Evaluation of Norwegian Business-related Assistance Main Report

Preface

There are signs that a shift may be coming among donors towards more emphasis on the private sector. This report from our evaluation of Norwegian development aid to business-related activities may therefore come at an opportune time.

The report is prepared by the Swedish consultants Devfin Advisers AB, and it covers Norwegian development cooperation to promote and develop the private sector in partner countries over the last 10-15 years, an area to which successive governments have expressed a high priority. It is a comprehensive evaluation that reviews an array of mechanisms and channels. The report is clear in its findings and specific in its recommendations. The consultants have aimed at quantifying results and impact of the Norwegian support, although they wisely enough give us “in the order of”-figures rather than exact numbers.

The findings are positive as far as the overall outcome of business-related aid is concerned. Some achievements are remarkable, like the Norad loans to Grameen Phone in Bangladesh, the micro-finance schemes in Uganda, but also the development of Norfund into a world leading agency in its field. Schemes through Norad – like the Matchmaking Programme – have also created jobs. Such schemes have been very successful in mobilising Norwegian enterprises, more so than in fostering business and economic development in partner countries. Part of this support may, according to the team, have been administered in a too “liberal” way. Support from the embassies seems to be very much a mixed bag. Some solid results have been achieved, but the embassy level support gives the impression, in the words of the evaluation team, of many different forms of assistance with limited synergies between them.

The evaluation team also draws some conclusions regarding institutional aspects. The administrative reform in Norwegian development cooperation in 2004 had some negative consequences for this sector. The department in charge of private sector development in Norad has suffered from an unclear role, and embassies are too short staffed to be effective designers and supervisors of support to the sector. The report proposes a reorganisation of private sector support within the aid administration.

One weakness of the report may be that the evaluation has not addressed support to the “enabling environment” for the private sector. That is not the fault of the consultants, it was not included in the terms of reference. The issue is fortunately covered in the recommendations.

Let me say finally that this report is part of our continued efforts to document development results, which we believe it does in an exemplary way.