The World Bank (www.worldbank.org) continues to step up its investments into Africa, and in February expects first close on a $500 million sub-Saharan Africa, Latin America, and Caribbean private equity fund and a $200 million Africa Capitalization Fund to invest in banks that are key to stability in the banking system. This was part of the speech of World Bank Group President Robert B. Zoellick at the African Union Summit, Addis Ababa, Ethiopia on 31 January.
Zoellick said that the International Finance Corporation (www.ifc.org) is stepping up its equity investment capabilities: “We are also pioneering new ways to connect private investments to Africa. IFC recently created a new Asset Management Company (AMC) that will raise and manage private equity funds to co-invest with the IFC.”
He said the Bank was working with China to help create the infrastructure for manufacturing and other investments that will create jobs and products: “For example, Oriental China-Ethiopia Industrial Zone aims to promote the manufacturing and processing industry while functioning as a hub for trade, warehouse, and distribution. These partnerships could be a growing part of Africa’s future.
“We also are working to make Climate Investment Funds more attractive to Africa. As developed countries consider low carbon investments and funds to support adaptation, the World Bank needs to use its global reach and experience to connect Africa to these opportunities.
Other areas Zoellick emphasized were help to Africa to develop energy access and to develop IT. He told the summit gathering of Africa’s presidents and heads of state: “Sub-Saharan Africa uses only 8% of its hydro potential. And we need to connect new electricity supplies to transmission and distribution systems, preferably with regional integration, so every African has access to electricity.
“ICT is a key enabler of productivity and creator of jobs. It can help farmers, small businesses, and those excluded from traditional banking services. It can extend and speed up government services. In Ghana, the introduction of IT systems and Business Re-engineering resulted in a drop in average customs clearance time from 2-3 weeks to 1-2 days and a 50% increase in revenue. In Kenya, ICT slashed the number of days it took to register a vehicle from 30 to 1, as well as cutting off avenues for greedy hands.
He followed earlier thought leaders in the last year, also covered on this blog, in pointing to the transformations of the African economy. “With supportive government policies encouraged by World Bank knowledge service, African entrepreneurs changed facts on the ground”.