Washington, D.C., May 25, 2006–The
Board of Directors of the International Finance Corporation (IFC), the
World Bank Group’s private sector arm, approved today a $30 million grant
to the Investment Climate Facility for Africa. The facility is a new public-private
partnership for improving the continent's investment climate. IFC will
also contribute expertise to the facility, based on 50 years of experience
investing in the private sector in developing countries.
According to the World Bank and IFC’s most recent Doing Business report,
African businesses face the world’s highest levels of regulatory obstacles
to entrepreneurs. Africa has also been the world’s slowest region to reform
its investment climate. Major reforms are needed to establish the conditions
necessary for growth.
“Entrepreneurs, especially small businesses, are the engine for growth
and job creation,” said Paul Wolfowitz, President of the World Bank Group.
“Now that Africa is on the path of macroeconomic stability, significant
reforms in the business-enabling environment are needed to unlock investment
and productivity growth,” he added.
The Investment Climate Facility for Africa is an independent trust with
strong African representation on its Board of Trustees. It provides a mechanism
through which the private sector, donors, and African governments and institutions
can support Africa's vision for sustainable growth and development.
The objectives of the Investment Climate Facility for Africa are to:
will be tracked in terms of performance against a set of indicators, including
increases in productive investment; firm start-ups; jobs created; levels
of trade and production; and, above all, increased economic growth.
- ·Build the environment for investment
- Encourage, develop, and work with coalitions
for investment climate reform.
- Get the investment climate right.
- Support governments in creating a legal,
regulatory, and administrative environment that encourages businesses at
all levels to invest, grow, and create jobs.
- Enhance Africa’s business climate
- Improve Africa's image as an investment
destination through a coordinated effort to publicize improvements in the
“Improving the investment climate is one of IFC’s strategic priorities
for Africa,” said Lars Thunell, IFC's Executive Vice President. “We plan
to contribute to the Investment Climate Facility not only through a financial
contribution but also by leveraging IFC’s client and partner network and
facilitating active private sector participation in the reform process,"
The Investment Climate Facility for Africa aims to reduce investment climate
constraints across Africa by working in eight priority areas:
registration and red tape
Currently, IFC supports investment climate reform in Africa through the
business enabling environment program of the Private Enterprise Partnership
for Africa (PEP-Africa) and through the Foreign Investment Advisory Service's
Africa program. PEP Africa and FIAS are providing support to the Investment
Climate Facility for Africa in designing and implementing reform priorities.
About the Investment Climate Facility for Africa (ICF):
ICF is a public-private partnership
established as an independent trust with a seven-year lifespan, headquartered
in Johannesburg, South Africa. The co-chairmen are Benjamin Mkapa (former
President of Tanzania) and Niall FitzGerald (Chairman of Reuters), and
the Board of Trustees includes prominent businessmen and political figures
from Africa and beyond. ICF will work closely with the African Development
Bank and has been endorsed by the Report of the Commission for Africa (2005),
the G8 at Gleneagles in July 2005, and NEPAD. Three multinational
firms, Shell, Unilever, and Anglo American, have also contributed financial
resources. Discussions are underway with other African and international
firms to build on this endeavor. The initial fundraising target for the
facility is $100 to 120 million. For more information, visit:
About the International Finance
IFC is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies. The
mission of IFC is to promote sustainable private sector investment in developing
and transition 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, helps clients
improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.