The International Finance Corporation (IFC) Managing Director Makhtar Diop, currently on a three-day visit to Nigeria, has emphasized the organization’s alignment with government objectives. In a June 6 interview with CNBC Africa, Diop highlighted Nigeria’s status as the largest economy on the continent and outlined the IFC’s vision for the country.
Diop stated that the IFC’s focus in Nigeria includes prioritizing agriculture, manufacturing, energy, tech and other sectors while fostering regional integration and advancing infrastructure development. He also said the IFC will do more work in local currency financing to aid Nigeria’s private sector.
Additionally, the organization is committed to driving sustainability and climate change adaptation through initiatives like the EDGE certification for green buildings and investments in sustainable practices, underscoring their dedication to promoting environmentally friendly projects across Africa.
When I think about sustainability and climate change, I think a lot about adaptation for Africa. Adaptation is a lot about agricultural investments – smart agriculture and irrigation, which need to be scaled up”, he said during the CNBC Africa interview.
Diop stressed the importance of fostering dialogue between the public and private sectors as the IFC expands its footprint on the continent. The organization aims to bolster the African Continental Free Trade Agreement and enhance business prospects across borders by promoting cross-country collaboration and addressing common challenges.
Diop envisions a promising trajectory for the IFC’s engagement in Nigeria. The organisation plans to double or triple its investments in the country over the coming years. By attuning to the needs of local enterprises and refining their strategies, the IFC aims to play a pivotal role in propelling private sector growth and economic development in Nigeria.
The need for a global green taxonomy
In January 2024, Makhtar Diop authored an article in The Asset advocating for a global green taxonomy to fight climate change. Diop argued that the vast scale of the climate challenge necessitates coordinated action across society, government, and the economy. A consistent framework with common principles, definitions, and metrics is essential for enabling diverse actors to work towards a common global goal.
Diop’s article emphasized the need for standardized guidelines, especially for the financial sector. Investors require confidence and clarity to channel trillions of dollars into high-impact projects. This necessitates a shared set of criteria for assessing the “green credentials” of assets and activities. Without these, resource misallocation risks increase, reducing the potential impact of green investments.
According to Diop, countries can collaborate through international organizations to develop and harmonize green taxonomies, ensuring flexibility to accommodate local needs. A phased approach can help countries gradually align their taxonomies with global standards, providing time to adjust their economies and regulatory frameworks.
Support and resources, especially for developing countries, can facilitate the effective development and implementation of green taxonomies. Transparent reporting mechanisms can enhance investor confidence and ensure consistent global progress tracking.