World Bank Agency Opens Regional Office in South Africa

World Bank Agency Opens Regional Office in South Africa

JOHANNESBURG, SOUTH AFRICA, March 19, 2002 — The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, today announced the opening of a Johannesburg office. The new office is part of a broader agency effort to encourage foreign direct investment, a catalyst for economic growth, into Africa.

MIGA's Executive Vice President, Motomichi Ikawa, says that in order for MIGA to accomplish its goals, it needs to be close to its clients and partners. "This new location will enable us to forge closer partnerships and to make progress in our fight against poverty in Africa."

MIGA provides guarantee coverage against noncommercial risks such as transfer restriction, breach of contract, expropriation, and war and civil disturbance, offering protection to private investors who are attracted by business opportunities in Africa but concerned about political risks. The agency's guarantees program provides investors with the confidence they need to go into markets where they might not otherwise feel comfortable.

Since its inception in 1988, MIGA has underwritten some 70 guarantees for projects in Africa, facilitating about $4 billion in foreign direct investment. Africa stands at 12 percent of MIGA's gross guarantees portfolio. Examples of recent MIGA support in the region include a $1 million guarantee to a Swedish construction company operating in Angola and a $56.3 million guarantee to a Canadian company for its investment in an underground gold, silver and copper mine in Tanzania.

As a member of the World Bank Group, MIGA applies unparalleled knowledge of emerging economies to the projects it guarantees and acts as an umbrella of deterrence against government actions that could disrupt investments. "The opening of the Johannesburg office will help MIGA better explain its value added to potential clients and promote Africa's attractiveness as an investment destination," Ikawa says.

Chief Representative for the new office, Ken Kwaku, adds that MIGA is ready to play its part to advance the goals of the New Partnership for Africa's Development (NEPAD). "If we are to improve Africa's perceived adverse environment, we need to reduce the cost of doing business on the continent. Multi-country infrastructure investment projects can play an important role in this regard," he says.

MIGA has a long record of supporting private investment in infrastructure — helping governments provide better, less expensive infrastructure services to more of their citizens, including those who are often neglected because of the high cost of reaching them. Since 1988, MIGA has issued 119 guarantees for infrastructure projects, with coverage exceeding $2 billion.

"We look forward to cooperating with NEPAD to achieve Africa's development goals. We have to bridge the infrastructure gap that separates rich countries from the poor and we have to mobilize private capital for development projects. MIGA can help do that," Kwaku says.

MIGA also offers technical assistance services that equip investment promotion intermediaries with techniques to strengthen their capacity to attract foreign direct investment. An example of such assistance was the recent design and installation of new technology to enhance the FDI promotion functions of the Tanzania, Ghana, Mozambique, Zambia and Senegal's promotion agencies, among others. Another new service— FDI Xchange —offers free email alerts to investors, with the latest information on investment opportunities and business analysis from Africa and elsewhere.

Kwaku says South Africa will be an ideal platform from which to launch MIGA projects into the rest of Africa. The new office will be officially launched on Monday, March 25, 2002 at a morning seminar on "The challenges of infrastructure investment within Spatial Development Initiatives in Southern Africa."

For information:
In South Africa:
Ken Kwaku, Kwaku@worldbank.org, t. 011.341.9000
Martin van Niekerk, Junxion Communications, t. 012.342.0456
In Washington:
Angela Gentile, agentile@worldbank.org, t. 202.473.3509