IFC focuses on key industries that form the foundation of sustainable growth and that provide affordable goods and services to consumers, create jobs, contribute to government revenue, and stimulate the growth of local small and medium enterprises.
Enhancing Economic Growth through Tourism
Tourism makes a sizable contribution to employment, foreign exchange earnings, and tax revenues in countries across Africa. According to the World and Tourism Council, the sector contributes $169 billion annually to Africa’s overall economy, representing 7.1 percent of the continent’s GDP.
Despite Africa’s comparative advantage in natural assets like beaches and wildlife, and its diverse cultural heritage, however, its tourism sector has hardly reached its full potential.
Hurdles to growth stem from under-investment in enabling factors like access, connectivity, infrastructure, data, skills, and product diversification. More recently, COVID-19 has hobbled much of the region’s tourism activity, threatening the survival of many businesses, from lodges and guides to restaurants and resorts.
To support increased and improved tourism across sub-Saharan Africa, IFC helps develop sustainable and inclusive tourism infrastructure and markets.
For example, IFC invests in hotels because of their strong development impact and ability to generate jobs, particularly for low-income countries and in fragile and conflict-affected places. Hotels also provide opportunities for local small- and medium-sized businesses in the value-chain.
Further upstream, IFC also works with governments to strengthen the overall tourism ecosystem to support more competitive, resilient destinations that attract holidaymakers, adventure seekers, and business travelers alike.
Developing Regional Retail Supply Chains
IFC supports investments in the retail sector in developing countries because of its economic importance in terms of employment, consumer spending, and tax revenues.
The global retail industry employs more than 150 million people and accounts for about 9 percent of global GDP—and another 20 percent indirectly. Modern retail can bring many possible benefits to emerging markets, including increased productivity, economic growth, capital investment, job creation, and exports.
IFC retail projects vary in type, size, and place, but they share one core component: they help cultivate local supply chains. The local economy benefits with the development of new and related industries such as agribusiness, food processing, light manufacturing, warehousing, and distribution.
IFC’s retail clients create jobs, contribute to the tax base, build local banking capacity, improve infrastructure, and raise labor standards.
Building Affordable Property
Rapid urbanization has created booming demand for affordable, quality housing and commercial property in Africa, but also a large deficit in the supply, threatening the economic development of major cities across the region.
More than half of Africa’s urban population, including those in fragile settings, lives in areas affected by overcrowding, low-quality housing, or inadequate access to clean water and sanitation.
IFC is working to create viable housing markets across Africa through upstream policy reform support to governments, and the private sector, including by developing Mortgage Refinance Companies, investment and advisory services to deepen the housing sector, mobilization of long-term capital, strengthening of construction value chains, and facilitating green building practices through IFC’s EDGE tool.
In addition to housing, IFC invests in commercial property to create the infrastructure businesses need to grow.
IFC is also helping to build new asset property classes. For example, real estate investors with expertise in healthcare can play an important role in opening the health sector to new entrants.
The cost of a hospital building and property management, accounting for about 70 percent of the average hospital expense sheet, stops many potential players from entering the market. Health care real estate investment trusts (REITs) offer new models that can lower the costs for healthcare providers. IFC recently financed one such healthcare REIT in South Africa.