Ghana, other African countries benefit from IFC $1.8b investments
Ghana and several other African countries have benefited from the International Finance Corporation (IFC’s) $1.8 billion new investments in the continent.
The IFC, a member of the World Bank Group announced Wednesday August 19, 2009 that it had committed $1.8 billion worth of new investments across 30 countries in Africa in the fiscal year ending June 2009.
This development, the IFC says is as a result of its rapidly increased activities to help microfinance and other financial advisory services of guarantees in Africa.
These investments, according to the IFC represent a 32% increase over the $1.4 billion in its commitments last year, adding it also delivered $26.1 million worth of advisory services up from $18.6 million a year ago, 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.
Describing its activities, the IFC has said on its website that it fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.
The organization also helps companies and financial institutions in emerging markets create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities.
The IFC’s goal is to improve lives, especially for the people who most need the benefits of growth, it says.
In May 2008, the IFC announced that it was teaming up with other international financial institutions to mobilize at least $15 billion over the next two to three years to lessen the impact of the global financial turmoil on Africa.
It has further promised to 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.
In Ghana, the IFC has invested in the development of the country’s offshore oil and gas project that will help diversify Ghana’s economy, meet domestic power demand, and generate revenue to support the country’s economic growth and development.
It will provide a loan of $100 million to Kosmos Energy, one of the key partners developing Ghana’s Jubilee oil field, said to be largest to be discovered in West Africa in the last 10 to 15 years. The IFC’s loan is part of a $750 million debt package for U.S.-based Kosmos that IFC helped mobilize, primarily from commercial banks. It also signed a $115 million loan agreement with London-based Tullow Oil, another key partner in the Jubilee field, bringing IFC’s support for the project to $215 million.
Commercial production of oil in Ghana is expected to begin in June 2010.
Dr Kwabena Donkor, Deputy Minister of Energy had said that under Phase One of the Jubilee Field project, 120,000 barrels of oil and 120,000 million standard cubic feet of dry gas per day would be produced in 2010.
Production would be increased to 240,000 barrels of oil and 240,000 million standard cubic feet of gas per day under the second phase of the Jubilee Field project which is expected to commence in 2013.
Ghana also benefited from an IFC support to strengthen Africa’s banking sector and increase lending to small and medium enterprises when it provided a financing package of over $200 million to Ecobank Transnational Inc., a pan-African bank with a network of over 500 branches in 27 countries.
Stanbic Bank Ghana also benefited from a $30 million guarantee facility from the IFC to help it increase financing to companies that purchase cocoa from small farmers in the country.
Zain Ghana has also gone to the IFC to borrow $160 million to fund its expansion plans. (see story)
The Bloomberg news service reported in July 2009 that Zain Ghana will receive a $90 million loan from the IFC and $70 million in syndicated loans.
Some of the countries that have benefited from the IFC’s support include Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Nigeria, Senegal, and Togo. The others are Principe and Sao Tome, Uganda, Kenya, Uganda, DR Congo, Sudan Central African Republic and Ethiopia.
By Emmanuel K. Dogbevi