April 16, 2012—It has been a difficult year for businesses in the Maghreb countries of North Africa, including Tunisia and Morocco. Unrest and fallout from the European debt crisis have put a damper on growth and worsened long-standing economic problems like youth unemployment.
To help address those challenges, IFC is stepping up both its investments and advisory service work with the aim of boosting investor confidence and creating job opportunities. In Tunisia, for example, IFC plans to double its portfolio to $500 million within the next 18 months.
“Countries like Morocco and Tunisia, fundamentally, are very strong,” said Dimitris Tsistsiragos, IFC Vice President for Europe, Central Asia, the Middle East and North Africa. “They have close ties to Europe, educated labor forces, and a history of strong growth. By stepping up our work, we hope to demonstrate to other investors that there is great potential there.”
In the last six months, IFC has closed several important deals with companies in those two countries. IFC invested:
$10 million in Amen bank under IFC’s Global Trade Finance Program
$8 million in healthcare provider Amen Sante to help broaden access to quality private health care for lower-income groups in Tunisia
$10 million in Candax Energy, an oil and gas company with Tunisian holdings
$118 million in Morocco’s Saham Finances, a regional insurance provider, in conjunction with the IFC African, Latin American, and Caribbean Fund to help the company expand into Sub-Saharan Africa
$9 million in a partial credit guarantee for Morocco’s third-largest microfinance institution, FONDEP, to facilitate access to finance for local micro, small and medium enterprises
IFC has also committed $22 million to the Maghreb Private Equity Fund III, which is focused on providing guidance and financial support to small and medium enterprises across North Africa. The facility is looking to raise a total of $200 million from international and regional investors.
Small and medium business have immense potential to create jobs, but often have trouble accessing risk capital and professional expertise. This fund will help these companies realize their potential.
That work comes in conjunction with a host of regional initiatives expected to make an impact in Tunisia and Morocco. Those include the e4e Initiative for Arab Youth, which aims to promote private education and equip students with the real-world skills they need to land jobs.
IFC has also focused on expanding access to finance for small businesses, improving corporate governance in the private sector and streamlining business regulations – especially in the tourism sector.
“By combining our investment and advisory service work we can really make a difference in countries like Tunisia and Morocco,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “Their people, especially the young, are hungry for economic opportunity and IFC can help play a significant role.”