IFC Records Year of Strong Reach and Volume to Promote Development in Africa
IFC, a member of the World Bank Group, today announced its results for the fiscal year ending June 30, 2011, demonstrating robust volume and reach of investments and advisory services. IFC’s strong business and development results extended across sub-Saharan Africa, supporting regional growth despite turbulence in the global economy. During the previous calendar year, IFC’s activities:
• Generated power for an additional 6.6 million people
• Connected about 59 million telephone users
• Supported nearly 500,000 students.
• Provided loans to 241,000 small businesses and 261,000 farmers
• Created about 217,000 jobs
IFC’s new investments in the whole of sub-Saharan Africa totaled $2.2 billion and reached 31 countries. Of the 95 new investments made during the last fiscal year, 87 were in the world’s lowest income economies, where IFC’s development impact is especially pronounced. IFC also mobilized an additional $589 million from other investors.
IFC advisory services was active in 31 countries in Africa, with 133 projects valued at $189 million through June 2011. Of these projects, 121 were active in the region’s lowest income economies. IFC expanded initiatives to support the growth and development of the private sector in economies affected by conflicts, especially South Sudan and Liberia.
Yolande Duhem, IFC Director for West and Central Africa, said, “IFC made significant progress in supporting Africa’s development last year. Our investments in West and Central Africa and other parts of the continent grew, we saw important reforms to improve the investment climate in the region, innovative projects in priority sectors, and we have a large portfolio of investment and advisory projects that are improving people’s lives through better services and opportunities.”
Jean Philippe Prosper, IFC Director for Eastern and Southern Africa, said, "Our increasing activities in Africa reflect IFC’s commitment to mobilize resources for entrepreneurial activity and projects driving forward the region’s private sector. IFC’s investments and advisory services are creating jobs, improving infrastructure, securing access to finance for small and medium enterprises, and raising health, education and living standards for Africans.”
West and Central Africa
In West and Central Africa, IFC provided $1.3 billion in new financing commitments, an 8.5 percent increase over last year. IFC supported private sector involvement in novel infrastructure projects, such as the Dakar Toll Road, which will improve transport and trade in Senegal. The road is being built on concession, the first experience of its kind on the continent, outside of South Africa.
In other projects in Senegal, IFC invested in two microfinance institutions and launched a rural electrification project in collaboration with Comasel Louga.
In Ghana, IFC made a push into the telecoms sector by supporting Vodafone Ghana in its expansion program. Vodafone will provide affordable, reliable mobile phone services to previously underserved areas of the country. IFC’s investments in agribusiness included the fast-food restaurant chain, Food Concepts in Nigeria, who aim to integrate SMEs into the food supply chain in West Africa. As the political climate stabilizes in Cote d’Ivoire, IFC was quick to re-engage in the country with an investment in microfinance bank, Advans.
In terms of advisory services, IFC worked on improving leasing laws in in Liberia and Sierra Leone and undertook activities to improve investment climate in Mali, Burkina Faso and the Central African Republic. In Chad, IFC launched a Village Phone Program in Chad that will bring phones to rural communities.
Through the Investment Climate Advisory Services of the World Bank Group, IFC supported the effort by 16 West African countries to change their common business legislation to significantly improve their business climate. The OHADA project addresses two of the top constraints to enterprise development and investment in Africa: access to finance and the quality of the legal framework. The reforms achieved have removed some of the main legal constraints to entrepreneurship and access to credit in the region and will help countries become more attractive to investors. The project is one of the first of this size and duration that works with a regional organization rather than an individual country government.
IFC continued to promote public-private partnerships, notably, through an advisory services mandate with the government of Benin in the tender for a new public hospital, replicating a former IFC project in Lesotho. IFC and donors also renewed the advisory program for private sector development in Liberia.
IFC maintained a leading role in developing the region’s financial sector, providing both investment and targeted advisory services to a number of banks in the region. In Nigeria, IFC’s engagement helped banks recover from the banking and financial crisis. IFC’s activities in the banking sector spanned several more countries in West Africa, such as: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Cote d’Ivoire, Gambia, Ghana, Liberia, Mali, Mauritania, Niger, Nigeria, Sao Tome and Principe, and Togo.
Eastern and Southern Africa
Fiscal year 2011 marked the highest investment volume ever recorded by IFC for East Africa. IFC’s new investments totaled $327 million in 29 projects in the East African Community countries. IFC supported 26 active advisory services projects the five countries as of June 30. IFC committed new investments of $247 million in 16 projects in Southern Africa. IFC had 11 active Advisory Services projects in the sub-region at the end of the fiscal year supporting activities ranging from climate change initiatives to increased access to finance and basic services.
IFC supported South Sudan’s transition to independence, working with the country’s public and private sectors to improve the investment climate and attract investment. IFC’s Advisory Services contributed to a new leasing industry in Rwanda, where IFC also has an active investment climate program.
For many farmers in developing countries, access to credit is a major constraint. In Ethiopia, IFC has established a partnership with Ethiopia Commodity Exchange and commercial banks to develop a program to help coffee producers improve access to finance through the use of commodity warehouse receipts.
IFC supported infrastructure and South-South investments through Magerwa in Rwanda, a trade logistics company with Singaporean owners. IFC also supported local currency finance in the region. In Rwanda, for example, IFC provided local currency financing through swaps facilitated through the Central Bank. IFC provided financing for telecom operator Leo Burundi, which will expand mobile telephone service in a country that is presently poorly served. IFC’s Climate Change Investment Program helped South Africa’s Karsten Farms, a grape producer, increase energy efficiency.
IFC supported infrastructure and South-South investments through Magerwa in Rwanda, a trade logistics company with Singaporean owners. IFC also supported local currency finance in the region. In Rwanda, for example, IFC provided local currency financing through swaps facilitated through the Central Bank. IFC provided financing for telecom operator Leo Burundi, which will expand mobile telephone service in a country that is presently poorly served. IFC’s Climate Change Investment Program helped South Africa’s Karsten Farms, a grape producer, increase energy efficiency.
IFC maintained a leading role in developing the region’s financial sector, partnering with a number of banks, including Mercantile Bank in South Africa and Kenya Commercial Bank (KCB), which has subsidiaries in Uganda, Rwanda and Tanzania. IFC's loan to KCB will also be channeled to South Sudan, where KCB is currently the largest bank, with 20 branches nation-wide.
This article was originally posted on www.ifc.org
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