By Special Correspondent
THE International Finance Corporation (IFC) said on Tuesday this week that it had boosted its investments in sub-Saharan Africa by more than 30% over the past year but was still lagging far behind demand.
The World Bank’s private sector arm said it committed $5.3bn in the year to June 30, compared with $4bn in the previous year.
It co-financed hundreds of projects ranging from solar power in the Northern Cape to a giant warehouse to store tea in Mombasa, Kenya.
“To be honest, the market is asking for even more — this is Africa’s decade,” said Saleem Karimjee, the IFC’s senior manager in Southern Africa.
“The need is more than we can meet without blowing a gasket.”
Mr. Karimjee, a Tanzanian, said the IFC provided a clear measure of how Africa’s fortunes are transforming.
In the past nine years its annual loans had risen from $500m to more than $5bn, he said on Tuesday at the corporation’s Africa headquarters in Illovo, Johannesburg.
Acting as “the bankers’ bank” in Africa — lending to financial institutions which can lend on to smaller enterprises — accounted for 45% of IFC activity on the continent. The second-biggest sector was physical infrastructure, with power generation in pole position, and third was agribusiness.
Overall, the IFC said its funding for infrastructure and natural resources projects in sub-Saharan Africa has reached $1.7bn and $600m in agribusiness.
The corporation’s mandate as a development agency, as well as a financial institution, means it has to measure its success in terms of improving health, education and employment — among other indicators — rather than pure profitability and creditworthiness.
“So there are many development indicators. If we are not doing this kind of thing we have no purpose,” Mr. Karimjee said.
One-third of the 50 countries globally which were deemed to be making the most progress in easing domestic business regulation since 2005 were in Africa, according to the 2013 Doing Business report.
The IFC is a shareholder in the troubled pan-African lender Blue Financial Services, which failed earlier this year to publish its financial results for the second year running.
Asked about the current situation, Mr. Karimjee said: “I have to be careful because it is a JSE-listed company.
“But it is in rescue, in recovery, and we bought in to the recovery plan. We think they’ve got a sensible plan and we would like it to succeed.”
Other Blue Financial funding partners were, among others, Standard Chartered Bank and the Opec Fund for International Development.
The IFC’s major hub in Southern Africa was previously Harare, but that ended in 2000 when the political and economic decline in SA’s northern neighbour was gathering pace and Zimbabwe’s indebtedness to the World Bank was unresolved.
“It was one of our best markets until we had to close shop.
“In fact, the Joburg office of the IFC was born from the closure of the Harare office,” Mr Karimjee said yesterday.
Zimbabwe’s isolation may be gradually drawing to an end after non-violent elections on July 31 which saw 89-year-old President Robert Mugabe returned to office with a thumping majority, and to the ringing applause of Southern African regional leaders.
Zimbabwe is still in arrears with payments to international financial institutions, but Mr. Karimjee said the fact that it now has what is called a staff-monitored programme with the International Monetary Fund was a “positive sign”.