Last week, the Daily Telegraph published an article, “So much foreign aid is counterproductive – let’s invest abroad instead”. Its author, Abhishek Parajuli, called for the UK to “divert a part of the aid budget to a new investment fund that invests in businesses in developing countries. This would drive development and generate returns for UK taxpayers.” He’s right, but of course that’s exactly what CDC is and does. Our Chief Executive, Nick O’Donohoe has written to the Telegraph in response and here’s what he had to say:
Dear Sir,
In his article, ‘So much foreign aid is counterproductive – let’s invest abroad instead’ (8 July) Abhishek Parajuli calls for a “new investment fund that invests in businesses in developing countries.” Such an organisation, CDC, the UK’s development finance institution, already exists and has done since 1948. Our role, as a government-owned investor in the private sector across Africa and Asia, is to support the economic growth that lifts people out of poverty, and to make a financial return, which we use again and again to help more businesses.
CDC doesn’t aim to solve all development problems, but we play an important part in the UK’s broader aid policy and we’re investing more than ever before. In 2018 we committed over £1 billion to businesses of all sizes across sectors including renewable energy, infrastructure, telecoms and agriculture. Last year, our investments made a positive difference to at least 16 million people, including by directly employing 852,000 workers, sourcing from 1.25 million farmers, treating 9.5 million patients, and generating 49 terawatt hours of electricity, enough to power Portugal for an entire year. Mr Parajuli is right to say that there is not enough investment, and in many regions, particularly in sub-Saharan Africa, investment is falling. If we are to achieve the sustainable development goals then the amount of private sector investment in poor countries will have to increase substantially. This means CDC’s role remains a vital one.
Nick O’Donohoe
Chief Executive
CDC Group plc
Notes to Editors:
- CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in Africa and South Asia with the aim of supporting economic development to create jobs. CDC Group plc has invested in Africa since its establishment in 1948. Find out more at cdcgroup.com
- CDC takes a flexible approach and provides capital in all its forms, including equity, debt, mezzanine and guarantees, to meet businesses’ needs and achieve development impact. CDC has net assets of £5.1 billion.
