13 Oct 2017   

Public-Private Partnerships in the Development Sector

A Devex report recently looked into five public-private partnerships between government development and aid agencies and private sector companies to address development issues around the world. The report focused on the United States Agency for International Development (USAID), Deutsche Gesselschaft für Internationale Zusammenarbeit (GIZ) in Germany, the United Kingdom Department for International Development (DfID), the Australian Department of Foreign Affairs and Trade (DFAT), and the Japan International Cooperation Agency (JICA).

USAID is the US government’s development arm and manages most of the government’s aid spending. USAID has had over 1,600 partnerships with over 3,000 partners, mostly dealing with infrastructure development. In 2014, USAID teamed up with Belgian pharmaceutical company Janssen to fight multi-drug resistant tuberculosis in developing countries.

Most of the public-private partnerships at USAID focus on hard infrastructure, but there are four major programs in other sectors: Feed the Future (agriculture), Global Climate Change Initiative (environment), Global Health Initiative (health), and Power Africa (energy).

TOTAL AID (2016)	VALUE OF PARTNERSHIPS
$22.3 BN	$20 BN

 

GIZ is the development office of the German government and acts as the strategic adviser to the German Ministry for Economic Cooperation and Development (BMZ). GIZ started the “develoPPP.de” project that allows EU-registered companies to partner with GIZ, and both parties will provide funding and expertise. In 2014, Symrise, a major flavour and fragrance producer, partnered with Unilever and GIZ to empower 4,000 vanilla farmers in Madagascar to produce sustainable and premium quality crops.

Based on robust demand, East Asia received the most GIZ funding for PPPs, $226 million (496 projects), followed by Sub-Saharan Africa with $176 million (303 projects) from 1999-2015.

TOTAL AID (2016)	VALUE OF PARTNERSHIPS
$2.3 BN	$1 BN

 

DfID mobilizes the resources and capabilities of the private sector to contribute to global poverty reduction. DfID provides specialised expertise, funding, and is a source of local information and best practice to the companies it partners with. In 2013, DfID started a global challenge to encourage private companies involved in global value chains to improve the skills of workers in their labour forces. This led to Waitrose, the UK grocery chain, transitioning South African youth from seasonal to full-time work.

TOTAL AID (2016)	VALUE OF PARTNERSHIPS
$12 BN	$715 M

 

DFAT creates partnerships that allow business to positively impact development and give DFAT access to resources and networks of their private sector partners for development work. In 2015, Foreign Minister Julie Bishop signed a three-year memorandum with ANZ Bank that improves access to finance for Pacific Islanders and enables them to participate in the formal economy.

In 2016–17, Australia will provide $2.97 billion in official development assistance (ODA), prioritising infrastructure and trade; agriculture, fisheries and water; governance; education and health; humanitarian assistance; and gender equality in the Indo-Pacific region.

TOTAL AID (2016)

$3 BN

 

JICA works through the government’s private sector investment finance program to provide loans and equity investments to Japanese companies that address development programs. In 2012, Saraya Company Limited, a hygiene and sanitation company, partnered with UNESCO’s Hand Washing for One Million People initiative in Uganda to provide educational campaigns and supplies.

More than two thirds of JICA’s $11.4 billion aid budget for 2016 is allocated to its Finance and Investment account, composed of ODA loans and Private Sector Investment Finance (PSIF), JICA’s principal lending and investment instrument for the private sector.

TOTAL AID (2016)	VALUE OF PRIVATE SECTOR INVESTMENT FINANCE (PSIF)
$11.4 BN	$342 M

 

Read the full report here.

The Aid and International Development Forum will host the 3rd Aid and Development Africa Summit on 27-28 February 2018 in Nairobi, Kenya. The Summit presents an opportunity to explore best practice, policy and project updates, innovation and partnerships in the humanitarian aid and development, advocating for cross-sector approach through inclusive, effective collaboration and coordination between national and international NGOs, government and UN agencies, Red Cross, donors, investors, development banks and the private sector.

Learn more at the Aid and Development Africa Summit website.