Traditionally, most DFIs do not engage directly with national governments, a position we tried to question in our research with the aim of suggesting that there could be value in doing so, thereby taking advantage of additional commercial opportunities and enhancing the development impact of DFIs. We try to understand the role of DFIs regarding sustainable development that aligns with national development objectives or priorities that emphasize the SDGs in Ethiopia, Ghana and Kenya and interaction with the six selected DFIs for their perspectives on this issue.

Among other things, our interaction with the sampled DFIs suggests that country-level development plans do not necessarily drive their investments and in certain cases, these plans may present obstacles to investment. These barriers also vary from case to case. To the extent that DFIs differ in mandate, size and resources, including capacity, several of them are constrained by lack of capacity and in-country office presence in all the jurisdictions they invest. It takes time and expertise to review and synthesize national development plans whose quality is often questioned by many DFIs. Most small bilateral DFIs would rather respond to their shareholder needs by creating global sector and instrument strategies and not by specific countries, with the exception of large multilateral DFIs such as the IFC of the World Bank Group.

Additionally, national strategic documents may lack detailed data that could be used to identify existing investment gaps. Certain countries are not clear about their consideration of the SDGs, a premise many bilateral DFIs use for their investment decisions. Of the countries reviewed, only Ethiopia was explicit in the mention of the SDGs in its development plan, while Ghana and Kenya did it implicitly.

Moreover, the national development goals may not fit with the DFIs’ strategies and their willingness to distribute their resources for which they want to be accountable. A risky business climate due to an unstable political administration and governance with weak institutions may also be a hindrance depending on the DFI’s structure, credibility and historical position.

According to several DFIs, since the continuity of government programmes and policies is uncertain, national development plans should not be the major determinant of DFI investment decisions. Instead, DFIs should invest according to their own strategies and engage in targeted dialogue with governments and their plans where necessary. These discussions should focus on finding value in opportunities that complement those that exist in the private sector, with the aim of increasing development impact. In particular, DFIs expect that such targeted interaction should lead to improving the business and regulatory environments to protect their strategic investments, resulting in enhanced impact.