“Economic development is, without question, the only way countries can leave behind enduring and chronic poverty for good,” said Secretary of State for International Development, Justine Greening, as she outlined her department’s new approach to support growth and create jobs in developing countries in a speech at the London Stock Exchange.
DFID has been restructured under Ms Greening to focus on jobs and growth and will now be more than doubling the amount that they invest in this crucial area to reduce aid dependency. Britain will also be partnering with leading companies to improve business conditions in Africa and South Asia and help drive more investment into frontier economies.
DFID’s new approach, outlined today in Justine Greening’s speech, means DFID will:
- More than double aid spending on economic development.
In 2015/16 DFID will plan to target £1.8 billion of its budget on economic development, more than doubling the amount spent in 2012/13. This is on top of indirect funding through core contributions to multilateral organisations
- Partner with 12 UK high street names to improve working conditions and job opportunities for more than 700,000 workers and smallholder farmers in Kenya, South Africa and Bangladesh.
This will include working with Sainsbury’s to help workers gain qualifications; Marks and Spencer to develop leadership and management skills for farm workers; Debenhams, Primark, Asda, River Island, John Lewis Partnership, C&A, M&Co, Next and Morrisons to improve management in Bangladeshi garment factories; and Tesco and Asda to invest in young fruit farm workers from disadvantaged backgrounds in South Africa.
- De-risk business investment in frontier economies by backing investment insurance in frontier economies including Burma, Sierra Leone, Zimbabwe and Nepal.
A lack of adequate and affordable insurance prevents promising business investment in fragile states. A £20 million investment in the Multilateral Investment Guarantee Agency will enable it to support up to £270 million of new private investment in fragile countries.
- Appoint Novastar, a venture capital fund based in East Africa, as the first beneficiary of a CDC-managed fund that will provide capital to promising businesses which benefit the community.
The fund will invest up to £9 million in Novastar to allow it to support more entrepreneurs and businesses and in East Africa which provide low-cost schooling, healthcare, energy, housing and safe water.
- Sign the UK’s first Memorandum of Cooperation with the London Stock Exchange Group to support emerging capital markets in Africa.
This will allow the LSEG Academy to expand its training in Tanzania and, in time, across East Africa
Read the full press release and speech here