Development professionals must prepare to work closer with businesses in the future as private sector investment becomes more prominent on the U.K. Department for International Development’s agenda, according to the chief commissioner of the Independent Commission for Aid Impact.
Graham Ward told Devex that heads of nongovernmental organizations could consider targeting funding applications toward DfID priorities such as the private sector, and emulate business leaders by staying in touch with beneficiaries — or customers — on the ground.
Ward’s comments followed a public debate on aid impact organized by the Africa Research Institute, where he outlined the areas on which the aid watchdog would report in future.
ICAI, an independent body reporting to the U.K. parliament that assesses DfID’s performance and value for money, is about to embark on significant private sector development research following its latest assessment on the issue published in May.
The report said the aid agency had not developed a “realistic, well-balanced and joined-up country-level portfolio of programs” in its private sector development work and recommended DfID do more to understand the barriers and business imperatives faced by the private sector when participating in development activities.
As a result, Ward’s team will begin investigations by meeting with representatives from the financial sector at the end of October.
“What we’re trying to do is get much more into how DfID engages with private sector organizations, and the appetite of the private sector to cooperate with DfID, in order to achieve development objectives,” Ward said. “We’re going to spend a lot of time getting to understand what motivates private sector organizations to stimulate development in developing countries.”
Facilitate and implement initiatives
As part of their drive to assist DfID’s private sector work, Ward said ICAI will meet with all stakeholders to establish “what sort of thing might have to change, either within their organization or within DfID, or in the way in which the developing world is approaching private sector investment, in order to get them involved.”
The chief commissioner explained development professionals need to prepare to facilitate and implement initiatives involving the private sector in the future, as more state and non-state bodies partnered to deliver development programs, and gave the example of Unilever as a “good indicator of what’s going on.”
Indeed, the consumer goods giant signed in September an agreement with DfID to use new social business models to improve health, hygiene and livelihoods for 100 million people by 2025. Unilever’s Sustainable Living Plan aims to double the size of its business but at the same time reduce its environmental footprint and increase positive social impact.
Ward also mentioned the Tata Group, which accompanied opening factories in India with building schools, hospitals and making sure water and energy were available.
“Building schools could well be something a company could contract a development organization to do,” he said. “One of the interesting choices to be made by these countries is, would they want to contract it out to the existing development professional community, to existing NGOs, or would they want to establish their own existing in-house capability to do this sort of thing? That’s one of the questions we can get into in our meetings with these companies,” he added.
The report is due to be published in early 2015.
Assessing DfID impact
Ward’s term as chief commissioner, and those of ICAI’s four commissioners, will end in May 2015 at the same time the U.K. people elects its next government in general elections.
To mark its four years of scrutiny, the body will publish a report on DfID’s approach to development impact.
A key focus of that research will be to make sure DfID commissioners are in touch with the department’s beneficiaries, a best practice that the ICAI chief commissioner underscored should be followed by all development professionals.
“It’s really important for those at the top of the organization who are doing the commissioning to really get out and see what it’s like — that would absolutely apply to NGOs as well,” said Ward. “It’s similar to if you look at retail organizations in the U.K., where the CEO and other members of the boards go out to shops and talk to customers. They understand directly what it is that customers want, what they like and don’t like about the way in which they’re being served by their own particular organization.”
He urged that DfID also needed to learn from NGOs after the issue was mentioned in an earlier report about the agency’s use of contractors to deliver aid programs.
“There wasn’t really a general process whereby the knowledge and experience accumulated by NGOs in implementing DfID programs was being debriefed back into DfID as a whole, so that it could become part of the knowledge base of DfID and, therefore, benefit future programs in similar areas,” Ward said.
Future DfID priorities
Other thematic areas ICAI will identify before May 2015 give an indication of its future priorities for DfID.
These include the International Climate Fund, DfID’s security and justice programming and a particular focus on the challenges faced by women and girls. Ward added that private sector engagement would be “a big one,” and while reluctant to say so directly, he suggested this was an area that development implementers should focus on when applying for funding.
“Were I somebody that was looking to do work for DfID then certainly I would look at what areas are highest on their list of priorities, and the areas where the most major investments are going to be made,” he said.
After May, ICAI’s work plan is uncertain, as Ward has no influence after his departure.
U.K. Secretary of State for International Development Justine Greening has already indicated that Alison Evans, former director of the Overseas Development Institute, is in line to become the next ICAI chief commissioner, and Ward expects sufficient funding under her tenure will continue to be granted by Parliament.
“Given that government and Parliament have both said they find ICAI a really helpful organization that has been established in an independent way and is adding real value, one would expect them both to be providing and approving the funding,” said Ward. “But what the amount would be is not for me to negotiate.”
Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.