Making Private Sector Engagement Effective in Nepal
In recent years, both the government and the development partners in Nepal have realized the importance of private sector partners in attaining development targets stated in Sustainable Development Goals (SDGs). Major development agencies like USAID and DFID have implemented multi-year, multi-million-dollar projects to support the growth of the private sector in the country. Various interactions and programs have been conducted to encourage better engagement from the private sector in development initiatives.
However, the question still remains about whether such programs have been truly successful in aligning the goals of the private sector to those of the government or the development agencies and ultimately SDGs. As Biruwa Advisors has served as a technical partner and consulting agency in several of the programs for Private Sector Development, it sees the need for more effective engagements and precise interventions to truly make such programs work in Nepal.
USAID recently came out with its Private Sector Engagement Policy, where it states that “private-sector engagement is fundamental to our goal to end the need for foreign assistance.” While this is a goal worth striving for, the way such engagement-oriented projects are carried out has often resulted in the outputs not matching its original objectives.
Through our work, Biruwa Advisors has outlined the following simple steps to overcome some of the challenges that we see in the private sector engagement projects in Nepal:
Engage and Align Goals: Governments and development agencies need to interact with potential private sector partners to understand their needs and motivations while attempting to identify shared goals where meaningful partnerships can thrive. Before any project is designed, necessary stakeholder interactions need to take place not just in boardrooms in Kathmandu, but also with potential program partners and beneficiaries in rural areas, for whom the programs are designed.
Create Necessary Enabling Environment: Private sector-oriented interventions require the necessary enabling environment like adequate government policies, access to finance and technical assistance for the projects to achieve its objectives. Due to the agendas that development organizations are guided by, the comprehensiveness of business facets is often not addressed. With organizations targeting only certain business support requirement, they are not being able to address business and management issues holistically. The failure to address holistic support for businesses mean unsatisfactory development results at the end.
Evaluate Program Beneficiaries and Tailor Interventions: Development programs often have the tendency to assume that all program beneficiaries are in the same stage of business growth and tend to provide interventions without taking time to understand individual project beneficiaries. This can sometimes lead to program beneficiaries not getting the support that they truly require. Thus, development projects should take the time to study each individual beneficiary and attempt to tailor assistance based on their needs.
Pilot Programs at a Smaller Scale before Full-Scale Implementation: Too often development programs have lofty goals and program interventions are designed to maximize impact. However, as with any program design, many assumptions are made regarding how the stakeholders or beneficiaries will react to the interventions. In several cases, development projects do not bring about desired results and yet fail to adapt to market realities. This is also escalated by the changing market needs and demands as most of the projects are multi-year. Thus, piloting the interventions at a smaller scale would test theories and allow for the implementing agencies to make necessary programmatic changes where necessary before intervening at a full-scale.
Need to Mobilize and Support Local Government Bodies: With the outset of federalism in the country, the local government has been delegated with more power and authority. They play a prominent role in developing policies and making decisions at the local level. Any program that is directed towards local development requires acceptance and support from the local body. Therefore, if development programs could be designed in a way that mobilizes and supports local government bodies then program implementation could be carried out more efficiently and effectively. As Biruwa has witnessed that the majority of the local bodies want to attract private companies and want to benefit their communities, they are clueless about planning and execution of such activities. If development organizations can support such local bodies, it will create a lasting impact in private sector development at the local level setting them as a role model for others to follow.
Use of Team Members and Project Partners who have Understanding of the Private Sector:
It is not uncommon that development programs are filled with development professionals with little exposure to the private sector. As a result, many programs are designed without truly understanding the needs and motivations of the private sector which leads to implementation becoming problematic. Thus, adequate resources in the team who have an understanding of such programs can improve program results.
Nepal’s economy is fledgling and recent federalization of government bodies has meant that there are many changes in how the economy functions. To build a thriving private sector that can help achieve targeted development goals, the government and development partners have to effectively design programs and ensure that implementation of the programs addresses the needs and motivations of the private sector.