HUNDREDS of millions of pounds of foreign aid cash spent through the Government’s private finance arm is failing to reach the world’s poorest, a report has found.
The Department for International Development (DfID) invested £1.8 billion of taxpayers’ money in the CDC Group between 2015 and 2018.
It ordered it to pump money into 33 of the world’s most fragile countries.
The ICAI said the CDC Group failed to do enough to maximise the impact of its spending and it had “not done enough to secure or monitor development gains”.
ICAI’s review found that since 2012 the Department for International Development had set progressively more ambitious goals for CDC by prioritising new investments in poorer and fragile states in Africa and South Asia.
Between 2015 and 2018 CDC received £1.8 billion of taxpayers’ money from DfID, with further capital injections planned through to 2021.
'NOT REACHING POOREST'
The reviews said: “CDC has made progress in redirecting investment to low-income and fragile states, but has not done enough to secure or monitor development gains, to improve evaluation or to apply learning.”
The review gave an overall amber/red rating on the traffic-light scale, meaning there was “unsatisfactory achievement in most areas, with some positive elements”.
Between 2012 and 2017, data showed that 52% of CDC’s new investments in its main portfolio were in countries classified as difficult investment environments.
But the majority of these investments were in larger economies, such as Pakistan, Kenya and Nigeria.
The report also highlighted that CDC only had seven investment staff based in Africa at the end of 2017.
ICAI commissioner Richard Gledhill said: “CDC has made significant progress in its transformation towards investing in low-income and fragile states.
“But it needs to move further and faster. We had serious concerns about CDC’s lack of rigorous monitoring and evaluation for its multi-billion investment portfolio.
A DfId spokesman said: “The ICAI report is backward looking and mainly focuses on CDC’s activities between 2012-2016.
“In 2017 CDC agreed a new 5 year strategy with DFID and it has already taken steps to increase the development impact of its investments and expand its presence overseas.
“Over the past 3 years CDC investments have mobilised over US$3bn of additional private capital which have supported the growth of successful businesses in the world’s most challenged countries.
"These firms are creating jobs, providing essential services and boosting local tax revenues which help transform economies, lift people out of poverty and achieve the Global Goals.”