Evaluation of Danish support to framework conditions for private sector development, 2008-2021

The Evaluation of Danish support to Framework Conditions for Private Sector Development, 2008-2021, was commissioned by the Evaluation, Learning and Quality Department of the Danish Ministry of Foreign Affairs. The Evaluation focuses on the Danish support to framework conditions in four countries (Ghana, Kenya, Mali and Tanzania), with main attention focussing on bilateral support, but also including global and multilateral support from Denmark. A separate thematic study of business advocacy support to Kenya, Tanzania, Ghana and Mozambique was conducted in parallel.

Key findings:

1. Denmark provided in most cases relevant framework conditions support for Private Sector Development addressing private sector needs, although this proved to be especially challenging in a fragile context such as Mali. Denmark has been innovative and rather unique in its initiative to set up BAFs. Nevertheless, the support could have been even more relevant if better use would have been made of political economy analysis and if more multi-stakeholder approaches had been pursued.
2. The Danish support to framework conditions was (with a few exceptions) not based on a clear strategic approach, which is reflected in output-focused and relatively weak programme design. Cross-cutting issues, such as gender, inclusiveness and green growth were insufficiently addressed in programme design, and consequently in implementation.
3. Development contributed to the realisation of a large variety of outputs ranging from strengthened capacity of government and private sector actors to the formulation of new laws, policies, and regulations. There are, however, only few examples of evidence of contributions to intermediary outcomes, i.e., the actual implementation of new policies and practices, improved service delivery and use of infrastructure. Nevertheless, it is plausible that Danish support in specific areas to some extent has contributed to creating improved conditions for an enabling business environment, including greening aspects in Kenya and through business advocacy projects in several countries.
4. For most framework conditions support, there is not enough evidence to determine to which extent the programmes contributed to tangible improvements for the private sector. There are only a few examples of evidence of outcome, i.e. that Denmark contributed to actual benefits for some segments of the private sector in terms of reduced costs, reduced risks or increased incomes or profits.
5. While the support has contributed to enabling the private sector to become a driver of change, there is not enough evidence to determine whether the private sector significantly increased investments and created jobs as a result of framework conditions support.
6. On paper, due attention has been paid to the realisation of synergies between the various types of Danida support to Private Sector Development, notwithstanding that, in practice, there have been many hindrances to realise these synergies. There are a few good examples of internal coherence, but also many examples of missed opportunities to realise synergies.
7. Denmark was considered an engaged and flexible Private Sector Development donor by other stakeholders and followed mainly the international donor agenda, paying gradually more attention to direct support to private sector and green growth.
8. Danish embassies have faced capacity constraints. This led, in some cases, to limited guidance of programme implementation and missed opportunities for enhancing internal coherence. The adoption of the Doing Development Differently approach in Kenya appears promising but requires substantial staff capacity if positive results are to be achieved.
9. The main explanatory factors for the variation in performance of the interventions are the differences in country context, weaknesses in programme design, insufficient political economy analysis, the degree to which the private sector was involved in reforms, inadequate Monitoring & Evaluation systems, and some discontinuity of support.