ICD Acts as a Catalyst in Africa’s Development Agenda
20 June 2018
News & Press Release
The private sector arm of the Islamic Development Bank (IsDB) Group, the Islamic Corporation for the Development of the Private Sector (ICD) aims at developing its member countries’ private sector by offering solutions that create a healthy, vibrant and competitive private sector. The main idea is to create a thriving private sector that is well-positioned to support sustainable development and inclusive growth, and unless ICD focuses on engaging more systematically with this sector, it loses a critical stakeholder and partner in economic development.
ICD has never hesitated from exploring opportunities in regions where commercial banks and investors may fear to tread, especially in markets that are perceived as technically or structurally risky and there isn’t always a blueprint for businesses to follow. Africa is no exception-- a majority of ICD member countries hail from this region, totalling 25 out of 54 member countries, and to date ICD has made significant inroads in Africa’s development process.
Over the years, ICD has played a meaningful role in mobilising increased investment from the private sector and institutional investors through financing and advisory operations. In part, ICD draws partners to push beyond their traditional markets and establish their footprint in Africa, a region where perceived risk exceeds real risk. By taking the lead, ICD’s regional presence has provided comfort in challenging environments which have helped unlock new opportunities for private investment in Africa. This added bonus of investment catalyzation—the triggering of an investment response that otherwise would not occur—provides a positive impact with outcomes serving as a cornerstone of Africa’s development. ICD's catalytic role in attracting more funding is clearly demonstrated with several of ICD’s partners having secured additional lines of finance from other multilateral development institutions after ICD’s support were granted to several financial institutions in Africa and in Central Asia.
Based on successful experiences in Africa, ICD has determined and identified areas where interventions have been the most effective. Focusing on SMEs and levers of growth such as access to finance, entrepreneurship, trade and infrastructure have allowed ICD to contribute significantly to the region’s development by: a) creating productive jobs to combat unemployment, which is critical for Africa to achieve its human capital potential and reduce poverty, b) by allowing SMEs to improve their productivity and competitiveness and further grow, c) by strengthening domestic markets and exports, and d) by investing in life- and growth-sustaining infrastructure aimed at raising living standards, among other factors. These efforts are further supported by advisory work that provides technical assistance, support for policy reform, and capacity building programs that ensure a holistic approach on sustainable development.
On a broader scale, ICD aims to encourage development through access to fair finance, which is made feasible by Islamic finance and its promising role in Africa’s growth story. ICD has positively impacted Africa with several Islamic finance initiatives including the establishment of 19 Islamic banking windows in several African countries such as Mali, Senegal and Ivory Coast, in addition to the creation of five stand-alone Islamic banks, and a conversion of a conventional bank into an Islamic bank. These initiatives were supported by significant lines of finance in a very competitive market to boost Islamic banking practices and further aid SMEs. Indeed, ICD has made it a priority to broaden the availability and affordability of Islamic finance and to deepen capital markets in its member countries.
Furthermore, ICD is instrumental in advancing Islamic finance in Africa by playing the role as lead arranger in all of the sovereign sukuk issuances in the region (barring South Africa’s). This has allowed the Islamic finance industry to mature and expand outside of its core centers in the Middle East and Southeast Asia and has helped unlock financial resources necessary to meet the tremendous demand for critical infrastructure in Africa. ICD remains proud of its achievements in the African region and strives to continue bringing value addition through a dedicated efforts in building the continent’s resilience.