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Sub-Saharan Africa


Speeding Recovery in Fragile States




In the late 1990s, Rwanda was emerging from a civil war that had driven it to near total social and economic collapse.


Today, a new generation of entrepreneurs is helping the East African country cut the chains of fragility. Supported by the World Bank Group, Rwanda has become one of the world’s top economic reformers, setting an example for its African neighbors and attracting investment that is helping it build a solid foundation for future growth and stability.


Despite Rwanda’s remarkable turnaround, however, Sub Saharan Africa remains home to 19 of the 36 countries and territories the World Bank Group describes as ‘fragile or conflict affected’.  Rwanda itself still battles with widespread poverty, and a number of African countries, notably the Central African Republic, continue to struggle with repeated cycles of violence.


Ending Extreme Poverty


Fragile countries need special help and innovative solutions to achieve sustainable growth.


Poverty rates are on average 20 percent higher in countries suffering the effects of conflict, while the breakdown of social and financial institutions, combined with high unemployment and a lack of infrastructure and investment, leaves fragile countries vulnerable to sudden returns to violence.


While 50 percent of the world’s poorest people now live in the fragile and conflict affected situations, that number will leap to an estimated 80 percent by 2025 if current trends continue.


The World Bank Group has set the twin goals of ending extreme poverty within a generation and boosting shared prosperity in all countries. Reaching those goals means sharpening the focus on the world’s fragile and conflict affected situations, especially those in Africa.


CASA


IFC’s Conflict Affected States in Africa Initiative (CASA), active since 2009 and supported by donor partners Ireland, the Netherlands, and Norway, is helping coordinate IFC’s advisory services activities in nine conflict affected countries in Sub Saharan Africa.


With coordinators based on the ground in the countries where it is active, CASA provides flexible funding to help deploy IFC advisory services programs in a fast and efficient manner, supports the implementation of these programs, and develops and shares best practices.


IFC’s advisory support in places like Côte d’Ivoire, Liberia, Mali, and Sierra Leone focuses on promoting regulatory changes that encourage private sector growth, and on supporting increased access to finance, especially for smaller businesses. IFC also helps conflict affected countries rebuild their infrastructure, increase cross-border trade, and strengthen their financial institutions.


The results have been encouraging.  A recent World Bank Group report found that Sub Saharan Africa continues to record a large number of reforms aimed at easing the regulatory burden on local entrepreneurs, with 66 reforms adopted in the past year. Rwanda, Côte d’Ivoire, and Burundi were among the 10 economies in 2013 globally improving business regulation the most.


The report, ‘Doing Business 2014: Understanding Regulations for Small and Medium Size Enterprises’, found that of the 20 economies improving business regulation the most since 2009, nine are in Sub Saharan Africa and five of those (Burundi, Côte  d’Ivoire, Guinea, Liberia, and Sierra Leone) are supported by IFC’s CASA.  


And since 2004, 12 countries around the world, including Rwanda, Gambia, Guinea, Niger, and Nigeria in Sub Saharan Africa, have graduated from fragile state status by steadily building institutions and strengthening policies. Côte d’Ivoire, mired in conflict as recently as 2011, is powering ahead and could also soon shed its fragile status.  


“A strong private sector that is a reliable provider of goods, services, and employment opportunities is a powerful antidote against future conflict,” said Colin Shepherd, Head of IFC’s CASA Initiative. “IFC is committed to increasing its support for Africa’s fragile countries, supporting them with advisory services and investments so they can grow their private sectors.”


For its part, IFC’s CASA expects to expand from the nine countries it currently supports in Sub Saharan Africa to reach all 19 conflict affected countries in the region, and has recently increased its focus in Somalia and Zimbabwe. 


For more information contact Jason Hopps: jhopps@ifc.org

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