Funding the future

Funding the future

International Finance Corp chief looks to expand its funding mission to new fields including healthcare and the creative economy.

Makhtar Diop, managing director, International Finance Corp
Makhtar Diop, managing director, International Finance Corp

Makhtar Diop is energetic, always eager to learn new things, and a humble leader. Since becoming managing director of the International Finance Corp (IFC) in March last year, the Senegalese economist has been actively exploring potential areas where the World Bank affiliate could expand as a financial backer, including the health sector, with a focus on Africa.

"I joined the IFC in the middle of the Covid-19 pandemic which is the largest shock that we have seen in the world economy for a very long time," Mr Diop recalls.

"(At that time) people were largely working from home. A lot of my new staff, who had been hired in the last two years, have never been to the office physically. They have been working remotely.

"This has been an interesting time with a lot of interesting challenges to make sure people are connected to people even though they are working from home," he says. "It was also an exciting year because I've been able to work with the team in responding to one of the largest crises which is Covid-19."

Known mainly for its infrastructure investments and lending through financial institutions to support private-sector investment in developing countries, the IFC has started to invest in healthcare through a platform that helps companies manufacturing protective equipment and vaccines.

"We did something that nobody else did," says Mr Diop. "Today we are helping three countries in Africa on the vaccine side, including Senegal, to produce mRNA [vaccine] in Africa which is something nobody thought would be possible."

In addition to Covid vaccine, Senegal is also producing vaccines for yellow fever, he adds. At the time of the interview, the IFC is also working with BioNTech, the German partner of Pfizer, to produce vaccine in Uganda. A company in South Africa, meanwhile, has been awarded a licence from Johnson & Johnson to produce a Covid vaccine for distribution in Africa.

"We are leading a syndication that will help the manufacturer restructure debt so that they will be able to invest in production lines for us," he adds.

The IFC is also looking at Ghana which wants to be a part of the value chain for vaccines, says Mr Diop.

"The idea is not only to serve the needs of the African continent but also (to produce vaccines that) can be exported. We are also looking at other type of vaccines like yellow fever. There are some trials of vaccines against malaria in the UK. If it works, it might be a game changer," he says, noting that hundreds of millions of people need to be vaccinated against malaria.

"That is something we would like to produce in Senegal and Uganda once it is ready, because mRNA technology allows you to be much more flexible in the type of vaccine you can produce, being able to shift from one vaccine to another."


One other area that the IFC is interested in is the creative economy -- fields such as fashion, film and music. "I think I would like to expand in many areas and creative is one," he says.

"If you look at the world today, some of the largest companies in the world are in the creative industry like Netflix or Spotify, so we cannot ignore it.

"In the past, the sector was just a small part of the economy but now it's the main part in a lot of countries, so I think it's important to look at it very carefully."

As well, many key people in the creative industry are opinion leaders on important issues like climate change or environment-related topics, especially among young people. "It's very important that if you want to have a green economy in countries, you have to find a way to change people's minds to focus on the issue," says Mr Diop.

Lastly, the creative economy is a source of job creation. "If you take Asia, Bollywood is a big industry and is a huge part of the (Indian) economy. So being able to contribute to that economy is important. That's why I'm interested in the creative industry."

The IFC also is keeping abreast of new trends through a "disruptive technology" department, which is in charge of the startup ecosystem. "I also look at all the activities millennials are involved in," he says. "Millennials and startups are the economy of today. With our support, these startups can bring new ideas, disrupt the system and make things faster. So, we need to be totally in that ecosystem."

According to Mr Diop, the IFC increased its commitments in the health sector by 10 times last year. Meanwhile, 32% of IFC loans are for climate change-related activities, including loans given to banks, investments in bonds and direct lending to companies.

"We have been able to increase our commitment on climate change," he says, especially through innovations on the bond side. Among those is MCPP One Planet, which combines institutional investor contributions with IFC's own funds to scale up climate-responsible financing for private companies in emerging markets.

The IFC has also been active in blue bonds, financial instruments issued to help unlock the potential of the ocean economy, while also protecting the marine environment. During his visit to Bangkok in May, Mr Diop took part in the signing of an agreement with TMBThanachart Bank (ttb), the first commercial bank in Thailand to issue a blue bond.

The IFC will subscribe to up to US$50 million for the blue bond that will help ttb expand its financing for eligible blue economy assets. It will help ttb structure the bond and assist in developing a blue finance framework. As well, it is supporting ttb's broader sustainability agenda, including a green bond subscription of up to $100 million dedicated to financing customers' purchases of electric vehicles.

As a major global financial institution, IFC observes criteria that have been adopted by the world community in line with the Paris climate agreement, he notes. "In 2023, 85% of our lending will be Paris-aligned, and 100% in 2025, so we are really moving aggressively on climate change."


The first African to lead the IFC, Mr Diop began his career as a financial analyst and authorised agent for the Union of Senegalese Banks in Dakar. Between 1986 and 1993, he was a technical adviser to the Senegalese Ministry of Economy and Finance.

He joined the International Monetary Fund (IMF) in 1997 as an economist but later returned home to serve as minister of economy and finance in the second government of Prime Minister Moustapha Niasse from 2000-01.

During his time in office, Mr Diop initiated restructuring of the customs and treasury modernised the ministry and secured the country's first sovereign debt credit rating from Standard and Poor's.

He first joined the World Bank in October 2001 and held various positions, becoming the first French-speaking African to be appointed as vice-president for Africa in 2012, responsible for Sub-Saharan countries. He subsequently served as the bank's vice-president for infrastructure from 2018 until March 1, 2021, when he was named managing director and executive vice-president.

"I'm very honoured and humble to be recognised in that realisation," Mr Diop says of his appointment. "It shows that the world is recognising that a lot of talents are available in Africa and can be put at the highest level of organisations.

"Now I am bringing my own experience (of working) in government to work in the private sector," he notes. "When I talk about private sector development to the minister of finance of Thailand, I am kind of putting myself in his shoes and understanding what the problems are, and why this is a constraint because I used to be in that position.

"When I talk to some public entities, I understand and I can tell them from my personal experience at the IMF or the World Bank why our officials are thinking this way or another way. All that helps me to present some products that are the most suitable in that area."

Citing his personal background, Mr Diop says his love of sport taught him to be the person he is today. "I used to practise karate until my late twenties," he recalls. "I was on the national team and we went to the world championship."

Before switching to karate, he did track and field sports at high school and college. "I was the best in my category and won a lot of titles," he says. "I was lucky to have a very good educator in track and field -- a three-time Olympic finalist.

"He taught us a lot about discipline, learning to be humble, not to boast too much. He would always tell us to calm down, not to shout or scream. The same values (apply) for karate. Sensei (master) will always tell you to be humble.

"Sport teaches you to be resilient. One day you win, some days you lose. My coach always said that if you lose, don't blame the referee, blame yourself. So, win with respect, lose with dignity. And when you are at the top, don't be cocky," he stresses.

"Also, think about other people that don't have a lot that you have in life, who are working as hard as you are, who are more intelligent than you are but life didn't give them the opportunity that you have."


The IFC chief also believes in life-long learning. "This is something very important. Your (university) degree gives you a solid foundation but after that, you need to keep it alive and you have to learn every day from your colleagues or from things that you read," he tells Asia Focus.

When he first joined the IFC, Mr Diop decided to organise a "Learning Friday" activity. "Every Friday, I ask someone in my team to meet me for a couple of hours and tell me about something I don't know," he explains.

"When I started the job in the first year, I wanted to learn in detail what other people were doing. I also wanted to show my staff that maybe there is something you don't know in detail, so why don't we spend two hours with one person and talk about it."

Learning Friday gives Mr Diop the opportunity to "know his team beyond the managers".

"For instance, when I first joined the IFC I heard about blue bonds, which we now have with Thailand. … They sent me a brief and I read that brief, now I wanted to meet the person who did this. Can we sit for two hours and you tell me all about blue bonds? So, the team came and explained to me why they were doing this."

As well, reading helps Mr Diop keep himself updated. "I force myself to read economic articles whenever I can to keep myself updated on my profession. I try to read working papers regularly so I know what's happening.

"I'm also interested in science so I read magazines and papers on science to understand where technologies are taking us to because I think technologies can bring lots of solutions," he says, adding that he took a six-week course at Massachusetts Institute of Technology to obtain a better understanding of artificial intelligence and blockchain.

"You have to learn about things all the time. Learning about new things is one of my personality choices," he says.

Travelling is part of the learning experience, though he'd like to strike more of a balance there. "I like travelling. I travel a lot, far too much, but mainly for work. I don't travel enough for leisure," he notes.

"I like to discover other places. Whenever I travel for leisure, it's not so much for people but for scenery, just to discover a new culture."

One thing travel teaches us, in Mr Diop's view, is "the similarity between cultures". "Sometimes people emphasise the differences between cultures, I see much more similarities than differences -- for example, the way you show respect to your elders or relate to family," he says.

"When I speak to my colleagues who are from this part of the world (Asia), I say I understand. You don't have to explain to me too much."

Mr Diop says he wants spend some time travelling in this region to places in Laos or Cambodia.

"Maybe I will visit some temples. That's something I'd like to do but I want to do it right, not to do it like tourists," he says. "I like to visit a country with some friends from that region. We can go and visit a temple, have a nice lunch somewhere or go to a market, talk to people about what they do in daily life and see things they do in reality."


When asked about his mentors, surprisingly Mr Diop says they are not big names.

"When people ask me is there a big figure who inspires me, I say I was inspired by everybody who did great things like (Nelson) Mandela, but that was not who my real inspiration is," he reveals.

"What inspires me is little things that happen everyday. You meet a friend who you grew up with. That person is not doing well; he is sick. You meet him after 20 years and you ask, 'How are you doing?' He gives you a big smile and says, 'I'm fine'. You know that person is living a very hard life. That, for me, is an inspiration.

"I'm not going to say that this big name inspired me when I was growing up. If you have a friend or family member who has a complicated disease or have a child with that condition, and you see how those people behave with dignity. That for me is an inspiration because this is something concrete that you see.

"I'm inspired by people you meet every day. They teach you something, you know? People who have cancer and maybe they can't make it to the next month. And they are sitting in front of you and asking, 'Are you okay?' These people are more inspirational than big names."

Throughout our conversation, the IFC chief is relaxed with a constant smile on his face. It turns out that music is another one of his passions.

"I play electric bass," he says. "Not enough time these days but when I have time, I grab my bass and I play. It's my hobby.

"I'm more private than I look. I don't believe people can be very serious in their work," he concludes with another smile.

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