International Finance Corporation (IFC) has announced record new investment commitments of $6.2 billion in long-term financing in Sub-Saharan Africa for its 2018 fiscal year.
The IFC, a member of the World Bank Group, added that the figure is up from $3.5 billion in the previous fiscal year.
Its annual investments and mobilizations in the region accounted for more than a quarter of IFC’s $23 million in global long-term financing.
This is the first financial year the Sub-Saharan Africa region accounted for IFC’s largest regional investment program.
IFC provides advisory services to support private sector development, with a portfolio of programs in the region that reached $400 million during 2018.
The corporation’s activities support development impact affecting the lives of millions in Africa.
IFC financial institutions clients provided more than 2.9 million loans to microenterprises and small and medium businesses.
Power generation by IFC clients benefited 32 million people in Africa, while water distribution reached 2.5 million.
IFC projects impacted more than one million farmers, and 1.4 million patients were served by health care providers supported by IFC. IFC clients have also employed more than 278,000 people.
Sérgio Pimenta, IFC’s Vice-President for Middle East and Africa, said “IFC is demonstrating its capacity to mobilize increasing private investment for African development. With declining aid flows, there is a growing consensus that governments can no longer overcome development challenges without increasing support from the private sector.
“IFC’s strategy aims to mobilize private capital at a greater scale to further engage, especially in low income and fragile states. We are developing new tools to help us reduce commercial risks and encourage more investors.”
Its commitments in Sub-Saharan Africa included $1.5 billion in long-term financing for IFC’s own account.
IFC mobilized another $4.7 billion from other investors in core mobilizations, supporting projects in infrastructure and natural resources ($3.5 billion); manufacturing, agribusiness and services ($1.2 billion); financial institutions ($1.1 billion); and telecoms, media and technologies ($100 million). IFC advisory services included support to projects to improve financial inclusion and access to finance, and to help encourage the manufacturing, agribusiness and services sectors.
Oumar Seydi, IFC’s Director for Sub-Saharan Africa, said “Africa is at the core of IFC’s global strategy to ensure the private sector has a greater impact and we are deploying financial and advisory tools to create new markets. Our results in Sub-Saharan Africa are an early sign of the impact of our new approach.”
With Africa in mind, IFC is implementing a new strategy to support investors willing to take more risk with the right incentives.
The cornerstone of this new strategy — called IFC 3.0 — is to systematically create new markets by tackling market and regulatory imperfections and by collaborating upstream on the policy side. For the necessary capital to be mobilized, IFC aims to reduce risks — both real and perceived.
IFC’s 3.0 strategy is aligned with the World Bank’s Maximizing Finance for Development approach. IFC is expanding the tools available to collaborate more with the World Bank and MIGA.
To do more in the world’s most challenging markets, IFC aims to bring new solutions to our clients, drawing on the strengths of different World Bank Group institutions.