Supporting stability and growth in fragile situations is a top priority for IFC. These economies need investments that will create jobs, spur economic growth, generate tax revenues, rebuild infrastructure, and create hope for their people. While every fragile situation has a unique and complex set of issues and the risks are high, there are ways for the private sector to help boost economic growth or support livelihoods.
Over the past three years (2016-2019 fiscal years), IFC has invested $7.6 billion in countries classified as fragile and conflict-affected and very low income. Of this amount, IFC invested $2.4 billion from its own account and mobilized $5.2 billion from other investors. IFC and the World Bank have also created initiatives specifically designed to support fragile situations.
In 2008, along with Ireland, the Netherlands, and Norway, IFC launched the Conflict-Affected States in Africa Initiative (CASA) to direct resources and expertise into countries recovering from conflict. CASA began modestly, supporting private sector projects in four countries and has since expanded to 13, covering all corners of sub-Saharan Africa. Projects have driven investment climate reforms, advised close to 3000 companies, government agencies, and other entities, and have supported over 115,000 farmers.
In 2017, the International Development Association (IDA) created the $2.5 billion Private Sector Window to help catalyze greater private investment into fragile and conflict-affected situations and IDA-only countries, especially those where other institutions and investors have traditionally struggled to find commercially viable transactions.
After more than doubling investments in fragile situations during the last decade, IFC has pledged that, by 2030, 40 percent of our annual commitments will be in IDA and FCS countries. We have also committed that 15 percent to 20 percent of these investments will be in IDA-eligible countries that are classified as very low income and FCS.
It’s important to recognize that fragile economies demand a comprehensive approach that goes beyond country, regional, or sectoral strategies. Top-down or one-size-fits-all models rarely succeed in fragile situations—and can even exacerbate existing problems. Long-term solutions must also involve multiple partners—like-minded investors who are willing to weather setbacks before clear progress is made.