A salesman demonstrates a mobile phone to a customer in a shop in central Kampala, Uganda.
Photo: Helena Landstedt
Private sector development
A sustainable economic growth that also includes poor people requires well-functioning markets and institutions. Clear legislation and less bureaucratic barriers help people to start a business, get a job or act as a consumer.
Sida works at both micro and macro levels to develop the private sector together with its partner countries. The particular circumstances and needs of each country determine what interventions are given priority. In war-torn countries such as Afghanistan and Liberia, the conditions are quite different compared to countries that have enjoyed peace for many years, such as Bangladesh, Tanzania or the Eastern European countries, which are currently implementing reforms to join the EU.
In order to avoid a distortion of competition, Sida is very restrictive with direct support to individual businesses. Instead, Sida works with international partners, member-driven business organisations and national, regional and local authorities.
Sida gives priority to projects that set the conditions for a viable private sector. In many countries, a clear legislation and less bureaucratic barriers would facilitate the operations of not only existing businesses but also of start-up companies. This includes simplified procedures for applying for permits, the opportunity to purchase land and stronger protection for patents and trademarks. Another challenge is the large informal economy where people make a living from small, unregistered businesses. Sida can contribute to the development of small-scale industry through training, microcredit and by increased market access for poor entrepreneurs.
Sida's support to private sector development amounted to 465 million USD in 2012, representing half of the support for market development.