Donor funding plays a crucial role in advancing development goals across East Africa, not least in Ethiopia, Rwanda, and Kenya. These nations have made significant strides toward inclusive economic growth and improved infrastructure to enhance social impact, in part, due to the support of international donors, development agencies and philanthropic funds. However, as multiple organisations fund similar initiatives across these regions, questions arise about coherence, alignment, and potential duplication of efforts.

In the face of data paucity and indicator opaqueness, we aim to address a hypothesis: a lack of donor coherence is causing suboptimal allocation of resources. By ‘donor coherence’ we mean the degree of alignment between the objectives, processes, and priorities of various funding bodies, aiming to avoid redundancy and ensure that resources are used efficiently. Financial contributions should aim to nurture dynamic entrepreneurial environments while ensuring more effective use of public funds.

This report explores how donor coherence in Ethiopia, Rwanda, and Kenya impacts resource distribution across sectors, identifying potential overlaps and assessing the implications of these strategies. By assessing the activities funded and the thematic areas supported, we can gain insights into how donor coherence affects the overall impact of development assistance in East Africa.

The report by the Enrich in Africa Center (EiA-C) highlights the importance of funding innovation ecosystems in Africa to develop scalable solutions for local challenges. It analyzes grant funding data from 2020 to 2023, focusing on the nine largest funders active in Africa, and incorporates insights from interviews with key stakeholders. The report examines both the overall innovation funding landscape and specific funding for ecosystem support activities and organizations. It aims to equip funders and recipients with the necessary data and insights to create sustainable and impactful innovation ecosystems across Africa. EiA-C plays a pivotal role in bridging the gap between funders and recipients by fostering connections and sharing knowledge within the ecosystem.

"Backed by a unique database of over 255 African companies supported by I&P and insights from two decades of experience in impact investing, we highlight the critical role of formal SMEs in driving sustainable and inclusive growth in sub-Saharan Africa, how SMEs face barriers to accessing traditional financing, and how Catalytic capital offers a solution to bridge this gap. I&P shares insights on improving conditions and availability of catalytic capital, fostering collective learning for more impact investments in Africa."

"Female founders raise less capital from investors than male founders, even if their ventures are similar or identical. However, providing systematic evaluation frameworks could encourage investors to assess all candidates equally, thus reducing gender disparities. In this vein, the authors – Amisha Miller and Saurabh Lall – investigated whether changing systematic evaluation practices could close the gender gap in investment decisions. The authors designed and implemented a two-stage experiment in collaboration with Village Capital across different developing regions across Africa, South Asia (India), the Middle East, and Latin America to reduce gender disparities in investment decisions. The experimental findings confirm that using a systematic evaluation framework – prompting investors to consider both risks and growth, as well as progress – reduces or even reverses gender disparities in investment decisions. This study provides strong causal evidence for an intervention that can be implemented right out the gate at a low cost: providing a systematic evaluation framework to investors."

The Middle East and North Africa (MENA) is the region with the lowest rates of female-owned business, as only 10% of all firms are owned by women. Increasing and promoting female entrepreneurship is therefore very important and has a high potential to broaden labour force participation and diversify the economic landscape of MENA countries. This project aims to address this issue by assessing the effectiveness of an export promotion program targeted at female-owned enterprises in Tunisia who have the objective to export to other African markets. This project update shares the methodology used to address this research question and early insights that have emerged so far.