On Sunday (16 February 2020), the Observer covered a report by Global Justice Now (GJN) on CDC, the overseas investment institution, wholly owned by the Department For International Development.
GJN’s report says CDC “stands accused of squandering public money and failing to make a difference to poverty levels” – claims which it strongly rejects.
The piece refers to the Abraaj Growth Markets Health Fund, which invests in private healthcare, and the low-cost private school chain Bridge International Academies.
It claims that despite changes to CDC announced under then International Development Secretary Andrew Mitchell in 2011, CDC has “demonstrated a near-total resistance to reform by continuing to make more profit than it should”.
CDC issued a strong rebuttal in response, saying:
The report contains numerous factual errors. It also demonstrates a broad philosophical opposition to the involvement of the private sector in fighting climate change and alleviating poverty. We disagree with that view.
No country has escaped poverty without a strong private sector creating jobs, providing services and generating much-needed tax receipts. All 193 member states of the United Nations, including all 54 African countries, endorse this approach, Global Justice Now does not.
Journalists also took to Twitter to defend CDC’s work after The Observer published its story.
Jonathan Rosenthal, The Economist’s Africa Editor tweeted: “I sometimes wonder whether charities want to keep Africa poor. It needs investment, which is what CDC is bringing.”
ITV News’ International Affairs Editor Rageh Omaar added: “Well said @rosenthal_jon – this is pitiful, self-serving “Africa needs our aid and aid workers, not horrible nasty trade” guff. @CDCgroup is far from perfect, but provides the investment which, yes – leads to profits, but also jobs.”
DFID also provided a response defending CDC’s work, which was carried in The Observer’s story.
No country can defeat poverty without economic growth. UK aid helps lift millions of people out of poverty by creating jobs.
We continue to work closely with CDC to ensure it delivers investments, which benefit the world’s poorest countries.
In 2018, CDC invested in over 1,000 companies in Africa and South Asia. These companies employed over 850,000 people, paid over $3.2 billion worth in local tax revenue and generated enough electricity to power Portugal for a year.