Sunday, November 2, 2008

IFC sets aside $3bn to recapitalise African banks

The World Bank's International Financial Corporation has set aside $3-billion to help insulate banks in poor African countries from the effects of the global credit crisis, its Vice President for Africa said on Wednesday.

The global financial meltdown has forced many western governments to inject billions of dollars to support affected financial institutions but many African countries are too poor to offer similar help to their own.

"Banks in the developed world are enjoying bail outs from the governments because these governments have the money but what is going to happen to banks where governments have meagre financial resources?" said Thierry Tanoh, IFC's Vice President for Africa.

Tanoh was speaking on the sidelines of a business summit convened by the East Africa Business Council and the Commonwealth Business Forum to discuss regional solutions to business challenges including the credit crisis.

The IFC - the private sector lending arm of the World Bank - said it would focus on banks in Rwanda, Uganda, Kenya, Ethiopia and Sierra Leone, Tanoh said.

He said the corporation would also invest $2-billion in African energy projects.

"IFC will be spending over $2-billion on power projects in Africa and our first project will be in Rwanda next year."

The tiny east African country hopes to double its power output by building a hydrodam on Akagera River.

Rwandan President Paul Kagame told the business leaders gathered in Kigali that regional integration was key to achieving sustainable development in Africa.

"We are witnessing in Rwanda significant investments from South Africa, Nigeria, Libya and Kenya in areas such as banking ICT, tourism," he said.