International Finance Corporation – IFC, a member of the World Bank Group, committed $5.6 billion to private sector development in the Middle East and sub-Saharan Africa in the fiscal year 2020, supporting businesses across the two regions to launch, grow, provide jobs and fight the impacts of the global COVID-19 Pandemic.
Also, IFC committed nearly $2 billion in short-term trade financing to support small and medium-sized enterprises (SMEs).
In sub-Saharan Africa, between July 1, 2019, and June 30, 2020, IFC committed $4.6 billion in investments to private firms across the region. Despite the challenges of delivering during a global health pandemic, IFC exceeded its fiscal year 2019 commitment of $4.1 billion.
Investments focused on sectors including healthcare, agribusiness, solar energy, housing finance, infrastructure, and financing for small and medium-sized enterprises (SMEs). Including in fragile and conflict-affected situations (FCS) where IFC committed more than $1.2 billion in investments.
In the Middle East and North Africa, where the COVID-19 Pandemic has led to declines in oil production, tourism revenues, and remittances, IFC invested more than $1 billion, including to support the construction of hospitals and clinics in Iraq, Jordan, Egypt, and Morocco.
Sérgio Pimenta, IFC Vice President for the Middle East and Africa, said, “Countries in the Middle East and Africa were making significant progress before the COVID-19 Pandemic struck and at IFC our goal was to unlock private investment and create markets and opportunities to support that progress. In the wake of the economic crisis brought on by the COVID-19 Pandemic, we stepped up the momentum to help our clients stay in business and maintain jobs which are critical to economic growth and livelihoods. We applaud the perseverance and resilience of the small, medium and large businesses that are the foundation of economies in Africa and the Middle East and we will continue to support them in the next phase of the crisis and through the recovery.”
In addition to its investments in the Middle East and Africa, IFC provided Advisory Services totalling a portfolio of more than $590 million to nearly 376 projects aimed at improving the business environment, investment policy and promotion and creating markets in priority sectors. Of the advisory projects IFC supported, 45 percent were focused on improving gender equality.
IFC’s investment and advisory work in the Middle East and Africa supported small businesses to access finance, linked small-holder farmers to markets, facilitated solutions to supply chain disruptions caused by COVID-19, and increased access to electricity and renewable power sources.
Since the coronavirus outbreak, IFC has focused its efforts on helping the private sector mitigate the impacts and the economic fallout. In March, IFC announced $8 billion in global fast-track financing to help companies affected by the outbreak. Since then, IFC has committed more than $3.5 billion to companies globally. Of that, IFC has invested $517 million in Africa and the Middle East, with 66 percent going to countries eligible for financing from the International Development Association, the World Bank Group’s fund for the poorest countries.
Among the companies IFC supported:
In Cote d’Ivoire, IFC provided a €25 million loan to NSIA Banque Côte d’Ivoire, allowing the bank to extend new loans to companies whose cash flows have been disrupted by the Covid-19 Pandemic.
In Egypt, IFC loaned $100 million to Commercial International Bank to help the bank increase support to clients and companies impacted by COVID-19.
In Kenya, IFC loaned $50 million to Equity Bank Kenya to help the bank increase working capital and trade-related lending to its SME clients.
In Mauritania, IFC provided $35 million, part of a $200 million credit facility arranged by Société Générale to enable Addax Energy S.A. to deliver critical energy imports to Mauritania.
In Nigeria, IFC provided a combined $200 million to Access, FCMB and Zenith banks for on-lending to SMEs across several sectors facing working capital or trade finance challenges.
In Uganda, IFC provided a $4 million loan, part of a $6.5 million financing package, to the International Medical Group (IMG), a subsidiary of Ciel Healthcare Limited, to enable the healthcare services provider to address the impact of COVID-19 on its operations.
Since March, IFC also deployed $886 million through the Global Trade Finance Program (GTFP) envelope of its COVID-19 Fast Track Facility to support SMEs in the Middle East and Africa. Involved in global supply chains; almost 92% of the GTFP volume deployed was in low-income and fragile countries in the regions.
For more information about IFC’s COVID-19 response kindly visit the IFC website.