The International Finance Corporation, a member of the World Bank Group which mainly supports the private sector, has increased its investment portfolio to Sub-Saharan Africa to help accelerate economic development on the continent.
At the end of the 2007 financial year, IFC committed a total of $3.1 billion as against $2.2 billion it committed at the end of the 2006 financial year.
Most of the investments made during the year were concentrated on the financial sector, extractive industries and general manufacturing and services.
The number of projects equally increased from 38 in 2006 to 52 while the number of countries the corporation extended facilities to also increased from 11 to 17.
According to the 2007 financial report, various investments in Africa have made significant development contributions.
In 2006, for example, the report stated that operators in the extractive industries contributed $1.74 billion to government revenue while $1 billion was extended to medium and small scale enterprises.
Of this, Nigeria, South Africa and Kenya were the greatest beneficiaries of the various credit facilities.
The increase in the financial commitment of the IFC is based on the present sound political and economic environment on the continent.
“Macro-economic reforms and reduced conflicts have spurred sustained growth in many countries, averaging 5.3 per cent in 2006 with increased confidence in the investors,” according to the report.
The report, however, stated that despite marked improvement in recent years, environmental and social performance continues to be comparatively weak: the poor performance of financially struggling firms and small companies, as well as weak regulatory framework and enforcement.
The report said this could make it very challenging to achieve compliance with global performance standards.