In Africa, the private sector is widely seen as the main engine of industrialization and plays a central role in the long-term development strategies of governments. However, it remains dominated by small and medium-sized enterprises (SMEs), which are key players in still underdeveloped value chains. In West Africa, the BCEAO estimates that SMEs account for between 80% and 95% of the business fabric, depending on the country. Yet their limited access to financing holds back their contribution to GDP and job creation.

Olivier Buyoya, Regional Director for West Africa at the International Finance Corporation (IFC), the World Bank Group’s private sector arm, spoke to Ecofin Agency in an exclusive interview. He discusses the challenges and opportunities of financing industrialization in West Africa, a region still facing both internal and external constraints.

Ecofin Agency: Mr. Buyoya, industrialization is now seen as a key tool for economic transformation in Africa. The Choiseul Africa Summit has focused heavily on it. In your view, what are the main roadblocks to this transformation, especially in West Africa?

Olivier Buyoya: Thank you for having me. If I may, I would like to first highlight the strengths West Africa has when it comes to industrialization. It is important to look at both the opportunities and the challenges.

The region has many advantages, including vast natural resources, a large geographic area, a fast-growing population, and a large, relatively low-cost labor force. Despite political and economic instability, demand for industrial goods and services is rising quickly, especially in agribusiness and new technology sectors.

But several obstacles have slowed industrial transformation. The first is the lack of real economic integration. While frameworks like ECOWAS and WAEMU exist, the free movement of goods and people is still hindered by weak infrastructure.

The first obstacle to industrial transformation in the region is the lack of real economic integration.

Energy access is a prime example. Energy it is often scarce, expensive, and unreliable yet it is essential for any industrial activity. Transportation infrastructure also lags behind global standards. Ports are expanding, from Nouadhibou to Pointe-Noire, but they remain uncompetitive. Rail networks are outdated, leaving many production areas isolated and poorly connected to ports.

Another major challenge is workforce training. Low-cost labor alone is not enough. Workers must be skilled to meet the specific needs of industry. Finally, like other economic sectors, access to financing remains limited, and the overall business climate needs improvement. Despite some progress, red tape, permit approvals, and weak public-private collaboration continue to discourage industrial investment.

Low-cost labor alone is not enough. Workers must be skilled to meet the specific needs of industry.

Moutiou Adjibi Nourou, Editor-in-Chief for Public Policy at Ecofin Agency, and Olivier Buyoya, Regional Director for West Africa at IFC.

Ecofin Agency: In spite of these challenges, the IFC has been very active in the region. Which industrial sectors offer the most promise, and how is IFC supporting them?

Olivier Buyoya: That is correct. One of West Africa’s biggest advantages is that it has the resources needed to build a strong industrial base across several sectors.

Take mining. Mauritania holds massive iron reserves, which are currently exported in raw form. There is now political will to process this iron locally. Similar potential exists for Guinea’s bauxite and Senegal’s phosphate.

In textiles, the region produces between 2 and 3 million tons of cotton each year. Yet much of it is shipped to Asia for processing and then reimported as finished clothing. It is time to invest in local textile production to capture more added value.

The region produces between 2 and 3 million tons of cotton each year. Yet much of it is shipped to Asia for processing and then reimported as finished clothing.

Agro-industry also holds enormous potential. Whether for export crops like cocoa and cashews or staple foods like maize and cassava, the market is real and growing fast due to urbanization.

Each country has its strengths: Guinea and Sierra Leone for bauxite, Senegal for phosphate, Côte d’Ivoire for natural gas, and so on. It is possible to build well-structured industrial sectors that serve both local and export markets.

At the IFC, our mission is to support private sector development and help create the millions of jobs our countries need. Industry is a key priority for us, and we act on three levels.

First, we work with World Bank Group colleagues to support governments in improving the macroeconomic framework, ensuring stability, and putting in place proactive industrial policies including special economic zones, industrial parks, and tax incentives.

Second, we help countries attract private investment. Industrial growth will rely heavily on both foreign and domestic investors. Companies like Dangote or SIFCA are already investing across borders to build value chains. These are the industrial "champions" we support.

We provide tailored financing equity or long-term debt and sometimes co-invest alongside project sponsors. But our role goes beyond financing. We also get involved upstream, helping structure projects with technical assistance, feasibility studies, and risk management including environmental and social aspects.

This full-package approach is what we offer industrial investors. However, it is up to governments to lay the foundation: infrastructure, regulation, and stability. IFC steps in to help turn those favorable conditions into real, bankable projects.

It is up to governments to lay the foundation: infrastructure, regulation, and stability.

Ecofin Agency: Let us now take a closer look at three key barriers you mentioned earlier: energy, infrastructure, and financing. These are systemic challenges for local industrial players. How is the IFC helping to address them?

Olivier Buyoya: These are indeed major issues. Let me go through them one by one.

Energy is probably the biggest historical barrier to industrial development. But it is also one area where Africa is making rapid progress. In Côte d’Ivoire, for example, a large share of energy production has been handed over to the private sector. The World Bank Group, through the IFC, has supported this model for over 15 years.

Today, more than half of the electricity in Côte d’Ivoire is produced by private operators, many of them funded by IFC. We have supported this shift by mobilizing financing and helping build strong public-private partnerships. Senegal is now following a similar path.

Today, more than half of Côte d’Ivoire’s electricity is produced by private operators, many of them funded by IFC.

Of course, challenges remain. Production still falls short of demand, and energy prices are high. But by developing large-scale projects and encouraging competition through bidding processes, countries can gradually bring down costs and make energy more affordable for industry.

On transport infrastructure, competitiveness depends on efficient logistics. A locally processed product must be cost-competitive with imports from Asia or South America. Today, it can cost two to three times more to ship a container from Abidjan to Marseille than from Pakistan or China.

It can cost two to three times more to ship a container from Abidjan to Marseille than from Pakistan or China.

That is why we support port and airport modernization. We have co-invested with groups like MSC, Bolloré, and others in places like Togo and Cape Verde to improve logistics and reduce export costs.

On financing, successful industrialization requires a full value chain approach. One reason Morocco stands out, for example, is its ecosystem of SMEs and mid-sized firms that serve major manufacturers like Renault or Peugeot.

At IFC, we finance major industrial players but also support the middle links in these value chains, often through local banks, insurance firms, or investment funds. We also back FinTechs and specialized institutions that improve SME access to credit, a must for building a dense industrial base.

Ecofin Agency: You mentioned value chains. There is some concern that industrialization may focus too much on assembling imported parts. Can West Africa build real, fully integrated local value chains?

Olivier Buyoya: That is a crucial question. Industrialization is a step-by-step process. All countries that have industrialized, China, India, South Korea, started by building the basics: infrastructure, skilled labor, and regulatory frameworks.

All countries that have industrialized started by building the basics: infrastructure, skilled labor, and regulation.

In the auto sector, for instance, it makes sense to begin with assembly plants. These require flawless logistics, hundreds of parts must arrive on time. But to move beyond assembly, a network of local SMEs must be built to produce those parts. That takes time but is essential.

Look at bauxite again. Guinea produces over 120 million tons a year. Right now, most of it is exported raw. The real goal is to move up to alumina, then to aluminum. That requires cheap energy, around 3 cents per kilowatt-hour, otherwise it is impossible to compete with countries like Russia or the UAE. The groundwork is being laid, but progress must be step-by-step.

We also must not forget the role of the local market. ECOWAS, with 400 to 500 million people, offers huge potential. Urbanization and the rise of a middle class are driving demand for construction materials, consumer goods, and energy. This momentum will attract industrial investors, as long as the basics (energy, infrastructure, business climate, and skills) are in place.

ECOWAS, with 400 to 500 million people, offers huge potential.

Ecofin Agency: IFC mainly works with the private sector, but conditions vary across countries. Some like Côte d’Ivoire and Senegal are relatively stable, while others are more fragile. How does IFC operate in more difficult environments?

Olivier Buyoya: Stability helps a strong private sector emerge. But we must also recognize the resilience of private enterprise in fragile countries like Mali, Burkina Faso, or Niger.

Despite security challenges, there is strong business activity, especially in agro-industry and processing. Many local or regional investors are stepping up. These countries also have significant mining potential. While insecurity can discourage international investors, local private players continue to grow.

They face the same barriers: energy, infrastructure, business climate, and training. These countries are landlocked, making things even harder. Reviving key connections like the Dakar–Bamako railway would make a big difference.

And we should not overlook the energy of Sahelian entrepreneurs, who are also investing in neighboring countries. This shows the potential is real, even in difficult settings.

Ecofin Agency: International public funding is drying up, with aid shifting and the U.S. and Europe changing their approach. How is IFC adjusting to these changes in West Africa?

Olivier Buyoya: Several major changes are reshaping global cooperation. First, U.S. trade policy shifts, like higher tariffs, have a global impact, and potentially affect our region too.

Some African countries currently enjoy preferential access to U.S. markets under programs like AGOA. If these benefits were scaled back, it would hurt our exports’ competitiveness. This is something we must prepare for.

At the same time, development aid is gradually shrinking. It began in the U.S., but other donors are now also cutting back. Fortunately, the concessional financing we mobilize at IFC has not yet been severely affected. Most of our funds come from capital markets thanks to our AAA rating, which allows us to continue operating.

Development aid is shrinking. It began in the U.S., but other donors are also cutting back.

For West Africa, these changes mean we need to adapt. It may be the right time to deepen regional economic integration and focus more on the continental market, especially through the African Continental Free Trade Area (AfCFTA). This could help offset reduced access to overseas markets.

It is also a chance to tap more private capital and market-based funding to make up for shrinking public sources. Africa is less integrated into global trade than other regions, which limits immediate impact. But it also gives us space to build homegrown solutions centered on our own strengths and markets.

It is also a chance to tap more private capital and market-based funding to make up for shrinking public sources.

Ecofin Agency: IFC finances many FinTech companies. What role do they and other new technologies play in boosting West Africa’s industrial growth?

Olivier Buyoya: This is a key part of our strategy. We invest heavily in tech-focused funds, including FinTech, AgriTech, and HealthTech, because these startups offer real solutions to structural problems.

In agriculture, West Africa still lags in agro-industrial development mainly because of poor coordination between farm production and processing. It is not a land or water issue, it is about low productivity. Farms are small, have little machinery, and lack support.

West Africa lags in agro-industrial development mainly due to poor coordination between farming and processing.

AgriTech platforms provide agricultural extension services, advice, and farmer support using technology. This improves yields and helps ensure the quality and quantity of raw materials needed by processors.

At the same time, FinTech companies speed up payments along value chains. A small business selling to a large company and waiting 60 days for payment can, with FinTech, access working capital more quickly. This keeps the cash flowing between the links in the chain.

These technologies act like pipelines that move the most vital element, cash, faster. They boost productivity, improve competitiveness, and help our economies catch up more quickly.

FinTech companies act like pipelines that move the most vital element, cash, faster.

Ecofin Agency: Final question. In the face of climate urgency, how does IFC include sustainability in its West Africa investments?

Olivier Buyoya: Sustainability is central to our strategy. West Africa is already feeling the effects of climate change, floods, droughts, sometimes both in a single year. This is not theoretical; it is real and happening on the ground.

That is why we only finance projects led by clients who share this vision. And beyond climate concerns, sustainability is an economic opportunity. When we support industrial or mining value chains, we strongly promote the use of renewable energy sources, like solar, which can lower both emissions and costs.

Thanks to technology, it is now possible to build competitive energy mixes that are also eco-friendly. This is now a business advantage, not just a regulatory requirement.

Thanks to technology, it is now possible to build competitive energy mixes that are also eco-friendly.

Before funding any project, we carry out thorough environmental and social assessments: impact on communities, waste management, energy efficiency, pollution control, and more. Our clients value this process because it strengthens the long-term viability of their projects. It is not dogma, it is smart economics.

Interview by Moutiou Adjibi Nourou

Edited in English by Firmine AIZAN