The World Bank has announced that it will invest $2 billion to support medium and small businesses in Africa and boost trade as the region recovers from the COVID-19 downturn.
The International Finance Corporation (IFC), the bank’s development arm focused on private-sector development in emerging markets, will invest $1 billion in direct financing for businesses and another $1 billion in support of international trade finance.
The combined $2 billion package is “among the IFC’s largest ever commitments to specific initiatives in Africa,” the corporation said, adding that COVID-19 “plunged the region into recession, reduced foreign direct investment flows and pushed millions more Africans into poverty.”
“Long-term recovery will depend on getting funding to the pillars of the economy that need it today,” IFC Managing Director Makhtar Diop said in a statement.
The economic cost of COVID-19 to African countries has been devastating, with the International Monetary Fund warning in late 2020 that the continent faced a shortfall of $290 billion in expected revenue up to 2023, undermining development efforts.