Review and evaluation of the Africa Private Enterprise Fund

The evaluation covers the period 1/85-10/87. The project has been well-managed and has proven a flexible and useful tool for responding to Mission needs. It has fulfilled many of its objectives. Twelve investment climate assessments were conducted by contractors - for Gabon, Benin, Zaire, Swaziland, Ghana, Madagascar, Cameroon, Guinea, Mauritania, Botswana, Guinea-Bissau, and Niger. The reports provided Missions with current information about policy constraints to private sector growth and recommendations for policy reform. Mission personnel generally agreed that the climate assessments focused attention on issues relevant to private sector growth, although there is no evidence that specific policy reforms have been instituted as a result of the assessments. Eighteen feasibility and technical studies have been completed, dealing with such topics as financial markets, trade and investment opportunities, and specific investment projects. A feasibility study cost sharing program has also been implemented, in which U.S. companies are reimbursed 50% for undertaking investment feasibility studies in Africa. Two of these studies (in Togo and the Ivory Coast) have been completed, and are expected to lead to investments of $1 million and $2 million respectively. The project has funded other field support activities, including private sector training programs, conferences, and seminars for Mission staff. These activities were informative and helpful in sensitizing field staff to opportunities for applying private sector resources to the economic development process. On the negative side, several components of the original project plan have not been fulfilled. Assistance to indigenous organizations has been far less than anticipated. Most likely, Missions will provide such assistance after they have undertaken a private enterprise project. No direct training of Africans has been financed, although a program for 3,000 trainees was part of the original project plan. Support for privatization has also been less than anticipated, perhaps because of the availability of A.I.D./PRE funding for this purpose. Finally, although it is difficult to document project impact to date or to demonstrate cost-effectiveness, it appears that important initial steps have been taken toward fostering private sector development in Africa. One concern is that project activities will generate expectations for follow-on programs for which no funding may be available.