This is the first corporate-level evaluation of IFAD’s engagement with the private sector. The evaluation concluded that there has been a major paradigm shift in the past 20 years or so in acknowledging the potential and contribution of the private sector in agriculture and rural development in recipient countries. The latter have realized that the for-profit private sector can be a critical ally in their own efforts to promote sustainable pro-poor development that can result in better incomes and livelihoods for the rural poor.

For its part, in the last decade and especially in recent years, IFAD has made some adjustments to adapt to this new reality by widening the government-led focus of its country strategies and projects to promoting greater involvement of the private sector in its operations. Among other steps, this included the adoption of the above-mentioned corporate private-sector strategy in 2005, greater attention to value chain development, commercialization and access to markets, as well as articulating a new vision in its Strategic Framework 2011-2015, which is centred around “farming as a business” and recognizes the significant role for-profit private-sector operations can fulfil.

However, there are a number of factors that have constrained IFAD’s efforts in promoting private-sector development, with the ultimate aim of reducing rural poverty. These include, inter alia, IFAD’s current broad-based definition of the private sector, so that clarity is lacking on the main private-sector actors to be engaged, the lack of instruments for direct lending to the private sector, an organizational architecture and work force that is mostly geared to developing investment projects executed by governments, corporate business processes that have not fully been adjusted to the new development paradigm, and existing instruments that have not yet been sufficiently leveraged for private-sector development.

Hard copies are available from the Independent Office of Evaluation. Please send your requests to:  evaluation@ifad.org.