British aid officially set aside to help alleviate poverty, has instead been poured into funding restaurant chains and online betting platforms, it has been revealed.
CDC Group, the government's private equity arm, claims that it "makes a lasting difference to people's lives in some of the world's poorest places" by investing in local businesses that then create jobs.
However, an analysis of its business portfolio by The Times, reveals that the foreign aid money spent by the group has instead gone to companies which cater for comfortable middle classes in fast-growing economies, such as India and China.
The revelation comes just one day after it was confirmed that the CDC spent over £1bn ($1.26bn; €1.18bn) on Western consultants and think tanks.
According to The Times, projects which have received funding from CDC include:
- Several large shopping malls in Nigeria, often with accompanying gated communities, and a chain of electronics stores selling iPhones and flat-screen televisions in Egypt.
- Daraz, the Pakistani version of Amazon, and an Indian online fashion retailer called Jabong. They have received £32m between them in direct funding from CDC.
- Restaurant chains in Vietnam, India and Peru and a Chinese budget hotel franchise called 7 Days.
- An African e-commerce company, which has also been backed by Goldman Sachs, Axa Insurance and other multinationals, and an online gambling platform in Singapore valued at $2.5m.
- Outdoor advertising businesses in Ghana and China and a company that supplies IMAX cinema equipment in the Far East.
The revelations come as Conservative MP Priti Patel, the international development secretary, wanted to quadruple the CDC's budget from £1.5bn ($1.89bn; €1.78bn) to £6bn ($7.55bn; €7.11).
However the move has been described as "an ideological attempt to privatise our aid" by opponents. Patel has been outspoken in her criticism of the UK foreign aid budget and proposed CDC as a more cost-effective solution.
A report by the National Audit Office in November found that CDC was struggling to show that its work made a lasting impact on people's lives in poor countries.
Tim Jones, policy officer at Jubilee Debt Campaign, said: "These cases show that money which should be used for poverty reduction is being directed at private companies benefiting wealthy consumers.
"In many cases the use of private equity funds means that CDC has no control over where the money ends up. Aid money should be supporting public services and infrastructure, not private profit."
A Department for International Development spokesman said: "We have radically transformed CDC over the last five years to ensure their investments are targeted where they are needed most and have greatest impact for the world's poorest."