The private sector serves as an engine of economic growth and a powerful force for helping to reduce poverty. USAID works in partnership with companies to tap the power of their capital, expertise and global reach to contribute to the scale, sustainability and impact of development solutions.
USAID partners with the private sector where there is a strong alignment between business interests and our development objectives. Today, we find these two aims increasingly intersecting. Developing economies now account for over half the world's economic output and represent many of the fastest growing markets, customer bases and workforces.
USAID recognizes that by conducting its core business, the private sector has an enormous impact on development in areas ranging from agricultural development to climate change mitigation. Rapid globalization has created a world where over 90 percent of financial flows from the United States to the developing world are from private sources - and less than 10 percent from government aid. This creates an opportunity for USAID to work collaboratively with companies and investors to draw on their expertise, assets, resources and innovations to design and promote market-led development.
USAID has a long track record of partnering with the business community. We work collaboratively with the private sector to improve the business environment in developing countries; promote sustainable and inclusive business practices; and help companies find growth and investment opportunities in sectors critical to development.
The Agency has built more than 1,600 alliances with a wide variety of private sector entities in the past 11 years, leveraging more than $19 billion in public and private funds towards increasing the sustainable impact of our development assistance programs. Through our Development Credit Authority, we have mobilized $2.7 billion in local capital for more than 130,000 borrowers since 1999.
This experience has shown that our most impactful partnerships with the private sector are those which clearly align business interests with development objectives; tap into companies' core capabilities; and employ models that are cost-effective, scalable, and sustainable in the long term without the need for ongoing U.S. government assistance.
USAID works with the business community in a number of ways:
- Building public-private partnerships with local and international companies, as well as business associations and other private sector entities;
- Providing guarantees to unlock local capital for sustainable growth;
- Offering field support, industry expertise and country-specific knowledge to help facilitate sustainable investment opportunities in developing countries;
- Providing financing to find and test cost effective, scalable development solutions through a venture capital style grant competition; and
- Engaging with the private sector as strategic partners in advancing our Presidential Initiatives in the areas of food security, global health and climate change and energy.
Examples of USAID's work with the private sector:
- In Nigeria, USAID worked with Olam International to expand local rice production, doubling farmers' incomes while improving the quality of Olam's local supply chain.
- In more than 60 countries, USAID and Cisco have partnered to extend the reach of Cisco's Networking Academy program, teaching the skills needed to build, design and maintain networks, while improving career prospects of citizens in low-income communities across the globe.
- Through the Development Credit Authority, USAID and Root Capital, a nonprofit social investment fund, opened $25 million in financing for over 100 African agribusinesses too large for microcredit but too small for traditional commercial financing.
- Since 2005, USAID's longstanding partnership with The Coca-Cola Company, the Water and Development Alliance (WADA) has reached nearly 530,000 people with improved water access, 230,000 people with improved access to sanitation and strengthened the management of more than 440,000 hectares of land.
- USAID and The Government of Liberia are working together with Google to bring high-speed communications infrastructure [PDF] to Liberia, as part of USAID's Ebola recovery efforts. Strengthening communications infrastructure is critical to helping countries prevent, detect and respond to public health epidemics.
- Globally, we teamed up with Laerdal Medical on the Helping Babies Breathe partnership that has trained over 100,000 health care providers in 54 countries in newborn resuscitation. In an evaluation of the Tanzania program with over 70,000 births, asphyxiation related newborn deaths were reduced by almost 50 percent.
- In Kenya, we are supporting Sanergy, an ingenious social enterprise started by MIT graduates that has pioneered financially sustainable sanitation centers that convert waste to organic fertilizer and biogas energy.