CHOGM: Makhtar Diop on IFC's role in a post-pandemic recovery

Amidst the challenges posed by the COVID-19 pandemic, the International Finance Corporation (IFC) is gearing up to play a pivotal role in the economic recovery, particularly in the developing world. CNBC Africa recently sat down with Makhtar Diop, the Managing Director of IFC, to discuss the organization's strategies for facilitating sustainable investments in Africa. Diop highlighted the urgent need to attract more investments in renewable energy and climate-friendly initiatives. One of the key mechanisms employed by IFC is de-risking investments to alleviate concerns regarding investment safety. Through initiatives like the private sector window, which offers guarantees and currency protections, IFC aims to create a conducive environment for private sector involvement in sustainable projects. Diop emphasized the success of these efforts, recounting the substantial cost reductions in renewable energy witnessed in recent years. The decreasing costs underscore the growing attractiveness of sustainable investments in Africa. Moreover, Diop urged a shift towards a proactive approach in leveraging Africa's potential manufacturing capabilities in essential product sectors like solar panels, batteries, and green hydrogen. By positioning Africa as a key player in the global supply chain for climate-related goods, the continent can not only contribute to the fight against climate change but also drive structural transformation and economic growth. As the world grapples with the aftermath of the pandemic, Diop stressed the importance of reimagining Africa's role in the post-crisis landscape. He advocated for a strategic focus on enhancing Africa's manufacturing capacity and promoting sustainable development through long-term investments. Central to IFC's mission is fostering equitable access to finance for African entities while mitigating the risks associated with excessive borrowing. Diop underscored the significance of multilateral financing and prudent investment strategies to ensure sustainable economic growth without falling into a debt trap. Looking ahead, IFC aims to intensify its efforts in mobilizing capital and engaging institutional investors to channel funds into productive assets in Africa. By aligning with the vision of IFC 3.0 and prioritizing market creation and investment diversification, IFC is poised to catalyze transformative changes across diverse sectors in Africa. Diop's forward-looking approach reflects a commitment to building resilient ecosystems for small and medium enterprises (SMEs) and indigenous investors in Africa. Through targeted initiatives like the billion-dollar SME initiative and strategic partnerships with local banks, IFC is dedicated to fostering entrepreneurship and supporting job creation, particularly among women and youth. As Africa navigates the complexities of a post-pandemic world, IFC's proactive stance paves the way for sustainable growth and inclusive development on the continent.