Economic reforms and improved competitiveness have brought forth new, dynamic growth markets in many parts of Africa. African countries increasingly offer attractive prospects for companies and investors: a young population, growing availability of workers and skilled labour, rising purchasing power, new markets and integration in global value chains.

With annual growth rates of seven per cent and higher, countries like Ethiopia, Ghana, Senegal and Côte d’Ivoire were are among the world’s fastest growing economies before the severe economic disruptions caused by the Corona pandemic. Many African countries have good prospects to resume their previous trajectories once the effects of the pandemic have been overcome. However it is not yet certain by when growth and employment will be restored to pre-Corona levels. At the same time, however, Africa needs about 20 million jobs per year in order to provide its young population with prospects for the future. With its Special Initiative "Decent Work for a Just Transition", the Federal Ministry for Economic Cooperation and Development (BMZ) has set itself the goal of supporting German, European and African businesses and investors engaging in Africa. The initiative aims to create good jobs and training places and to improve working conditions - as a contribution towards implementing the Marshall Plan with Africa and the G20 Compacts with Africa.

Within the scope of this Special Initiative, the Facility Investing for Employment of KfW Development Bank will provide funding for companies, non-profit organisations and public partners to overcome obstacles to investments. IFE contributes co-financing grants for employment-enhancing investments, accompanying advisory services and the set-up of investments, such as environmental and social impact assessments. This will remove barriers to creating additional and better jobs in the private sector. Funding is made available by means of competitive Call for Proposals on the basis of transparent funding criteria.

The Facility will use a lean and transparent competitive application method to identify and select the projects which show the highest potential to address barriers to investment and job creation. This includes, for example, the upgrade of electricity supply, the provision of access roads, the construction and equipment of training centers, or the improvement of the local supply industry. These activities are now being complemented by IFE’s Corona Response Programme.

Given the profound impact of the Covid 19 pandemic on the economy and employment in partner countries, the Facility Investing for Employment (IFE) launched the "Corona Response Programme" in 2020. The Corona Response Programme (CRP) component is dedicated to counteracting pandemic-related job losses in Africa. To allow for a rapid and effective implementation, CRP funds are disbursed to eligible small and medium-sized enterprises (SMEs) through selected financial partner institutions (PFIs) in the partner countries. These PFIs were pre-selected by KfW Development Bank and come from Ethiopia, Ghana, Rwanda, Senegal, Ivory Coast, Tunisia and Morocco. Due to their market proximity, they understand best local conditions, challenges and effects of the pandemic and can therefore systematically identify the SMEs that are eligible for financial support. 

Through the grants allocated within the CRP, the beneficiary SMEs can cover their interest liabilities or operating and personnel costs, which are essential for preserving threatened jobs. The CRP targets SMEs that are presently in a precarious situation but demonstrated financial vitality and growth potential prior to the onset of the pandemic. In addition to complying with financial eligibility criteria, qualifying SMEs are verifiably privately owned, have between 25 and 250 employees, and are free of shareholders considered politically exposed persons. 

The first proposals from PFIs for eligible SMEs were received shortly after the announcement of the CRP and were promptly processed by IFE. First disbursements were made in October 2020 and have been continuously pursued. The CRP has a total budget volume of 65 million euros. Of this amount, around EUR 59 million were disbursed to PFIs by October 2022, of which around EUR 54 million were allocated to eligible SMEs. In total, the CRP has contributed to mitigate the immediate impact of the Covid-19 pandemic in partner countries by supporting 1.919 eligible SMEs with a total of 106.189 employees. As scheduled, two years after commencement, the programme finished its active disbursements in October 2022.

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