Local Private Sector Engagement

USAID’s commitment to advancing localization means shifting more leadership, ownership, and implementation to local actors. This includes not only increasing the number of direct awards to local actors, but also ensuring locally led co-design, priority setting, implementation, and evaluation. The local private sector - including for-profit companies of all sizes, business associations, corporate foundations, and financial institutions – can play an important role in this shift, as partners, advisors, co- creators, co-investors, and even direct recipients of USAID funding to implement development solutions. Local private sector engagement (PSE), leveraging private sector expertise, innovation and resources, can create market- based solutions and more sustainable outcomes. 

This brief guide provides practical tactics and tips that USAID staff can apply throughout the program cycle to increase local leadership and private sector participation. 

USAID defines market-based approaches as those that use business models and market forces to address development and humanitarian challenges more sustainably and/or at scale. While opportunities for market-based approaches will depend on context, solutions that are more market-based, or commercially sustainable, have a greater likelihood of continuing to generate results beyond USAID support. USAID has also defined a spectrum of the ways that locally-led development can be supported to shift decision-making power into the hands of local actors. In considering local PSE, we see both local leadership and more market-based solutions as key objectives, and have combined these spectra in the illustrative matrix below.