The International Finance Corporation (IFC), a member of the World Bank Group, has committed $5.6 billion to private sector development in the Middle East and sub-Saharan Africa in the fiscal year 2020.
The support is to aid businesses across the two regions to launch, grow, provide jobs and fight the impacts of the global COVID-19 pandemic.
A statement issued in Accra said in addition, the Corporation has committed nearly $2 billion in short-term trade financing to support small and medium-sized enterprises (SMEs).
It said in sub-Saharan Africa, between July 1, 2019 and June 30, 2020, IFC has 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.
It said its investments focused on sectors include healthcare, agribusiness, solar energy, housing finance, infrastructure, and financing for SMEs, including in fragile and conflict-affected situations where IFC committed more than $1.2 billion in investments.
In the Middle East and North Africa, where the COVID-19 pandemic had led to declines in oil production, tourism revenues, and remittances, IFC has invested more than $1 billion, including to support the construction of hospitals and clinics in Iraq, Jordan, Egypt, and Morocco.
Mr Sérgio Pimenta, IFC Vice President for the Middle East and Africa, said, “Countries in the Middle East and Africa are making significant progress before the COVID-19 pandemic struck and at IFC our goal is to unlock private investment and create markets and opportunities to support that progress.”
He said in the wake of the economic crisis brought on by the COVID-19 pandemic, IFC stepped up the momentum to help its clients stay in business and maintain jobs which were 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,” it added.
He said in addition to its investments in the Middle East and Africa, IFC has 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.
He said of the advisory projects IFC supported, 45 per cent were focused on improving gender equality.
IFC’s investment and advisory work in the Middle East and Africa has 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 and of that, IFC has invested $517 million in Africa and the Middle East, with 66 per cent going to countries eligible for financing from the International Development Association, the World Bank Group’s fund for the poorest countries.
The IFC provided €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.
The Corporation also provided a combined $200 million to Access, FCMB and Zenith banks for on lending to SMEs across a number of sectors facing working capital or trade finance challenges.
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 per cent of the GTFP volume deployed was in low-income and fragile countries in the regions.