DFID’s Economic Development Strategy Contents

Introduction

1.In January 2017, DFID published its Economic Development Strategy: Prosperity, poverty and meeting global challenges.1 This document built on the Economic Development Strategic Framework of 20142 which our predecessor Committee scrutinised in its 2015 report, Jobs and Livelihoods.3 Although the 2017 initiative is DFID’s first official, self-standing, ‘economic development strategy’, DFID has a tradition of encouraging economic development, including by working with the private sector, starting under the leadership of Rt Hon Clare Short as Secretary of State (1997-2003) with prominent examples such as its support for M-Pesa,4 the ever-expanding, smartphone-based, financing and microfinancing service.5

2.Predecessor Committees have reported on this subject before: in 2006 with Private sector development work6 and the Jobs and Livelihoods report in 2015.7 The Independent Commission for Aid Impact (ICAI) which reports to us, has also contributed to scrutiny of these issues with reviews in the past few years of:

DFID’s Private Sector Development Work (May 2014);8
Business in Development (May 2015);9 and
DFID’s approach to supporting inclusive growth in Africa, A learning review (June 2017).10

In February of this year our ICAI Sub-Committee took evidence from the ICAI Commissioners and DFID on the ICAI review of DFID’s approach to supporting inclusive growth in Africa.11 ICAI has just published its follow-up work on its recommendations from this review.12

3.The Committee and Parliament have also been closely following the work of the Commonwealth Development Corporation (CDC). In 2011 our predecessor Committee looked at the corporation’s future.13 The National Audit Office carried out scrutiny of CDC in 201614 and the Public Accounts Committee reported on it in April 2017.15 Also, our predecessor Committee examined DFID witnesses in relation to the Commonwealth Development Corporation Bill in 2017 (now enacted) which proposed increasing the maximum limit on its investments from £1.5bn to £6bn (with the potential to increase to £12bn without further primary legislation).16 ICAI have recently launched a performance review of how effectively CDC has adapted its strategy and operations to help meet DFID’s economic development priorities and drive growth in low-income and fragile states.17

4.Running parallel to our inquiry, the International Trade Committee has been conducting an inquiry into the UK’s future trade relationships with developing countries, particularly those in the Commonwealth.18 We discuss trade in this report as an integral part of the Economic Development Strategy, but we have tried not to duplicate the work our colleagues are currently carrying out.

5.This report does not seek to summarise or replicate the work that has gone before or to duplicate work in parallel but to build on it, following up on the conclusions and recommendations made in the past. It has been a short inquiry which has involved a call for written evidence and an oral evidence session with CDC and DFID. The aim has been to monitor DFID’s responsiveness to previous concerns and whether new concerns have been raised. In this report we look at the specific issues raised in past reports and the written evidence, such as how the strategy includes support for marginalised groups.

1 DFID Economic Development Strategy: prosperity, poverty and meeting global challenges, January 2017

2 DFID Economic development for shared prosperity and poverty reduction: a strategic framework, 2014

3 International Development Committee, Twelfth Report of Session 2014-15, Jobs and Livelihoods, HC 685

4 M-Pesa is designed to enable customers safely and securely to send, receive and store money via a basic mobile phone. Now at its 11th anniversary it is the world’s leading mobile money service having expanded from Kenya and Tanzania to operation in Afghanistan, South Africa, India, Romania and Albania.

5 Q1

6 International Development Committee, Fourth Report of Session 2005-06, Private Sector Development, HC 921;

7 International Development Committee, Twelfth Report of Session 2014-15, Jobs and Livelihoods, HC 685

8 ICAI, DFID’s Private Sector Development Work, May 2014, Report 35

9 ICAI, Business in Development, May 2015, Report 43

10 ICAI, DFID’s approach to supporting inclusive growth in Africa: a Learning Review, June 2017

11 Oral evidence taken on 7 February 2018, HC (2017-19) 727

12 ICAI follow-up of 2016-17 reports – new review, June 2018

13 International Development Committee Fifth Report of Session 2010–11 The Future of CDC HC 607

14 NAO, Department for International Development: investing through CDC, November 2016

15 “CDC must control costs as it faces new investment challenges” Public Accounts Committee, April 2017

16 Oral evidence taken on 10 November 2016, HC (2015-16) 686, Qq43-46