Changing the Face of Sustainable Development in Africa: The Role of the International Finance Corporation

Abstract

Different regulatory instruments have sought to promote sustainable development, most especially, the integration of social and economic concerns in development activities. Multilateral Development Banks (MDBs) have taken it upon themselves to promote sustainable development practices by designing guidelines for their project financing activities and promoting sustainable financing practice through their clients. This approach ensures that the people affected by a project are better off as a result of the construction and operation of the project. The article investigates the extent to which the International Finance Corporation (IFC) guidelines are ensuring the diffusion of sustainable development practices in developing countries. The article discusses the updated provisions contained in the IFC’s 2012 Performance Standards in relation to the promotion of sustainable development. Also, it considers the critique and the impact of commercial bank project financing activities and their effect on promoting sustainable development. The article urges that the guidelines of the IFC provide an important framework for promoting sustainable development practices in developing countries.

Keywords: Environment, Sustainable Development, Equator Principles, International Finance Corporation, Performance Standards, Environmental Responsibility

JEL Classification: K20, K10, K11