These types of stories should always interest us. See WHO is investing in Africa in these days, investigate as to WHY and then we must prepare to see how we as a people can still control our own destiny as the continent grows. The President of World Bank Group, Jim Yong Kim, who is visiting Rwanda has announced a record $57 billion towards financing different projects in sub-Saharan Africa over the next three fiscal years. According to a World Bank statement, the bulk of the financing for sub-Saharan Africa – $45 billion – will come from the International Development Association (IDA), the World Bank Group’s fund. The financing will also include an estimated $8 billion in private sector investments from the International Finance Corporation (IFC), and $4 billion in financing from International Bank for Reconstruction and Development, a public sector arm.
The World Bank’s Board of Executive Directors also approved $150 million financing in support of the Moroccan government to enhance social programs and support small enterprises over the next five years, through a result-based financing – whereby funds are disbursed upon completion of agreed objectives. Along with resources, the Word Bank will provide technical assistance to help the country develop the institutional, legal, and operational frameworks to ensure the proper use and sustainability of the new systems.
“This represents an unprecedented opportunity to change the development trajectory of the countries in the region,” Kim said in a statement. “With this commitment, we will work with our clients to substantially expand programs in education, basic health services, clean water and sanitation, agriculture, business climate, infrastructure, and institutional reform.”
The $50 million Financing Innovative Startups and Small and Medium Enterprises (SMEs) project for Morocco, approved recently, will help address a market gap in the supply of equity financing for innovative young small and medium enterprises. Evidence from the Middle East and North Africa Region shows that startups have the highest contribution to net job creation. Almost 5.3 million Moroccans, of which two-thirds from rural areas, live under the threat of falling back into poverty due to their socio-economic conditions. The $100 million Identity and Targeting for Social Protection Project aim to develop systems to ensure that social programs are better targeted and reach the most vulnerable Moroccans.
Morocco’s goals include modernizing its national identification system and financing to promote innovative startups and job creation. Despite being the best regional performer with regard to access to finance for SMEs, Morocco has not been able to support innovative and high-growth potential firms at the initial stages of their development. “Young small enterprises are faced with challenges to mobilize financing; mainly because banks cannot finance start-ups (without substantial collateral) due to their lack of an existing sustainable revenue stream, and their perceived high risk, said Randa Akeel, Senior Financial sector specialist and Task Team Leader. With an aim of enhancing social and economic inclusion, the two operations will enable better identification of individuals for better targeting of social programs and lifting barriers to accessing finance for startups and small enterprises.
The IDA financing for operations in Africa will be critical to addressing roadblocks that prevent the region from reaching its potential. To support countries’ development priorities, scaled-up investments will focus on tackling conflict, fragility, and violence; building resilience to crises including forced displacement, climate change, and pandemics; and reducing gender inequality.
Overall, the project will contribute to increasing Morocco’s innovative private sector through the creation of a Venture Capital market in Morocco. Efforts will also promote governance and institution building, as well as jobs and economic transformation. “This financing will help African countries continue to grow, create opportunities for their citizens, and build resilience to shocks and crises,” Kim said.