World Bank’s IFC targets rise in African equity investments

The World Bank’s private investment arm plans to “significantly” increase its equity stakes in Africa over the next five years to drive businesses’ growth, its top official told Semafor, part of a strategic shift as the continent’s economies and firms grapple with often crippling levels of debt.

Makhtar Diop, a former Senegalese finance minister who became the International Finance Corporation’s first African managing director in 2021, said the strategy was part of the institution’s global commitment to grow its equity portfolio in order to “support transformative development.”

Africa received the largest share of the IFC’s investments in 2024 — a record $14.2 billion in commitments, up 23% from the previous year. The increase was part of a trend of rising investment across the continent over the past four years, a period in which supply chain disruptions caused by the COVID-19 pandemic and Russia’s war in Ukraine battered African economies, pushing up borrowing costs for governments and businesses.

“Equity is a very scarce resource and very much in need for companies in Africa to grow,” Diop said. “Often they are over-leveraged because they don’t have enough equity and they’re borrowing a lot, which affects their bottom line. So we are doing more and more equity and supporting companies to access capital markets.”

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