World Bank names first African to head private sector IFC unit

The International Finance Corporation, the private sector arm of the World Bank, has appointed Makhtar Diop, a Senegalese former finance minister, as its managing director — the first time someone from Africa has headed the Washington-based institution.

The appointment of Diop, currently the bank’s vice-president for infrastructure, follows that of Nigeria’s Ngozi Okonjo-Iweala as director-general of the World Trade Organization, completing a good month for African international diplomacy. The job of IFC chief has traditionally gone to a European.

David Malpass, president of the World Bank, described Diop as having “deep development and finance experience” in both the public and private sectors. “We need business climates and thriving businesses that attract investment, create jobs and foster the scaling up of low carbon electricity and transportation,” he said.

Malpass was keen to appoint an African, according to people who know his thinking. Diop, already at the bank, is thought to have beaten outside candidates, including at least one African woman, people familiar with the process said.

Although the IFC invests in private companies, in the past decade it has more explicitly championed development goals, such as supporting sustainable agriculture, health and education.

The bank said Diop would push its strategy of “creating markets and mobilising private capital at significant scale” to further these aims. He would lead the IFC’s efforts to increase investments in businesses promoting green development and gender equality as well as in fragile and conflict-affected countries including Afghanistan, Syria and Somalia, it said.

Donald Kaberuka, former president of the African Development Bank, welcomed the appointment, saying the IFC had become far more involved in Africa since the turn of the century. Since 1995, it has quintupled its exposure to the continent from about 5 per cent of total loans to nearly 25 per cent.

“The IFC has done quite well in Africa, but in the post-Covid world it will need to shift gear,” Kaberuka said, adding that it should play a lead role in catalysing a business recovery. “The IDA [International Development Association] soft arm of the World Bank has to be replenished every four years but the IFC brings in the leveraging power with private capital markets and with de-risking instruments,” he said.

The IFC often acts as an anchor investor in so-called blended finance investments, providing a degree of reassurance that helps projects and business attract private capital.

The bank said that under Diop the IFC would aim to get involved earlier in the project development cycle. It has sometimes attracted criticism for funding projects belonging to well-established businesses in sectors such as hotels, rather than supporting investments that would otherwise struggle to attract funding.

Aubrey Hruby, senior fellow at the Atlantic Council, said African nations had long constituted the largest voting block in many international institutions, but had rarely won leadership positions. “It is great to see this finally being reversed,” she added.

Diop was previously the World Bank’s vice-president for Africa and country director for Brazil, as well as for Kenya, Eritrea and Somalia.