Sida promotes private sector development through projects at the macro level (supporting ministries, for example), at the meso level (such as developing chambers of commerce), and at the micro level (through training small-scale farmers, for example). The efforts that are prioritized in different countries and regions depend on each country’s particular conditions and requirements. In war-torn countries, such as Afghanistan and Liberia, these conditions are completely different from those in countries where there has been long-term peace, such as Bangladesh or Tanzania; or from those in Eastern European countries that are implementing reforms to become members of the EU.
In many countries, clearer legislation and fewer bureaucratic obstacles would make it easier for established and newly started companies alike. This could mean simpler routines for applying for permission, for buying land or for getting better protection for patents and brands. Sida works with international partners, such as other bilateral donors and the World Bank, to support local authorities and trade and industry organizations to improve the business climate in the countries with which it co-operates.
Efforts on multiple levels
However, this work has major challenges. Efforts are often required on several levels to bring about change. For example, sometimes several authorities at both the local and regional level must be involved in a project. In many countries, there is also widespread corruption, which complicates the change process. Combating this is a central priority for us at Sida.
To avoid unfair competition, Sida is highly restrictive when it comes to giving direct support to individual companies. Instead, we prioritize projects that create the conditions for viable commerce. Many countries, especially in Africa, have a large informal economy with people who provide for themselves through small, unregistered business operations. There is a great opportunity for Sida to contribute towards developing businesses here, through training and micro loans, for example.
Successful project with rural radio stations
Sida can also help individuals receive information about, and get the opportunity to influence, political decisions, which in turn affect economic development. One successful example is our support of the development of private rural radio stations in Uganda . A pilot programme was started in which small-scale farmers and entrepreneurs spoke about how they were affected by decisions made by the country’s politicians. The programme quickly became popular, and several political decisions were reversed after these issues had been raised. More radio stations have adopted the concept and the programme is now entirely funded through advertising.
Examples of Sida’s efforts
• Improved business and investment climate in Liberia. Through support via the World Bank International Finance Corporation/Foreign Investment Advisory Service (IFC/FIAS), Sida has contributed towards Liberia’s improved conditions for trade and industry. In the World Bank’s “World Bank Doing Business” report, Liberia has risen from 159th to 149th place (out of 183 countries). See film about the business and investment climate in Liberia.
• Poor province finds new road. The Niassa province of northern Mozambique is a distant region that has long been isolated from the fast-growing economy in the middle of the country. The Malonda Foundation has been established in co-operation with Sida and has helped to create the basis for increasing employment and economic growth in Niassa.
• Business Environment Strengthening for Tanzania (BEST). The overall target of the BEST Programme is to reduce poverty by promoting growth and business development in Tanzania, especially within small and medium-sized enterprises in which the poor are engaged.
• Poor farmer becomes enterprising sole trader. The Agriculture Support Programme (ASP) has helped people in 44,000 households in Zambia become sole traders with control of their own lives.
