5 July 2007
Plans to scale up investments in mining, large infrastructure, and private education raises concerns among civil society groups skeptical of the IFC's commitment to development.
By the time the World Bank Group's fiscal year came to a close over this past weekend, the International Finance Corporation (IFC) had committed over $1 billion for new projects in sub-Saharan Africa, by far its most significant investment in the region to date. "I would hope to see us put in $10 billion in the next 10 years, half of it going into infrastructure," IFC's Africa Director Thierry Tanoh told Reuters.
As noted by Reuters, this increase was punctuated by a spike in investments in the mining sector, which rose "to $300 million in 2007 against $50 million in 2006," a trend fueled by high commodity prices. In March, the IFC revealed that it intends to double the number of mining projects it supports in Africa, causing much trepidation among civil society groups who are skeptical of the projects’ purported benefits. More often than not, they argue, hard rock mining in Africa has wrought severe social and environmental damages, which IFC involvement has done little to mitigate.
The IFC's promise to ramp up investment in Africa's infrastructure raises additional concerns. While there is little debate that Africa suffers from a serious infrastructure deficit, experience shows that the large, capital-intensive projects that the IFC traditionally supports often fail to help those most in need. Earlier this year, the IFC approved a $130 million loan for the Bujagali hydroelectric dam on the Victoria Nile in Uganda, a decision vigorously opposed by local civil society groups. The dam’s critics contend that estimates of electricity output are overly optimistic, that the project is too costly, and that its environmental impacts will outweigh potential benefits.
The IFC has also taken steps to increase its support for private education institutions in Africa, modeled on previous successes it claims to have achieved. Earlier this month, the IFC approved a $50 million program to support private education on the continent. This latest approval has revived concerns that user fees charged by for-profit companies will keep basic services, such as education, beyond the means of the continent’s poorest and most at-risk populations.
See what extractive and energy projects the IFC and other IFIs are considering in Africa:
- Africa Extractive Industries and Energy Projects Spreadsheet, May 14, 2007 (BIC website) (MS Excel 304 KB)
- IFC at $1 bln mark in funding to Africa, plans more by James Macharia, Reuters, June 14, 2007 (Reuters website)
- IFC reaches billion dollar milestone in Africa, International Finance Corporation, June 14, 2007 (IFC website)
- World Bank program targets African private schools by Lesley Wroughton, Reuters, June 13, 2007 (Reuters website)
- IFC to to double number of mining investments in Africa, Bank Information Center, March 14, 2007 (BIC website)
- Tarnished Gold: Mining and the unmet promise of development, September 2006 (BIC website) (Acrobat pdf 376 KB)