In recent years, DFID has set about rebalancing its aid portfolio towards the promotion of economic development as the engine of poverty reduction. From its traditional focus on social services, the department has worked to build up its knowledge on the drivers of and constraints on growth. Its economic development portfolio has doubled from £934 million in 2012 to £1.8 billion per year. The portfolio is diverse, covering the business environment, infrastructure, the financial sector, agriculture, industrialisation and urbanisation, among other areas.
The purpose of this learning review is to assess how well DFID has gone about learning what works in the promotion of economic development, and how far it has come in developing credible portfolios of programmes that are adapted to the opportunities and challenges in the countries where it works.
We have chosen to focus on Africa. While parts of Asia have seen dramatic declines in poverty in recent decades, driven by mass employment creation, this dynamic is yet to be replicated in Africa. Africa has enjoyed a period of relatively buoyant economic growth over the past two decades, based on strong global demand for its primary resources, although this has slowed since 2014. However, the continent’s growth has been largely jobless in nature and has not translated into large-scale poverty reduction. An estimated 10-12 million young Africans enter the labour force each year, but only three million find formal sector jobs.
We awarded a green-amber score and made four recommendations.