Results
- $225 million in MIGA guarantees enabled $450 million in foreign direct investment in Sub-Saharan Africa’s hospitality sector.
- 14 contracts of guarantee
- 17 hotel projects with 2,900 hotel rooms completed in 3 years
- 1,860 jobs retained
- Each new hotel room creates 1.5-3 direct jobs
- Tourism has the potential to employ 18 million in sub-Saharan Africa by 2033
The Challenge
The tourism and hospitality sector is a key driver of Sub-Saharan Africa’s economic growth, and a major source of foreign reserves and jobs: the sector has the potential to add $168 billion in domestic revenue and foreign exchange, to strengthen supply chains, and to create over 18 million jobs by 2033. However, businesses in Africa struggle to attract international financing due to the perceived risks. By underwriting investments in the hospitality sector, MIGA’s guarantees helped bring in much-needed capital to protect and create new jobs.
WBG Approach
In 2021, MIGA signed a master contract of guarantees with Mauritius-based Kasada Hospitality Fund L.P., a private equity fund dedicated to the hospitality sector, to redevelop and construct hotels in seven countries in the Sub-Saharan Africa region. MIGA’s political risk insurance covers investments in hotels in Cameroon, Senegal, Côte d’Ivoire, Kenya, Namibia, Nigeria, and Rwanda, with the projects supporting job creation and retention. The guarantees provide coverage against the risks of transfer restriction, expropriation, and war and civil disturbance for up to 15 years. The projects under the master contract involved 14 contracts of guarantee, and 17 hotel projects, with 2,900 hotel rooms completed in just three years. Kasada’s investment was supported by a $160 million loan from IFC in partnership with French development finance institution Proparco.
In Abidjan, Côte d’Ivoire, MIGA’s guarantee supports Kasada’s investment in the greenfield development and operation of a 170-room hotel complex, part of a project that is helping to establish a business and hospitality hub while raising sustainability standards in an underserved area. In Lagos, Nigeria, the guarantee has facilitated the acquisition, refurbishment, and operation of the 181-room Movenpick Ikoyi Hotel. 
Altogether, MIGA’s $225 million in guarantees have enabled $450 million in foreign direct investments in Sub-Saharan Africa’s hospitality sector - about $205 million of it in IDA countries. Because of these investments in the region, about 1,860 jobs will be retained and created. However, the potential impact to the economy in terms of indirect and induced jobs is estimated to be significant, both through upstream and downstream activities, across the tourism value chain in these countries. IFC estimates that for every hotel room built in sub-Saharan Africa, between 1.5 and 3 direct jobs are created.