Ouagadougou, Burkina Faso, 12 May 2015 —IFC,
a member of the World Bank Group, and Société Générale announced
the launch of a €70 million facility to help Burkina Faso’s biggest cotton
company, SOFITEX, support local farmers and finance the 2014/15 cotton
Signed under IFC’s Global Warehouse Finance Program, the facility will
allow SOFITEX to purchase raw cotton from over 160,000 farmers in Burkina
Faso to process and export to international markets. Cotton is the main
cash crop in Burkina Faso, which is currently under a transitional government.
Shifts in global demand and commodity prices make it difficult for cotton
companies to secure finance. Through the facility, IFC, GAFSP and Société
Générale will lend to SOFITEX against warehoused commodities, providing
the company with liquidity to finance its crop purchases.
Mr. Bernard Gnessa Zougouri, the Chief Executive Officer of SOFITEX, said,
“Financing to support our cotton purchases during the harvest is important
to our ability to maintain operations and to buy from the many farmers
that supply our business.”
Saran Kebet-Koulibaly, IFC Director for West and Central Africa said, “IFC,
GAFSP and Société Générale’s partnership with SOFITEX demonstrates our
confidence in Burkina Faso’s cotton sector and commitment to supporting
business that will revitalize economic activity during a political transition.”
Working with local farmers, suppliers and distributors, SOFITEX is playing
a significant role in job-creation, accounting for nearly 80 percent of
Burkina Faso’s cotton production. The cotton sector is also the country’s
largest employer and the second foreign currency earner, providing a livelihood
to over 3 million people. This financing is vital for Burkina Faso’s agricultural
and rural population, in the face of significant economic, political and
Donor partners to the Private Sector Window of GAFSP are the governments
of Canada, Japan, the Netherlands, the U.K. and the U.S. This funding makes
it possible for IFC to invest in unusual and/or riskier projects with strong
potential to promote food security and reduce poverty.
Agribusiness plays a vital role in Sub Saharan Africa’s economic development,
contributing to economic growth, employment and foreign exchange earnings
in many countries. In fiscal year 2014, IFC invested $723 million in agribusiness
in Sub Saharan Africa.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org
IFC Global Warehouse Finance Program
IFC’s Global Warehouse Finance Program (“GWFP”), created in 2010, aims
to increase working capital financing to farmers and agricultural players
by leveraging their production. The program supports the agriculture sector
by providing liquidity or risk coverage backed by warehouse receipts or
other inventory financing schemes, which are used to provide financing
in the form of short term loans to producers and traders ahead of export.
To date, IFC has financed US$5.1 billion commodity finance transactions
in more than 20 countries. The program is expected to reach up to 241,000
farmers across emerging markets in all regions and contribute to food availability
for 15 million people by 2017.