The International Finance Corporation (IFC) announced that it committed to $1.8 billion worth of new investments across 30 countries in Africa in the fiscal year ended June 2009. The private sector investment arm of the World Bank Group rapidly increased activities to alleviate the impact of the global financial crisis on Africa’s poorest regions.
IFC earlier announced in May it is teaming up with other international financial institutions to mobilize at least $15 billion over the next 2 to 3 years to lessen the impact of the global financial turmoil on Africa. IFC will contribute at least $1 billion to promote trade, strengthen the capital base of banks and promote microfinance lending, and increase lending for infrastructure projects and other real sectors of the economy experiencing a shortfall in liquidity.
The 2009 commitment is 32% more than $1.4 bln in commitments (FY08), and the largest volume since its founding in 1956. IFC also delivered $26.1 mln worth of advisory services (up from $18.6 mln) as it expanded activities to have more impact in countries affected by conflict and where the private sector is at the very early stages of development.
According to an IFC press release (www.ifc.org), Jean Philippe Prosper, IFC Director for Eastern and Southern Africa says: “IFC stepped up financing and advisory services amid the turmoil in global financial markets to encourage African trade and investment flows and alleviate the impact of the global economic slowdown on the Africa’s most vulnerable.”
IFC continued to extend its regional reach in Africa to countries where it has traditionally been less active. IFC last year committed its first investment in Sao Tome and Principe, which became an IFC member state in October 2008, and opened new offices in the Central African Republic and Ethiopia (May 2009).
IFC’s strategy in Africa is based on three main components: improving the investment climate, enhancing support to small and medium enterprises, and developing new projects to support investments. IFC is also focusing on building infrastructure, advancing health care, developing agribusiness, reforming the investment climate, and promoting the recovery of countries affected by conflict.