The World Bank announced Wednesday that it will set aside, through the International Finance Corporation (IFC), $2 billion to support small and medium-sized businesses in Africa struggling to recover from the effects of the covid-19 pandemic.
“The IFC will invest $1 billion in direct financing for small and medium-sized enterprises, the backbone of African economies, and will invest another $1 billion to support international trade finance and facilitate the flow of imports and exports of essential goods, including food and medical products,” reads a statement distributed in Paris.
The announcement comes a day after the Paris summit on the financing of African economies, which sought solutions to increase the financial capacity of African countries and proposed a new model of cooperation for the continent.
“The $2 billion amount is among the largest ever presented by IFC for specific initiatives in Africa and comes in a context where the continent is struggling with the consequences of the covid-19 pandemic, which has sunk the region’s economy into recession, reduced foreign direct investment flows, and pushed millions of Africans into poverty,” the note pointed out.
Despite having been relatively spared in terms of health consequences, with about 130,000 deaths, the African continent is one of the most affected in economic terms, not only by the lack of means to finance economic development, but also by the little budgetary room for maneuver to combat the spread of the pandemic.
According to the International Monetary Fund, African countries need nearly 300 billion dollars, to combat poverty, develop their infrastructure and face climate change and the threat of terrorism.
