Fragile and Conflict-Affected Situations

Estimates show that half of the world’s extreme poor now lives in countries classified as fragile and conflict-affected situations (FCS) and by 2030 this share is projected to rise to nearly 60 percent.

Supporting stability and growth in fragile and conflict-affected situations (FCS) is a top priority for IFC, and the private sector is critical to resilience and supporting stability and growth in these contexts. Private sector investments create jobs, generate economic growth and tax revenues, and provide crucial services. While every fragile situation has a unique and complex set of issues and the risks are high, there are ways for the private sector to help boost economic growth or support livelihoods.

As part of the World Bank Group's Strategy for Fragility, Conflict and Violence 2020-2025, IFC is actively engaging with the private sector to support countries’ transitions out of fragility and conflict. IFC is uniquely positioned to address the challenges of private sector development in these contexts by leveraging the One World Bank Group approach to create and strengthen markets, enable and mobilize private solutions and capital flows, and engage with partners.  

IFC has invested and mobilized nearly $18 billion in Long-Term Finance into FCS countries over the last decade.

In 2021, along with Ireland and Norway, IFC launched the Africa Fragility Initiative, a five-year program dedicated to supporting responsible private sector-led growth and job creation across 32 African countries affected by fragility and conflict. The initiative builds on 13 years of expertise, knowledge, and relationships developed through the IFC-led Conflict Affected States in Africa (CASA) Initiative which ended in December 2021 after delivering investments and advisory support in 13 fragile and conflict-affected countries.

Recognizing the essential role the private sector plays in lifting people out of poverty through sustained job creation and economic transformation, the International Development Association created the Private Sector Window (PSW) in 2017 to help catalyze greater private investment into fragile and conflict-affected situations and IDA-only countries, especially those where other institutions and investors have traditionally struggled to find commercially viable transactions.

It’s important to recognize that fragile economies demand a comprehensive approach that goes beyond country, regional, or sectoral strategies. Top-down or one-size-fits-all models rarely succeed in fragile situations — and can even exacerbate existing problems. Long-term solutions must also involve multiple partners — like-minded investors and development finance institutions who are willing to weather setbacks before clear progress is made.