WASHINGTON, January 28, 2011—Africa needs the right institutions, policies and investments in order to boost private sector development and improve its attractiveness as a destination for foreign direct investments, World Bank Vice President for the Africa Region Obiageli Ezekwesili said Tuesday.
“Africa is ready ‘big time’ for a private sector that must be the cornerstone of the next phase of Africa’s robust, pro-poor, inclusive and job-creating growth,” Ezekwesili told a group of African ambassadors during a luncheon in Washington, DC.
Tuesday’s event was the third edition of this function organized biannually by the Office of the Executive Director of Africa Group I Constituency to discuss ways of ensuring that the African countries he represents benefit fully from the support of the World Bank Group, in general, and from the support provided through the Bank’s fund for the poorest countries, IDA; the Bank’s private sector arm, IFC; and the services provided by the Multilateral Insurance Guarantee Agency, MIGA.
The main objective was to introduce the new Executive Director Mr. Hassan Ahmed Taha, to the ambassadors of the countries represented at the World Bank Group by his office. But, as during the two previous editions, the Executive Director used the opportunity to invite management of the World Bank Group to make presentations around the theme “Promoting Private Sector Development and Foreign Direct Investment in Africa – the Role and Strengths of the World Bank Group”.
“This is not only important, but timely… because our countries are more focused now than before on enhancing and maximizing on the contribution of the private sector to the important objective of promoting growth and reducing poverty,” said Executive Director, Mr. Hassan Taha, in his welcome address before inviting Ms. Ezekwesili to give opening remarks.
The continent’s path to and responsibility for success, said Ms. Ezekwesili, lies in African governments, private sector operators and citizens – not foreigners or international organizations – working more collaboratively to create jobs, especially for women and for the seven-to-ten million African youngsters joining the ranks of the job seekers every year.
“The private sector will be the catalyst for the next growth phase in Africa,” echoed James Bond, Chief Operating Officer of the World Bank’s Multilateral Guarantee Agency (MIGA).
African countries, said Ms. Ezekwesili, need to take advantage of the continent’s remarkable rebound from the global food, fuel and financial crises to consolidate macroeconomic stability; build capacity for entrepreneurship; boost African indigenous businesses; and explore ways of directing remittances into investments.
According to her, countries emerging from violent conflict and other forms of fragility need to set the foundation for stable and capable institutions and help bring about the more inclusive political, social and economic initiatives needed to expand opportunities and curb poverty.
The primary responsibility is that of Africa, she said, warning: “Remember, the world does not owe Africa a favor.”
“We believe that it is important that we work together in order for our countries to maximize access to the resources and services provided by the World Bank Group,” said Executive Director Mr. Hassan Ahmed Taha, explaining that he wanted the the event “to initiate and promote cordial consultations between our office and your offices on issues of interest to our countries”.
The World Bank has pioneered new ways to draw private investors to Africa through the Asset Management Company (AMA) of its private sector arm the International Finance Corporation (IFC), explained James Emery, Head of the Strategy and Coordination Unit in the Africa Department at the IFC.
“AMA raises and manages private equity funds with which the IFC co-invests on the continent,” Emery told the African envoys in attendance.
With only US$200 million in investments in Africa seven years ago, IFC investments on the continent were worth a total US$2.4 billion last year.
The IFC, which also provides investments and advisory services to build the private sector in development countries, runs a US$1 billion fund that takes equity positions in companies in Africa, Latin America, and the Caribbean in addition to a Capitalization Fund which invests in important African banks.