Washington DC, September 30, 2002
— The International Finance Corporation, the private sector development arm of the World Bank, today announced its partnership with the Swiss government in the new North Africa Enterprise Development Facility (NAEDF), an up to US$20 million effort to support small and medium enterprise (SME) growth in Morocco, Algeria, and Egypt.
IFC has already provided $5 million from its own resources for NAEDF, and on Sept. 27 Swiss Delegate for Trade Agreements Oscar Knapp and IFC Executive Vice President Peter Woicke signed documents concerning Switzerland’s SFr 4.9 million ($3.3 million) commitment to the facility. Additional donor support is expected to be finalized in the coming weeks.
Woicke also discussed NAEDF with government officials when visiting Morocco and Algeria earlier this month. It is expected that the new facility will launch operations from offices in Rabat, Algiers, and Cairo
.
As in many other regions of the developing world, SMEs represent the majority of private sector firms in North Africa, but have generally not realized their potential in generating economic growth and job creation due to a complex set of inter-related constraining factors. But as North African markets liberalize and foreign trade increases, new opportunities for regional SME growth abound. NAEDF will seek to pave the way for new opportunities and address constraints to SME growth by:
· Improving the capacity of financial institutions that serve the market
· Improving the enabling business environment by supporting key government initiatives that promote SME development
· Reinforcing selected local chambers of commerce and business associations to improve the quality of business services
· Building capacity and expertise of local consulting firms and private training institutions
· Creating linkages programs between large corporations and SMEs in sectors such as distribution.
Woicke, who has consistently promoted small and medium enterprise development as a key component of IFC’s global strategy, said: “This new enterprise development facility meets a critical need for SME development in Morocco, Algeria, and Egypt. A vibrant SME sector is critical to sustainable job creation, poverty reduction, and private sector development. The North Africa Enterprise Development Facility will help each country build the necessary infrastructure for SMEs to prosper and grow.”
Knapp confirmed the Swiss government’s commitment to supporting private sector development, and in particular SMEs, in countries with economies in development or transition. In this context, he expressed his satisfaction with the launching of this new facility and his hope that it will bear as much fruit as similar facilities already managed by the World Bank Group, most of which the Swiss government supports.
NAEDF will be managed by the World Bank Group Small and Medium Enterprise Department, a joint initiative of IFC and the World Bank that also oversees similar multidonor facilities in sub-Saharan Africa, Southeast Europe, the Mekong Region of Southeast Asia (Vietnam, Cambodia, and Laos), the Pacific islands, and China’s Sichuan province. Another new SME facility for South Asia based in Bangladesh is expected to be launched next month. Together these facilities now have approximately 300 field-based staff providing technical assistance to SMEs and the companies and institutions that support them. They represent approximately $31 million
in combined IFC and donor funding—an increasing portion of which is recovered each year through fees the facilities charge for their services.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through June 30, 2002, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s committed portfolio at the end of FY02 was $15.1 billion, with an additional $6.5 billion held for participants in loan syndications.
