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IFC SETS NEW STRATEGY FOR AFRICA


L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: Ljoseph@ifc.org


WASHINGTON, D.C., September 27, 1999 — The International Finance Corporation has long invested in Africa, but it has recently refocused and given a new priority to its support of the private sector in the region. IFC's new strategy focuses on building up the telecommunications, electric power systems, and transportation networks needed to do business, expanding the ability of African financial institutions to finance private investment, and nurturing African-owned enterprises with financing, advice, and start-up help. A new publication, Building the Private Sector in Africa to Reduce Poverty and Improve People's Lives, describes the strategy.
In order to develop infrastructure, IFC has invested in, and was instrumental in launching, the largest private equity fund ever assembled for Africa, the $400 million AIG African Infrastructure Fund. The project sponsor and lead co-investor is American International Group, the leading U.S.-based international insurance organization. This was just the latest initiative in IFC's approach to strengthening the role of the private sector in developing physical infrastructure.
The strategy also emphasizes development of financial markets and support for financial institutions that can, in turn, support smaller businesses. And IFC is finding many ways to encourage indigenous African entrepreneurship through financing, technical assistance, and advisory services. In addition, IFC will continue to finance projects in sectors where a country has a comparative advantage.
"Africa has made substantial economic progress and now stands at an important crossroads," IFC Executive Vice President Peter Woicke writes in the foreword to this book, but future progress depends on the ability "to sustain economic growth led by the private sector."
The book examines the factors that contribute to that private-sector-led economic growth. It goes on to analyze the state of private sector development in the region and IFC's experience there, with a focus on the decade of the 1990s. And it presents the new IFC strategy for supporting private investment in the region.
The book includes steps that IFC has taken to enhance its operations in Africa, including more resources for offices in Africa and creating hubs in Abidjan, Johannesburg, and Nairobi to serve subregions. IFC has also established various pioneering facilities to finance smaller investments.
Cesare Calari, IFC's director for Sub-Saharan Africa, said that many African economies are rebounding with new flows of private investment, and that IFC is helping translate that trend into sustained economic growth that benefits all Africans.
In the 1999 fiscal year, IFC approved 80 new investments in Africa, for US$357 million. The projects financed amounted to $1.5 billion of new investment in Africa. IFC's committed portfolio in Africa now exceeds $1 billion. In Africa, IFC accounts a higher portion of the total private investment than in other regions, making it the most important provider of finance to the private sector among multilateral and bilateral organizations.
Building the Private Sector in Africa to Reduce Poverty and Improve People's Lives
may be ordered by calling IFC at 202-473-7711. Journalists can obtain the book by contacting Lana Moriarty at 202-473-6005 (phone), 202-974-4384 (fax), or
lmoriarty@ifc.org (e-mail).
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.