Katharina Münster

Katharina supports the Communication and Digital Innovation agenda of iBAN. Prior to joining iBAN, she gained working experience in development cooperation, public communications, and academia. Among others, she worked as a student assistant for the Asia-Pacific Research and Advice Network, drafted country reports for the Myanmar Representative Office of the Konrad-Adenauer-Foundation, and supported public outreach activities of the GIZ Programme for Sustainable Agricultural Supply Chains and Standards. Katharina holds a master’s degree in International Relations from the Free University of Berlin, the Humboldt University of Berlin, and Potsdam University. In addition, she studied abroad at Sciences Po Lyon and the University of Reading, UK.

Donor support to business - what do we know about demonstrating additionality?

Nigeria

By Melina Heinrich, Donor Committee for Enterprise Development Secretariat

How to demonstrate additionality in a credible way is a question that many agencies providing direct support to business investments are grappling with. In case you are wondering, additionality is defined as “the extent to which an activity (and associated results) is larger in scale, at a higher quality, takes place quicker, takes place at a different location, or takes place at all as a result of a donor intervention” [Scottish Enterprise, 2008]. More simply, might this have happened anyway?

Even though additionality is typically a formal requirement of support, assessment criteria are often narrowly or vaguely defined and assessment processes limited to brief justifications by businesses. There also tend to be no internal guidelines on how agencies consider additionality in partnerships with business. However, agencies are now under growing pressure to come up with meaningful answers on how they consider the additionality question, not least from the press.

In response, the Donor Committee for Enterprise Development (DCED) is currently exploring with a range of agencies and practitioners what good practice assessment criteria and processes could look like. The resulting document on ‘Demonstrating Additionality’ will be published soon; here are some of its key messages:

  • Additionality cannot be measured with exactness or certainty; nonetheless, many agencies could do more to demonstrate it consistently.
  • The ‘What’: The report identifies eight criteria that influence additionality. They include resources and incentives of the potential partner company, resources available from other parties, and agency or business engagement beyond the cost-shared project. Innovation and riskiness of a project are important cross-cutting indicators.
  • The ‘How’: Eight process principles allow agencies to develop a good understanding of their additionality across these criteria, enhance additionality where possible, and communicate it in a credible way.

If you want to receive the DCED’s Exploration of Good Practice Principles and Criteria for Demonstrating Additionality once published, you can contact Melina at heinrich@enterprise-development.org, or sign up for the DCED Newsletter here, selecting the ‘General’ and ‘PPPs’ email lists.

 

Nigeria