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World Bank’s IFC to Increase Lending to Portuguese-Speaking African Countries 

World Bank’s IFC to Increase Lending to Portuguese-Speaking African Countries 

The International Finance Corporation, an institution of the World Bank, wants to increase the volume of financing in Portuguese-speaking countries as part of the institution’s commitment to projects on the African continent, said the vice-president of the institution.

In an interview with Lusa, Sérgio Pimenta explained that “Africa is a priority for the International Finance Corporation (IFC), particularly in Portuguese-speaking countries, where there is still a small client portfolio”.

Sérgio Pimenta attended the summit of the Community of Portuguese-Language Countries (CPLP), held last week in Sao Tome and Príncipe, to talk to partners and promote the organisation, which only works with the private sector, unlike the World Bank, which supports public projects.

Most of the projects financed are in Mozambique

The IFC already has an office in Mozambique, opened an office in Angola four years ago and has had a new liaison point in Cabo Verde since the beginning of the year.

“In recent years, we have invested more than $4 billion (€3.7 billion) in Portuguese-speaking countries in Africa, and to that, we add almost $1 billion (€920 million) in short-term lines,” he explained.

Most of the projects financed are in Mozambique and, to a lesser extent, Angola, “but this year, for example, we made our first long-term investments in Cabo Verde, and I’m very excited to see that, in both Sao Tome and Príncipe and Guinea-Bissau, we now have opportunities that I think will materialise in the coming months,” said Sérgio Pimenta.

“The International Finance Corporation is the World Bank Group institution that supports the development of the private sector. We are a legally separate entity, we have our own balance sheet, we raise our own financial resources on the market, and we invest these financial resources in private sector companies in developing countries,” he summarised, noting that the organisation also provides support and advice to companies or governments on investment or management projects.

“In the financial year just ended, we provided record funding in Africa, with more than $11 billion (€10.2 billion),” a figure “never reached before,” he said, emphasising that in many cases, these projects are in smaller countries where this funding is decisive.

Companies with candidate projects or banks that need to top up third-party loans can access the funding. The IFC also leverages partnerships with development institutions.

But Sérgio Pimenta emphasises that one of the institution’s main focuses is to identify weaknesses and look for financing solutions: “We see a problem, we see a development issue that hasn’t been resolved, and we say ‘OK’, how do we find a solution?”.

An example of this was what was done during the pandemic when the IFC supported the production of vaccines in African companies as part of the international organisations’ priorities for the continent.

“I’d rather invest in Africa than in another continent,” said Sérgio Pimenta, who also praised the project for a continental free trade area.

This project “will completely change the continent’s business fabric”, admitting that the project will “take some time”, as is the case in other parts of the world.

“What I find interesting is that it’s primarily a political project, but then it’s also an economic project, and it’s a project that African companies are really subscribing to much more strongly than previously thought,” he said.

For the free trade area to materialise, internal procedures, transport and logistics need to be resolved.

“This all has to be simplified,” he said, considering that African companies are increasingly investing in an “intra-African dimension”.

Regarding countries like Angola or Equatorial Guinea, whose economies are very dependent on oil exploitation, Sérgio Pimenta considered that “diversifying the economy is what brings resilience” to countries in the face of crises.

“It’s important to have that resilience. It’s important to have this diversification now,” which must be articulated on a regional scale on the continent.

“One of the themes we are very much encouraging is what we call regional value chains,” seeking to transform the raw materials collected not necessarily in the country of origin but at the regional level.

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The aim is to keep part of the value chain associated with the exploitation of commodities in each region.

The CPLP includes Angola, Brazil, Cape Verde, Guinea-Bissau, Equatorial Guinea, Mozambique, Portugal, São Tomé and Príncipe and Timor-Leste.




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