Related News

International Finance Corporation (IFC), the World Bank Group’s private sector arm, has approved a US$30mn grant to the Investment Climate Facility for Africa. The facility is a new public-private partnership for improving the continent’s investment climate. IFC will also contribute expertise to the facility, based on 50 years of experience investing in the private sector in developing countries.

According to the World Bank and IFC’s most recent Doing Business report, African businesses face the world’s highest levels of regulatory obstacles to entrepreneurs. Africa has also been the world’s slowest region to reform its investment climate. Major reforms are needed to establish the conditions necessary for growth.

“Entrepreneurs, especially small businesses, are the engine for growth and job creation,” says Paul Wolfowitz, president of the World Bank Group. “Now that Africa is on the path of macroeconomic stability, significant reforms in the business-enabling environment are needed to unlock investment and productivity growth.”

The Investment Climate Facility for Africa is an independent trust with strong African representation on its board of trustees. It provides a mechanism through which the private sector, donors, and African governments and institutions can support Africa’s vision for sustainable growth and development.

The objectives of the Investment Climate Facility for Africa are to:

  •  Build the environment for investment climate reform
  •  Encourage, develop, and work with coalitions for investment climate
  •  Get the investment climate right
  •  Support governments in creating a legal, regulatory, and administrative
    environment that encourages businesses at all levels to invest, grow, and create jobs
  •  Enhance Africa’s business climate image
  •  Improve Africa’s image as an investment destination through a coordinated effort to publicise improvements in the investment climate
    Progress will be tracked in terms of performance against a set of indicators, including increases in productive investment; firm start-ups; jobs created; levels of trade and production; and, above all, increased economic growth.

    “Improving the investment climate is one of IFC’s strategic priorities for Africa,” says Lars Thunell, IFC’s executive vice-president. “We plan to contribute to the Investment Climate Facility not only through a financial contribution but also by leveraging IFC’s client and partner network and facilitating active private sector participation in the reform process.”

    The Investment Climate Facility for Africa aims to reduce investment climate constraints across Africa by working in eight priority areas:
    1.    Property rights
    2.    Taxation and customs
    3.    Infrastructure facilitation
    4.    Competition
    5.    Business registration and red tape
    6.    Financial markets
    7.    Labour markets
    8.    Corruption and crime

    Currently, IFC supports investment climate reform in Africa through the business enabling environment programme of the Private Enterprise Partnership for Africa (PEP-Africa) and through the Foreign Investment Advisory Service’s Africa programme. PEP Africa and FIAS are providing support to the Investment Climate Facility for Africa in designing and implementing reform priorities.

    ICF is a public-private partnership established as an independent trust with a seven-year lifespan, headquartered in Johannesburg, South Africa.

    The co-chairmen are Benjamin Mkapa (former president of Tanzania) and Niall FitzGerald (chairman of Reuters), and the board of trustees includes prominent businessmen and political figures from Africa and beyond. ICF will work closely with the African Development Bank and has been endorsed by the Report of the Commission for Africa (2005), the G8 at Gleneagles in July 2005, and Nepad.

    Three multinational firms, Shell, Unilever, and Anglo American, have also contributed financial resources. Discussions are underway with other African and international firms to build on this endeavour.

    The initial fundraising target for the facility is US$100-120mn. 

    For more information, visit