World Bank chief pledges $15B in 3 years in post-conflict regions of Africa

Robert B. Zoellick

By Nagesh Narayana

Microfinance Focus, Feb. 1, 2010: The International Finance Corporation, the investment arm of the World Bank, has helped post-conflict regions in Africa not only to recover but build sustainable market conditions by aligning with local microfinance organisations, said  World Bank Group President Robert B. Zoellick at the African Union Summit, Addis Ababa, Ethiopia on Sunday.

“Scaling up trade finance through IFC, the World Bank’s private sector arm, has been another key element of our response to the crisis. IFC’s Global Trade Finance Program (GTFP) currently covers 27 countries in Africa, with a total of $789 million in approved trade lines. Over 80 % of the trade finance supports SMEs,” he noted.

Listing IFC activities, he cited the Malawi-based NBS Bank, which was at a disadvantage in providing trade finance for SMEs. The IFC’s GTFP made a $7 million trade line available to NBS Bank and enabled it to access a network of international banks. In its first transaction with the program, NBS Bank financed a small company importing fertilizer.

IFC is a founding shareholder of Access Bank Liberia, the first microfinance commercial bank in Liberia. After only one year of operations, Access Bank Liberia has over 10,000 clients, and a loan portfolio of $1.7 million, he cited.

In the Democratic Republic of Congo, where less than half a percent of the population has a formal bank account, IFC has invested in two microfinance banks, ProCredit and Advans, which provide a full menu of credit and savings products to micro and small entrepreneurs, he said.

To enable building for future productivity and growth, he noted that the World Bank last year invested $3.6 billion in infrastructure in sub-Saharan Africa and these projects create jobs today while improving growth prospects for tomorrow, he remarked.

Under the Joint IFI Action Plan for Africa, launched in May 2009, the World Bank joined an alliance of international financial institutions led by the African Development Bank in order to support development in Africa. Commitments to Africa will be increased by at least $15 billion over the next two to three years, he added.
Earlier, on the first leg in a visit to Africa,  he met Sierra Leone President Ernest Koroma and his cabinet and said, “I appreciated the opportunity to learn more about Sierra Leone’s  work on agriculture, feeder roads, youth employment and energy provision as progress in these areas will be important in overcoming poverty and supporting peace.”

Like Rwanda and Mozambique, Sierra Leone’s transition from emergency assistance to post-conflict reconstruction demonstrates the possibilities for countries to recover from conflict with investment and well-targeted development assistance that focuses on stimulating private sector-led growth, and on strengthening institutions that are more accountable to citizens and are able to improve the lives of the poor.

Zoellick pledged the World Bank’s support for expanding transparency and accountability when he met representatives of Sierra Leone’s Anti-Corruption Commission,  the donor community, the private sector and civil society. This should improve good governance of the natural resources sector, including newfound oil,  to prevent a relapse into conflict fueled by sales of minerals. He also pledged Bank support so that the poor can benefit from these new resources.

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