about localization and global mobility, writes Bidjan Nashat of Aequitas Human Capital in an op-ed. When we invest in the right leaders, they will lead local and global change regardless of location.
• Health care cooperatives foster a sense of ownership among health workers, empowering them to contribute meaningfully to the health and well-being of their communities, writes Kenyatta National Hospital’s Dr. Nicholas Okumu in his opinion piece for Devex.
City banter
“What we found is cities with say 1 million people want to talk to cities with 1 million — not other cities that maybe have 20 million — because it's not really comparable.”
— Kelly Larson, injury prevention lead, Bloomberg PhilanthropiesThe Partnership for Healthy Cities — funded by Bloomberg Philanthropies, whose frontman Michael Bloomberg is a former three-term mayor of New York City — brings together scores of metropolises (or is it metropoli?) to focus on reducing noncommunicable diseases such as cancer and diabetes. The idea is that cities can learn from each other (and get seed funding to help combat health risks for residents) by choosing from a list of 14 health interventions including tobacco control and road safety.
While the program’s initial focus wasn’t the peer-to-peer network of cities, sources tell Devex Senior Reporter Sara Jerving that the ability of cities to learn from each other has now become a central focus, engendering multiple summits bringing together hundreds of city workers.
Read: Could city-to-city relationships be the key to urban health?
In other news
At least 18 people have been killed and over 20,000 people displaced since tropical cyclone Gamane ravaged Madagascar last week. [Reuters]
Activists, aid workers, and the United Nations warn of imminent war and a humanitarian crisis in the eastern Democratic Republic of Congo, where 1 in 4 people faces hunger and malnutrition. [Al Jazeera]
A Greenpeace study revealed South Africa as having some of the world's worst emitters of air pollutants, particularly nitrogen dioxide and sulfur dioxide. [Bloomberg]
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About the author
Helen Murphy
Helen is an award-winning journalist and Senior Editor at Devex, where she edits coverage on global development in the Americas. Based in Colombia, she previously covered war, politics, financial markets, and general news for Reuters, where she headed the bureau, and for Bloomberg in Colombia and Argentina, where she witnessed the financial meltdown. She started her career in London as a reporter for Euromoney Publications before moving to Hong Kong to work for a daily newspaper.
