Private sector development (PSD) in the 79 African, Caribbean, and Pacific (ACP) countries, with which the European Union (EU) has a special relationship, faces significant challenges related to the investment climate and the ability of firms to compete, grow, and prosper in domestic, regional, and international markets. These challenges, exacerbated by various crises, are obstacles to higher productivity, competitiveness, and investment promotion.

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 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 informed foreign direct investment (FDI) monitoring and follow-up and fully capacitated investment promotion institutions (IPIs). Insufficient quality systems and conformity assessments also prevent most ACP firms from fully competing in developed countries’ markets regulated by standards.

For the last decade, FDI inflows in ACP countries have remained marginal, with a share of 3% in annual world FDI flows. In 2015, while countries worldwide were receiving an average of USD 251 per capita in the form of FDI, ACP countries were receiving five times less, USD 49, demonstrating the need for the ACP region to attract more FDI. To enhance quality investment promotion and aftercare, ACP countries need to complement FDI data with data on domestic companies to devise effective investment promotion strategies. Quality investment promotion could increase local private sector competitiveness, stimulate trade, and create jobs, particularly for women and youth. Developing the necessary technical and organizational skills to promote investment and develop Quality Infrastructure (QI) in key economic sectors is a priority to directly improve the lives of the population.

In this context, the ACP-EU Business Friendly programme (ACP-BF) was proposed to support business-friendly inclusive national and regional policies and strengthen productive capacities and value chains. Three implementing agencies 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.

Financed under the 11th European Development Fund (EDF), the ACP-BF Programme has a total budget of EUR 41.76 million, with EUR 12 million allocated to the WB, EUR 15,064,200 to UNIDO, and EUR 14.7 million to ITC. The implementation period has been extended by a year and now runs from 21/12/2018 to 31/12/2025. The area benefitting from the Intervention comprises the 79 ACP countries as a whole, and eight countries specifically: the Dominican Republic (DR), Ethiopia, Cameroon, Ghana, Kenya, Senegal, Zambia, and Papua New Guinea (PNG).