Opening Remarks by IFC CEO Philippe Le Houérou
at the IFC Panel on Jobs and Economic Transformation
Washington, DC | October 18, 2019
Ladies and gentlemen: Good morning and welcome to our panel on Jobs and Economic Transformation. This is a huge and complex topic, so I’d like to focus my short remarks on sub-Saharan Africa.
Although the region has vast potential, sub-Saharan Africa faces many development hurdles. Public debt levels are rising. Fragility is costing the continent half a percentage point of growth per year. And the availability of good jobs has not kept pace with new entrants to the labor force. In fact, to meet its growing population, Africa needs to create 1.7 million new jobs every month.
To deliver, business as usual is not going to be good enough. Africa’s path needs economic transformation. The question is how?
At the Africa CEO Forum in Kigali last March, President Kagame summed up in one word what we must change. And that is “mindset.” For example, all of us—African governments, development partners, and the private sector—must change the way we think about the public and private sectors in economic growth and job creation.
We need a new approach between the public and private sectors to unlock the region’s potential. We need governments to step up efforts to ensure sound macroeconomic management, debt transparency and sustainability, as well as legal and regulatory frameworks that provide an attractive and level playing field for companies.
And we need private sector pioneers who see more the great opportunity, than the possible risks, to doing business in Africa. Together, the public and private sectors can ignite the region’s economy.
At the regional level, the African Continental Free Trade Area, which will make the region the largest free trade area in the world, is a big breakthrough. It will encourage more trade and investment, with the promise of regional value chains. And it can serve as an anchor for reform.
Also encouraging is the African Union’s Digital Transformation initiative, which offers an unprecedented opportunity for the continent to leapfrog the traditional development path. The initiative has the potential to drive innovation, economic growth, and job creation in many key sectors of the economy. It will also enable greater interconnection between African markets and with the rest of the world.
At the World Bank Group, we are embracing this change of mindset. We are increasing our support to African governments to diversify their economies and implement pro-business reforms.
We have developed a new approach called the “Cascade,” by which we pursue private sector solutions where sustainable so that scarce public resources can be used where they are needed most. In fact, the World Bank Group is a “de-risking machine.” We de-risk countries through the World Bank’s policy-based loans and public sector projects. And we de-risk private sector investments and projects directly through IFC and MIGA financing.
At IFC, we are also changing the way we work to shift from reactive to proactive. This means not waiting for private sector companies to present us with projects to finance, but to work upstream to create new markets and investment opportunities. We have introduced new approaches and tools to support our work. This includes the IDA Private Sector Window, which helps offset risks to private sector investment in the world’s most challenging markets.
And since I am talking about IDA, we are scheduled to conclude the 19th replenishment of IDA in December. We are aiming for an ambitious amount, building on a successful meeting hosted by the Ethiopian government in Addis Ababa in June. I would like to call on you for your support in achieving this goal.
For our discussion today, let me turn to our distinguished panel of ministers, CEOs, and representatives from countries and companies who will share with us their first-hand experiences in driving economic transformation and creating jobs.