Washington DC, September 30, 2002— The
International Finance Corporation, the private sector development arm of
the World Bank, today announced its partnership with the Swiss government
in the new North Africa Enterprise Development Facility (NAEDF), an up
to US$20 million effort to support small and medium enterprise (SME) growth
in Morocco, Algeria, and Egypt.
IFC has already provided $5 million from its own resources for NAEDF, and
on Sept. 27 Swiss Delegate for Trade Agreements Oscar Knapp and IFC Executive
Vice President Peter Woicke signed documents concerning Switzerland’s
SFr 4.9 million ($3.3 million) commitment to the facility. Additional donor
support is expected to be finalized in the coming weeks.
Woicke also discussed NAEDF with government officials when visiting Morocco
and Algeria earlier this month. It is expected that the new facility will
launch operations from offices in Rabat, Algiers, and Cairo.
As in many other regions of the developing world, SMEs represent the majority
of private sector firms in North Africa, but have generally not realized
their potential in generating economic growth and job creation due to a
complex set of inter-related constraining factors. But as North African
markets liberalize and foreign trade increases, new opportunities for regional
SME growth abound. NAEDF will seek to pave the way for new opportunities
and address constraints to SME growth by:
· Improving the capacity of financial institutions
that serve the market
· Improving the enabling business environment
by supporting key government initiatives that promote SME development
· Reinforcing selected local chambers of commerce
and business associations to improve the quality of business services
· Building capacity and expertise of local consulting
firms and private training institutions
· Creating linkages programs between large corporations
and SMEs in sectors such as distribution.
Woicke, who has consistently promoted small and medium enterprise development
as a key component of IFC’s global strategy, said: “This new enterprise
development facility meets a critical need for SME development in Morocco,
Algeria, and Egypt. A vibrant SME sector is critical to sustainable
job creation, poverty reduction, and private sector development. The
North Africa Enterprise Development Facility will help each country build
the necessary infrastructure for SMEs to prosper and grow.”
Knapp confirmed the Swiss government’s commitment to supporting private
sector development, and in particular SMEs, in countries with economies
in development or transition. In this context, he expressed his satisfaction
with the launching of this new facility and his hope that it will bear
as much fruit as similar facilities already managed by the World Bank Group,
most of which the Swiss government supports.
NAEDF will be managed by the World Bank Group Small and Medium Enterprise
Department, a joint initiative of IFC and the World Bank that also oversees
similar multidonor facilities in sub-Saharan Africa, Southeast Europe,
the Mekong Region of Southeast Asia (Vietnam, Cambodia, and Laos), the
Pacific islands, and China’s Sichuan province. Another new SME facility
for South Asia based in Bangladesh is expected to be launched next month.
Together these facilities now have approximately 300 field-based staff
providing technical assistance to SMEs and the companies and institutions
that support them. They represent approximately $31 million in combined
IFC and donor funding—an increasing portion of which is recovered each
year through fees the facilities charge for their services.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to 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. Since its founding
in 1956 through June 30, 2002, IFC has committed more than $34 billion
of its own funds and arranged $21 billion in syndications for 2,825 companies
in 140 developing countries. IFC’s committed portfolio at the end
of FY02 was $15.1 billion, with an additional $6.5 billion held for participants
in loan syndications.