Thursday’s report from the Independent Commission for Aid Impact (Icai) on the role of business in development should give the international development secretary, Justine Greening, pause for thought.



The past five years have seen a deepening relationship between the UK’s Department for International Development (DfID) and big business. Market-led initiatives have increasingly gained favour over alternative approaches such as supporting the public provision of healthcare and clean water.

Indeed, many of the big DfID programmes of the past few years have focused on fostering partnerships with big multinationals.



This approach has meant partnerships with a long list of multinationals that includes Diageo, Pearson, Unilever, Monsanto, Coca-Cola and SABMiller. Exactly how much DfID is spending on these projects is unknown because of the lack of properly categorised data, a failing that also attracted the “concern and surprise” of Icai. Nevertheless, it is clear that it has risen in recent years, with Icai estimating it at £494m over the period 2012-13 to 2014-15.

To justify this, DfID has waxed lyrical about how the private sector is the “engine of prosperity” and that its priority is to make working with business “part of DfID’s DNA”. Fans of this model said that putting business at the heart of the UK’s aid programme will bring dividends to the poor because DfID money will encourage businesses to invest in ways that reduce poverty. They argue that by putting public money into risky but potentially profitable areas, DfID will “crowd in” other investors, creating a demonstration effect that would result in more economic growth and therefore lower poverty.

The Icai report has raised some fundamental questions about this approach. While the report does say that some forms of private sector engagement have potential, it is highly critical of DfID’s approach to business, giving the whole programme a rating of amber-red, meaning that they were “performing relatively poorly”.

The report says that there is only “limited evidence available on the long term results of donor support for business in development”. It also finds that in some cases the commission is “not confident that DfID’s support is additional to what businesses would have done anyway”. In other words, UK aid money has been used to effectively subsidise big multinationals’ expansion into new markets in Africa and Asia.

Take for example the DfID backed New Alliance for Food Security and Nutrition, whose members read like a who’s who of the global agribusiness industry, including Monsanto, Unilever, Diageo and SABMiller. The initiative, which describes its aims as boosting agriculture and reducing poverty, has led to African governments making changes to government policy that many believe will benefit multinationals and harm small farmers. At Global Justice Now we have long been critical of this partnership, and the Icai report echoes our findings. It states that the New Alliance is “little more than a means of promotion for the companies involved and a chance to increase their influence in policy debates”.

This is not the first time DfID’s commitment to increasing the scope of its work with the private sector has been criticised. Last year, a similarly critical report from Icai warned the government not to treat the private sector as a “developmental panacea”. Parliament’s public accounts committee found that money put into another DfID flagship project, the £700m private infrastructure development group (PIDG) ended up in the pockets of “known criminal fraudsters”.

DfID is effectively using taxpayers’ money to subsidise the public relations strategies of the world’s biggest companies

The unfashionable reality is that multinational corporations exist to make profit. If they can leverage aid money to gain access to new markets in Africa, they will. And they won’t lose any sleep over the fact that their intervention has done precious little to reduce poverty.

While Greening and the government may unshakeably believe that what is good for Monsanto must be good for everyone, there is precious little evidence for the effectiveness of projects such as the New Alliance. DfID is effectively using taxpayers’ money to subsidise the public relations strategies and profit margins of some of the world’s biggest companies. The role of aid should be to tackle poverty and inequality. It should be going to support those who are on the frontline of the fight against these problems – the smallscale farmers, indigenous communities and trade unions – not to those who would use it to augment their shareholders’ bank balances.

Until now, the government could argue that we should give their corporate-driven aid policy the benefit of the doubt. Now it is clear that the experiment has failed, it should focus on what actually works. It can start by putting more money into public healthcare, education and sanitation instead of subsidising the activities of the likes of Coca-Cola and Monsanto.

Alex Scrivener is the policy officer at Global Justice Now.

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