CFC joins UN Meeting on LLDCS
The CFC participated on the tenth Inter-Agency Consultative Group (IACG) Meeting on the Follow-up and Implementation of the Vienna Programme of Action for the Landlocked Developing Countries (LLDCs). The meeting focused on consultations on the draft UN Roadmap for Accelerated Implementation of the Vienna Programme of Action in its remaining five years, including the support of the UN system to LLDCs to deal with the impacts of the COVID-19 pandemic.
In its intervention, the CFC noted that many landlocked developing countries rely on low-value agricultural products for their exports earnings, from a very limited number of commodities. With low productive capacities and several structural weakness, they can’t add meaningful value to their products. Giving their constraints in reaching more diversified markets, their economies become especially vulnerable to commodity price and demand volatility.
To overcome these challenges, the LLDCs have to encourage investments in their productive sectors, taking advantage of their commodity endowment and supporting the emergence of a diversified economic system by strategically re-investing commodity derived incomes. The CFC believes that the private sector can be a valuable partner in achieving this goal. By investing in small and medium-sized enterprises, the Fund expects to empower primary producers, giving them the tools and resources to scale up on the value chain.
During the period 2014 to 2020, CFC’s Executive Board has approved 19 projects operating in LLDCs to receive financial support from the Fund. The total value of these projects is USD 49.2 million of which about USD 15.3 million is committed by the CFC. For the next five years, according to CFC’s operational plan for 2021-2025, the Fund expects to commit USD 60 million for projects, of which approximately USD 16 million will be committed to development of innovative enterprise in commodity sector in LLDCs.
Regarding CFC’s response to Covid-19, it was explained that CFC supports many good SMEs in its portfolio, and the Fund will continue to make sure they survive this current crisis and flourish afterwards. The CFC is closely monitoring the situation of the commodity producers and it is actively engaging with its borrowers to understand the particularities of their challenges. The CFC has the facilities and experience in managing the necessary instruments and further measures will be taken to support qualifying SMEs to mitigate their losses and thereby weathering this storm.
In this regard, the CFC intends to implement an emergency liquidity facility of about Two Million USD as mitigation support to our projects that have been impacted by the pandemic. This is subject to approval of our Executive Board, which are very hopeful of so we can make this available at the earliest.
The CFC will remain on the lookout for being a part of a good ecosystem of business support actors, with shared objectives and complementary strengths, with priority for the more vulnerable at the margin, to deploy solutions for resilience and recovery.
The full statement of the CFC in the meeting can be found here.