Member's Documents
Evaluation of the AfDB’s Private Sector Development Strategy (2013-2019)
Published by: Independent Development Evaluation, African Development Bank
The private sector is considered a key contributor to growth and poverty reduction in Africa, as it creates nine-tenths of jobs, three-fourths of economic output and two-thirds of investments. The African Development Bank (AfDB) identified Private Sector Development (PSD) as one of the five operational priorities of its Ten-Year Strategy approved in 2013, which focuses on two overarching objectives: inclusive growth and the transition to green growth. As one of the few institutions in Africa that supports both governments and the private sector, the Bank is uniquely positioned to ensure linkages between its upstream policy work and its sovereign and non-sovereign operations (SOs and NSOs). The Bank’s 2013-2019 PSD Strategy had three pillars, namely: (i) improving the investment and business climate; (ii) expanding access to social and economic infrastructure; and (iii) enterprise development.
The evaluation noted that implementation of the 2013-2019 PSD Strategy commenced well during the early years but momentum subsequently stalled, with the PSD Results Measurement Framework not used to monitor progress and the planned mid-term review not undertaken. In 2016, two new institutional initiatives overtook the implementation of the PSD Strategy, i.e., the High 5 priorities and the Development and Business Delivery Model.
In terms of relevance, effectiveness and institutional performance, the evaluation found that:
- The application of the PSD Strategy in the Bank’s African member countries and its contribution to the achievement of the Ten-Year Strategy as well as the High 5s is highly relevant. At the same time, the Strategy had design weaknesses, and it could have defined criteria to better balance the NSO portfolio between operations through financial institutions and real sector operations.
- While SOs satisfactorily supported improvements in the investment and business climate, the effectiveness of NSOs varied depending on the sector supported. Although linkages between SOs and NSOs were important, they were rare, and evident only in some case study countries.
- Institutional performance indicators focussed on key aspects of the Bank’s effectiveness and efficiency, but this data has not been publicly available from 2016 onwards. The Bank did not report on its SO and NSO PSD portfolio in an integrated manner. In addition, there were only a limited number of operations in the 2013-2019 approval list for which completion reports and validated completion reports were available.
To inform the design and implementation of the new PSD Strategy, which is expected to be completed and become operational in 2020, the evaluation made the following recommendations:
- The institutional arrangements for PSD operations in the Bank should be adapted in order to maximize its impact in regional member countries;
- Linkages between the Bank’s PSD sovereign and non-sovereign operations at country/regional level should be strengthened;
- An in-depth analysis of the effect of NSO operations on Small and Medium Enterprises needs to be carried out;
- Increase the Bank’s PSD operations in low-income and transition countries; and
- Improve the quality of PSD Strategy design, management, measurement and reporting of results.
