Improved Guidance, Data, and Metrics Would Help Optimize USAID’s Private Sector Engagement

Audit Report
Report Number
5-000-21-001-P
Engagement with the private sector is a major component of USAID’s efforts to encourage country self-reliance. According to the Agency, over the last 20 years it has entered into thousands of partnerships with private sector organizations involving billions of dollars in contributions. Based on examined partnerships in eight countries, we identified six engagement approaches that USAID generally used in an effort to boost private sector investment in foreign development. To support and manage its financial and nonfinancial resources when using one or more of these approaches, USAID employed a variety of formal and informal methods. Regardless of the approach and methods used, USAID and the private sector cited a number of benefits from partnering on foreign development, including bringing development interventions to a larger scale to achieve greater impacts. However, USAID and private sector stakeholders, as well as implementers, reported a number of challenges that can limit successful engagement and partnering on development projects. In addition to these challenges, insufficient Agency-wide implementation guidance and insufficient data and metrics have hindered missions’ ability to design, manage, and oversee private sector engagement and maximize engagement, as USAID’s private sector engagement policy calls for. We made, and USAID agreed with, seven recommendations aimed at helping the Agency maximize private sector engagement and its impact.

Recommendations

Recommendation 1

USAID's Acting Deputy Administrator develop and codify implementation guidance that addresses gaps for developing and managing private sector engagement activities in a directory or other medium that captures all private sector engagement-related material and requirements.

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Recommendation 2

USAID's Acting Deputy Administrator develop a workforce plan for dedicated private sector engagement staff with appropriate competencies across the Agency, including a team established in the Bureau for Development, Democracy, and Innovation, that has adequate resources, such as staffing and leadership, to support the Agency's implementation of the private sector engagement policy.

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Recommendation 3

USAID's Acting Deputy Administrator incorporate into USAID's Automated Directives System guidance on the process and responsibilities for coordinating development activities with the U.S. International Development Finance Corporation.

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Recommendation 4

USAID's Acting Deputy Administrator develop a plan on how to best capture and distribute the worldwide knowledge associated with private sector engagement approaches so missions and staff can better access and share information with each other to learn and adapt and achieve optimal development results associated with private sector engagement.

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Recommendation 5

USAID's Acting Deputy Administrator implement a process and timeline for assessing the reliability and accuracy of private sector partnerships data from prior fiscal years. Elements to consider for the assessment could include: (1) the usefulness and reliability of data that is aggregated for private sector engagement results; (2) conducting a review of mission data submitted as appropriate; and (3) determining whether to communicate information externally, taking into consideration the completeness and accuracy of data.

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Recommendation 6

USAID's Acting Deputy Administrator develop a plan for a whole-of-Agency process for collecting, analyzing, and disseminating private sector engagement data that results in the ability to actively manage private sector engagement and inform timely decision making. Elements to consider for this improved data collection process could include data and information related to: (1) programmatic private sector engagement efforts, (2) capacity of missions and staff to engage the private sector, and (3) private sector relationship management.

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Recommendation 7

USAID's Acting Deputy Administrator clearly document in guidance to missions and bureaus an Agency approach to identifying and implementing consistent, useful metrics that further the Agency's goals for private sector engagement.

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