Private sector development (PSD) in the 79 African, Caribbean, and Pacific (ACP) countries, with which the European Union (EU) has a special relationship, is constrained by considerable challenges in terms of regulation, competition, and policy environment. These challenges, exacerbated by various crises, are obstacles to strengthened regional integration.

Improving the business environment and fostering regional and global integration to stimulate growth is a key issue in the Agenda for Change and the 2014 EU Communication on the private sector. The private sector's role is recognized as crucial in the Sustainable Development Goals (SDGs) development agenda as it drives transformation towards inclusive and sustainable growth. The Economic Partnership Agreements (EPAs) provide opportunities for ACP countries to enhance their integration into global value chains, a key issue given the challenges of globalization in a fast-changing world. However, industrialization and diversification of ACP economies remain limited, with a strong dependency on commodities and low-end primary production with little added value. Attracting responsible private investors is key for diversification and growth. Main obstacles include the lack of relevant and harmonized business laws and fully capacitated government bodies.

To enhance quality investments promotion and support, the wider policy, regulatory, and institutional environment needs to be improved in ACP countries. Governments need advice and support on structural reforms to create a conducive investment climate where competition is favored through more open markets and reduced costs of doing business. Over the past decades, foreign and domestic investments in ACP countries have been very limited compared to other regions of the world. Quality investments in the productive sectors of ACP countries could increase local private sector competitiveness, stimulate trade, and create jobs, particularly for women and youth. Improving the development of necessary technical skills to support entrepreneurship and competitive value chains in key economic sectors (particularly agriculture) stands out as a priority to directly improve the lives of the population in both the formal and informal sectors.

In this context, the ACP-EU Business Friendly (BF) programme was proposed to support business-friendly inclusive national and regional policies and to strengthen productive capacities and value chains. Three implementing agencies (IAs) have been chosen by the European Commission (EC) and the Organisation of African, Caribbean, and Pacific States (OACPS): the World Bank (WB), the United Nations Industrial Development Organisation (UNIDO), and the International Trade Centre (ITC). The programme follows a three-tiered approach with macro (WB), meso (UNIDO), and micro-level (ITC) interventions implemented independently but in close collaboration. This approach seeks to leverage value chains to improve the ability of firms in ACP countries to compete, grow, and prosper in domestic, regional, and international markets, ultimately generating inclusive and sustainable jobs and economic growth.

Financed under the 11th European Development Fund (EDF), the BF Programme’s total budget amounts to EUR 41.7 million, of which EUR 12 million is allocated to the WB, EUR 15 million to UNIDO, and EUR 14.7 million to ITC. The Administration Agreement with the WB mentions a 100% EU contribution and is concluded under indirect management in the context of the Framework Agreement between the WB Group and the EC dated April 2016. The implementation period started in January 2021 and will run until December 2024. The area benefiting from the Intervention comprises the 79 ACP countries as a whole, and 10 countries specifically: Angola, Cape Verde, Ghana, Zambia, Senegal, Gabon, Kenya, Madagascar, Dominican Republic, and Papua New Guinea (PNG).