Policy expertise

Improving the business sector in Ghana

Policy Area
Danish International Development Agency (Danida)
Apr 2014 - Dec 2014
OPM contact

This expert evaluation has provided Denmark’s Development Cooperation, DANIDA, with an in-depth analysis of their Business Sector Advocacy Challenge Fund (BUSAC) initiative that aims to improve private sector development in Ghana. Our recommendations will help DANIDA make evidence-based decisions to inform the design of BUSAC’s next phase. Established by DANIDA in 2004, the BUSAC fund aims to promote the advocacy activities of small business associations and farmer-based organisations to support a stronger business environment in Ghana.

Our team carried out an in-depth, two-stage OECD standard review of BUSAC, evaluating how the fund fared in terms of relevance, effectiveness, efficiency, impact and sustainability. We conducted assessments at both the fund- and the project-level, using a range of primary research tools including stakeholder interviews and Focus Group Discussions (FGDs). The results of this evaluation will help inform future Danish support of private sector development in Ghana and other low income countries, supporting the growth of environments that are more conducive to doing better business.

DANIDA, a component of the Danish Ministry of Foreign Affairs, established the Business Sector Advocacy Challenge Fund (BUSAC) in 2004 to help business associations, trade unions and the business media in Ghana advocate for a more conducive business environment. With support from USAID and the European Commission, the fund has awarded 362 grants and disbursed over DKK 40 million to date. The most recent phase of BUSAC has seen funding targeted at small businesses and farmer-based associations and a focus on emerging issues of national strategic importance.

With a third phase of BUSAC being planned, DANIDA recognised the need to take stock of the programme, to understand its challenges and opportunities and help inform the next stage of development. This project was established to evaluate the performance of the fund to date by assessing what has worked so far and why, and identify opportunities for improving the efficiency of future aid delivery.

Our comprehensive evaluation was based on the five key criteria laid out by OECD, namely Relevance, Effectiveness, Efficiency, Impact, and Sustainability.

We assessed the performance of the fund both in terms of grant allocation and management as well as its impact on individual recipients.

Our research was divided into different stages to reflect this two-level approach: First, we looked at the environment for change through advocacy as well as the overall governance and management arrangements for the facility. We then carried out detailed in-country reviews of the 38 individual projects that had been awarded grant funding. Our research included the following activities:

  • Interviews with grantees and other grant project stakeholders
  • Focus Group Discussions
  • Extensive programme- and project-level documentation reviews
  • A review of various assessment exercises that have been carried out across the portfolio of projects.

Our findings were summarised in a report in which we delivered a series of recommendations on how DANIDA could proceed during the next phase of funding.

Our research has provided a robust evidence base on what works and what doesn’t in terms of supporting Ghanaian business advocacy initiatives through an innovative Challenge Fund mechanism. By identifying key areas for improvement and providing strategic recommendations, our evaluation will help feed into the design of a more impactful, cost-effective and efficient third stage of the programme.

In the long run, this is likely to support the growth of initiatives that promote productive working environments for Ghana’s small and medium-sized enterprises. In turn, this should help drive local multiplier effects and ultimately, improve livelihoods through economic growth.

More broadly, our insights will help contribute towards a global evidence base on the effectiveness of Challenge Funds as mechanisms for targeted aid delivery.

Economic Policy Programme Director
Associate Consultant