More investment earmarked for Africa

SINGAPORE – The World Bank’s private sector arm, criticised by civil society for investing largely in middle-income countries, will ratchet up its projects in Africa and poor regions, the agency’s head said yesterday.

“We are getting more and more represented in Africa and I expect that to continue,” International Finance Corp. chief Lars Thunell said.”I’m going to make sure it happens.”A third of last year’s US$8,3 billion in investments went to Latin America and the Caribbean compared with 16 per cent to Africa and the Middle East – two of three priority “frontier markets” Thunell has singled out.Rural western China is his other priority region.Sub-Saharan Africa, where a large number of low-income countries are concentrated, got 42 per cent of the IFC’s technical assistance – advice on laws, regulations and good governance – out of last year’s US$200 million in those services.”It will definitely happen in the number of projects, but the average size of projects are small in Africa and in some middle-income countries,” he said.To the extent that different countries are at varying stages of development, and have comparative advantages, the IFC should follow a step-by-step approach to project financing, he said.Once fundamentals are in place or being established, then the IFC should focus on a country’s competitive advantages, be it shoes in Vietnam or textiles in Bangladesh, he added.In middle-income countries where the IFC has gone through those stages, Thunell wants to see the lender drilling down to seek out small and medium-sized firms with which to work or fund projects in rural areas, as it is doing in Turkey at present.China’s request for IFC projects in its western hinterland, where an estimated 500 million people live on US$2 a day, runs from infrastructure to power generation and banking, he said.Nampa-Reuterschief Lars Thunell said.”I’m going to make sure it happens.”A third of last year’s US$8,3 billion in investments went to Latin America and the Caribbean compared with 16 per cent to Africa and the Middle East – two of three priority “frontier markets” Thunell has singled out.Rural western China is his other priority region.Sub-Saharan Africa, where a large number of low-income countries are concentrated, got 42 per cent of the IFC’s technical assistance – advice on laws, regulations and good governance – out of last year’s US$200 million in those services.”It will definitely happen in the number of projects, but the average size of projects are small in Africa and in some middle-income countries,” he said.To the extent that different countries are at varying stages of development, and have comparative advantages, the IFC should follow a step-by-step approach to project financing, he said.Once fundamentals are in place or being established, then the IFC should focus on a country’s competitive advantages, be it shoes in Vietnam or textiles in Bangladesh, he added.In middle-income countries where the IFC has gone through those stages, Thunell wants to see the lender drilling down to seek out small and medium-sized firms with which to work or fund projects in rural areas, as it is doing in Turkey at present.China’s request for IFC projects in its western hinterland, where an estimated 500 million people live on US$2 a day, runs from infrastructure to power generation and banking, he said.Nampa-Reuters