The premier development agency for the world’s second-biggest bilateral donor, the U.K. Department for International Development channeled 9 percent of its aid expenditure through private sector partners in 2011-12, the latest year when those figures are available.
The latest peer review of the U.K. aid program by the Development Assistance Committee of the Organization for Economic Cooperation and Development confirmed that DfID has been increasing its use of private sector partners since then. In fact, the report found that in Nigeria, the fifth-biggest recipient of U.K. aid, DfID channels 75 percent of its funding through private sector companies — well above the global figure.
Amid the U.K. government’s drive for more value for money in its aid program, DfID’s private sector partners have come under intense scrutiny in recent years. Early in 2013, DfID unveiled a new code of conduct for suppliers, part of its efforts to tighten procurement controls.
Later that year, a report from the Independent Commission for Aid Impact, the British aid watchdog, found that DfID’s private sector partners performed relatively well against ICAI’s criteria for effectiveness and value for money, even as it pointed out weaknesses in the U.K. aid agency’s procurement process.