Estimates show that by 2030, half the world’s extreme poor will live in countries characterized by fragility, conflict, and violence. Preventing and mitigating these challenges is key to making progress toward the Sustainable Development Goals and to the international community’s broader efforts to promote peace and prosperity.
Supporting stability and growth in fragile and conflict-affected situations (FCS) is a top priority for IFC. These economies need investments that will create jobs, spur economic growth, generate tax revenues, rebuild infrastructure, and create hope for their people. While every fragile situation has a unique and complex set of issues and the risks are high, there are ways for the private sector to help boost economic growth or support livelihoods.
After more than doubling investments in FCS during the last decade, IFC has pledged that, by 2030, 40 percent of our annual commitments will be in IDA-eligible and FCS countries. We have also committed that 15 percent to 20 percent of these investments will be in IDA countries that are classified as very low income and FCS.
Over the past three years (2019-2021 fiscal years), IFC has invested $7.2 billion in countries classified as fragile and conflict-affected and very low income. Of this amount, IFC invested $2.8 billion from its own account and mobilized $4.4 billion from other investors. IFC and the World Bank have also created initiatives specifically designed to support fragile situations.
In 2021, along with Ireland and Norway, IFC launched the Africa Fragility Initiative, a five-year program dedicated to supporting responsible private sector-led growth and job creation across 32 African countries affected by fragility and conflict. The initiative builds on 13 years of expertise, knowledge, and relationships developed through the IFC-led Conflict Affected States in Africa (CASA) Initiative which ended in December 2021 after delivering investments and advisory support in 13 fragile and conflict-affected countries.
In 2017, the International Development Association (IDA) created the $2.5 billion Private Sector Window to help catalyze greater private investment into fragile and conflict-affected situations and IDA-only countries, especially those where other institutions and investors have traditionally struggled to find commercially viable transactions.
It’s important to recognize that fragile economies demand a comprehensive approach that goes beyond country, regional, or sectoral strategies. Top-down or one-size-fits-all models rarely succeed in fragile situations—and can even exacerbate existing problems. Long-term solutions must also involve multiple partners—like-minded investors who are willing to weather setbacks before clear progress is made.