This week has seen the publication of two very critical reports on UK aid.

A report by the campaign group War on Want says Britain’s aid budget for Africa is increasingly being channelled through public-private investment funds based in the offshore tax haven of Mauritius.

The report says the Department for International Development (DFID) has sponsored a network of offshore investment funds and trusts for aid spending on infrastructure and agribusiness projects in Africa.

Meanwhile, the Independent Commission for Aid Impact (ICAI) – set up by the coalition government to ensure the aid budget was delivering value for money – said DFID has only limited oversight over aid expenditure through the EU.

ICAI’s traffic light rating – amber-red – is potentially misleading. The report concludes that DFID cannot currently provide satisfactory assurance that value for money is being achieved and necessary improvements are being implemented.

Responding to both reports, Publish What You Fund director David Hall-Matthews said:

“Both of these reports support the need for increased traceability in aid flows channelled through partners, to ensure accountability and value for money.

“Defining the legitimate limits of commercial confidentiality will only become a more pressing priority as more aid is channelled through private investment funds. Also, the European Commission must press ahead with its transparency plans and its forthcoming common results framework to demonstrate value for money to the UK taxpayer. This will enable robust conclusions about the impact of UK aid delivered by commercial and multilateral partners.”