IFC, a member of the World Bank Group, plans to invest US$30 million in Guinea in 2015, with a view to boosting support for small and medium enterprises in the African country, which are critical for job creation and economic growth.
Guinean President Alpha Condé said: “We need to build a strong, competitive Guinean private sector capable of creating jobs – empowering our youth and women who are the drivers of change. This is critical in implementing the transformation we need to achieve the inclusive and fast paced development Guinea needs.”
Conde was speaking when he met the IFC Executive Vice President and CEO, Jin-Yong Cai, last week at the World Economic Forum Annual Meeting in Davos, Switzerland.
“It is estimated that even before the Ebola crisis began, SMEs in Guinea faced a US$900 million financing gap, with only 6% of firms able to access the credit they need,” said Cai on the sidelines of the World Economic Forum in Davos.
“SMEs are critical to job growth and economic recovery, and IFC is working through our financial intermediary and corporate clients to ensure SMEs have the capital and access to markets they need to grow, as well as training and capacity building to boost their competitiveness,” he said.
Over the past three years, IFC has made US$10.5 million of investments in Guinea, targeting the critical SME sector through three partner financial institutions. The Corporation has a pipeline of US$30 million targeted to reach more than 600 SMEs through risk sharing facilities.
These investments will have an increased focus on women and the agribusiness sector in particular. This is in addition to the US$17.5 million in support IFC announced November 2014 under its Ebola Emergency Liquidity Facility through two Guinean banks.
IFC’s Global Trade Finance Programme has supported a total of US$582 million in trade since its introduction in the country. IFC-support training programmes have reached 1000 SMEs through its Africa Leasing Programme and SME training tool IFC Business Edge, with plans to reach hundreds more in the near future.
IFC is also supporting public-private dialogue platforms, rolling out the IFC investment climate programme – designed to improve business regulation, investment and tax policy – and helping the energy sector improve the quality of service provided to SMEs and other private sector players.
This includes the development of a national local content policy, and technical assistance to mining companies in areas such as procurement.
For example, IFC’s partnership with Rio Tinto in the Simandou mine construction project in Guinea is expected to create 10,000 jobs at the height of construction. IFC estimates that 3,500 SMEs will be suppliers to Simandou once it reaches a steady state of operations, creating an estimated additional 20,000 jobs.
The World Bank Group is mobilizing nearly US$1 billion in financing for the countries hardest hit by the Ebola crisis. This includes US$518 million from IDA for the emergency response, and at least US$450 million from IFC to enable trade, investment and employment in Guinea, Liberia and Sierra Leone.