The International Finance Corporation (IFC) has been expanding its investments across Africa, and Rwanda is increasingly part of that story. The institution has committed a total of $330 million in the last five years.

Ethiopis Tafara, IFC’s Regional Vice President for Africa was in Rwanda last week to explore new development opportunities and strengthen the institution’s investment portfolio in the country.

Tafara spoke exclusively to The New Times’ Business Editor Julius Bizimungu about how IFC is supporting Rwanda’s development priorities and what the country should do to attract more private sector investments.

Below are excerpts:

What are some of your key takeaways from the interactions you&039;ve had during your meeting with different officials?

The principal reason for my trip here is the discussion of the country partnership framework (CPF) with the Rwandan government. What we do at the World Bank Group is, we every so often, sit down with governments to put in place a plan for how we will work with the government in support of its priorities.

The old CPF has run its course, we're now discussing the new country partnership framework and it's a slightly different model we're applying these days in that it used to be the three or four institutions that comprise the World Bank Group would engage the government separately.

We've decided we want to engage the government together, so that we can understand what the government wants to finance in terms of its priorities with public money, which of its priorities it wants to finance with private money and that gives us a sense for how we can serve the interests of the government, how we can work together, and how we can mutually support one another with the objective of helping the government with its priorities.

The government wants to achieve the vision 2050, which is an ambitious blueprint to advance its economy. How is this aligned with your work?

It turns out that the priorities of the government and our strategy for the next five years are perfectly aligned. We, as an organisation [the World Bank Group], have decided that we need to make job creation our north star.

The reason for that is demographics. If you look at the demographics here in Africa, 70% of the population is under the age of 30, 50% of the population is under the age of 15. This is a demographic dividend if they're all employed, but it will be a huge challenge if we're not creating jobs for all this youth that's coming to the market.

Having made job creation our north star, we then are focussing on what are the enablers of job creation and what are the sectors that create the most jobs.

The enablers are energy. Without energy, there's no development that's possible. We continue to look to finance energy projects and we have a World Bank Group initiative called M300 where we're looking to electrify 300 million Africans out of the 600 million that don't have energy and don't have power, by 2030.

But the other big enabler is transportation and logistics, because if you're creating jobs you also need to then connect people and businesses to markets and markets to markets, and that is physical infrastructure, roads, trains, ports, but it's also digital infrastructure. In today's world, the market connection happens in the virtual world as much as it happens in the physical world.

We're looking for opportunities to finance these sorts of projects, and then you've got the job creators themselves, agriculture being one of the biggest job creators and very important to the Rwandan economy and the African economies.

Tourism is another key sector. It turns out, every dollar invested in tourism creates more jobs than in any other sector, and Rwanda has a good head start and a comparative advantage by virtue of all the work they've done in the tourism space.

SMEs and SME finance is another. 80-90 per cent of jobs in any economy are created by small and medium-sized enterprises, yet they struggle to get financing. We're now thinking about how we can increase financing to SMEs.

Value-added and local manufacturing is another area, and it just so happens these areas that are priorities for us are priorities for the government as well.

You are working with the government to support climate-smart agriculture. Last year you identified about $335 million worth of investment opportunities. What have you done so far to realise these investment opportunities?

Business development is a difficult business. We have to find clients that want our financing. Sometimes they're readily available in the marketplace. Sometimes we've got to identify clients that we know of somewhere else and say, we think there's an interesting opportunity for you in Rwanda, and bring them to this marketplace and support them as they think about whether this is a place where their business will do well.

You go through periods where you see a lot coming in and a lot that you're financing, and then you have down periods. What we do is consistently think about what are the development gaps in a country? How much of that development gap can we target, and what clients can we bring to help close that gap?

We think about it in sectoral terms. I've talked to you about agriculture. I've talked to you about tourism. We're thinking about it in terms of manufacturing? What are the manufacturing opportunities in this country? Do we know of people who would be interested in value-added manufacturing in Rwanda? What's going to be required of the government to make that possible?

We've been talking about, for example, industrial zones. We have clients who are interested potentially in running industrial zones or being present in industrial zones. But those don't work unless you've got power and water coming to the zone.

Again, that's the kind of conversation we're having with the government. What we're doing is consistently and continuously looking for businesses in the sectors that create jobs, incentivising them to come by telling them, we'll accompany you, we'll de-risk, we'll finance you, and then working with the government to make it possible for those businesses to succeed.

On that front, you wanted to build a pipeline of investment over the next couple of months. What is the sentiment out there when you talk to investors?

Well, first of all, I wish it just took a couple of months. Building a pipeline usually is about a year or two-year process. The investments we make today are usually the result and the fruit of work that's happened over at least a year worth of work.

The sentiment out there with respect to Rwanda is quite positive. What do businesses look for? They look for regulatory certainty, stability, and consistency in terms of government actions. The success of the tourism industry in Rwanda has a lot to do with those kinds of qualities that the government has demonstrated there.

There is certainty around regulation, there's certainty around legal frameworks, and there is stability in the country. I think for many, Rwanda is an interesting destination.

I think the challenge that Rwanda faces is generally scale. A lot of the investors we work with are looking for major investments to be made. And it's a small country. Yet, nevertheless, there are those who see there's appeal, even in a small country, to try and tackle whether it is in the manufacturing, tourism, or agricultural sectors.

We don't see a shortage of interest. It's just a question of building that pipeline over time and making sure that they understand what we are interested in, which is to tackle these areas that are going to result in the most job creation.

In 2021, the IFC signed a partnership with the government to support the efforts towards building capacity for vaccine manufacturing. What’s the progress?

When I came on board almost a year ago, one of the first things that the team and I did was to sit down and think about the pharmaceutical sector in Africa. I was very surprised to find that it turns out, depending on whether or not you're talking about medical supplies, medication or vaccines, 85 to 99% of what's consumed on the continent is imported.

From the standpoint of medical sovereignty, that's a bit of a challenge. I think many remembered what happened during the COVID years where regrettably many African countries found themselves at the very back of the line, despite the fact that there were great needs here in terms of vaccines and the like.

What we decided was we should undertake an effort to double production on the continents by 2030 and to help the African Union with its target of getting to 60% of what's consumed on the continent being produced on the continent by 2040.

Now, doubling production is not a matter of doubling production in every country. There are certain countries that have a comparative advantage because they already have pharmaceutical industries that can quite easily increase the capacity of their production. Rwanda will find itself in that category.

We are now sitting down thinking about where the opportunities are for us to invest and finance to increase this production. South Africa, Rwanda, Kenya, Egypt, Morocco, and Nigeria, are the countries that immediately come to mind. We are working with our colleagues at the [World] Bank to make sure that the environment will allow for the doubling of production.

We're hoping that by 2030, we'll be far along in this exercise of doubling production. Part of that will be financing pharmaceutical companies around the continent, including here in Rwanda.

The Africa CEO Forum, which you co-organises, will return to Kigali in May. How have commitments signed in Kigali in 2024 and last year materialised?

We are doing far more financing than we ever have. We committed $15 billion last year, which was a record year for Africa. We are shooting to commit about $20 billion this year. And that's not possible unless you're following up on the commitments you're making.

What I'm seeing is that we are increasing in demand, doing more and more, and seemingly satisfying the commitments we're making vis-a-vis clients, both old and new, in terms of supporting what they're trying to do with both debt financing as well as equity financing.

That's the other thing that is shifting at IFC is that we're looking to do more in terms of equity financing. We have a history of doing this for 50 or 60 years.

For the past 10 years or so, we've done less equity financing, but we want to come back to doing more. The reason for that is, it's probably the most important form of financing you can actually deliver in any economy because it is the riskiest, but it's probably what's needed most.

If I think about Africa, with debt, you run companies, but with equity, you build companies. What we need to do is build companies that serve to close development gaps, that are focused on development issues that we think are important for us to tackle, and being willing to take a stake, a risk for that company to help it grow, turn it from a local champion into a national champion, into a continental champion, and why not a global champion?

What do you hope to achieve from this year's Africa CEO Forum?

Each year keeps getting bigger and bigger, and the conversations are really very important. It has become the premier gathering of CEOs in Africa to talk about issues of the day.

Hopefully, we'll be able to talk about what we believe are the most important areas of investment for the continent.

We're hoping that we'll just deepen the conversations we've had around what the continent needs in terms of financing, the role that the private sector needs to play in development, the kind of support that institutions like ours can bring to bear, but also tackle some of the new issues that are emerging.