Local currency financing is set to take a new turn in Nigeria, as the International Finance Corporation, a member of the World Bank Group and the Central Bank of Nigeria recently announced a deal cum strategy aimed to leveling up and opening more than $1bn in investments across key sectors of the Nigerian economy.
The deal which was signed by IFC Managing Director Makhtar Diop and CBN Governor Yemi Cardoso, is aimed towards providing naira-based financing to key sectors such as housing, energy, small and medium enterprises, agriculture, infrastructure, and Nigeria’s youth and creative industries in Nigeria.
This is contained in a joint press statement by the IFC and the CBN today, Monday, the 28th of November, 2024.
The contract agreed upon by all parties will enable private businesses to thrive by improving access to long-term, affordable local currency funding, which is important towards mitigating currency risks.
“IFC, a member of the World Bank Group, and the Central Bank of Nigeria have signed an agreement to increase local currency financing to enable private businesses in Nigeria to grow and thrive’’
“The partnership will allow IFC to manage currency risks and increase its investment in Nigerian naira across priority sectors of the economy, including agriculture, housing, infrastructure, energy, small and medium enterprises and the creative and youth economy’’
“IFC aims to significantly scale up its financing of critical sectors in Nigeria, with a goal of providing more than $1bn in the coming years. Many of these sectors require local currency financing, and IFC’s partnership with the CBN is a key tool in expanding access.” the statement read.
Cardoso described the partnership as a “pioneering initiative” that reflects CBN’s move towards innovative financing solutions through collaborations and partnership with very reputable global brands and institutions.
He added that the deal aligns with the Federal Government’s agenda to diversify the economy and towards building and establishing sustainable growth in the country.
The statement also read that with a portfolio of $2.13bn, the country is rated the second-largest beneficiary of IFC’s financing in Africa.
IFC also reiterated their commitment to fostering economic growth, stressing that, : “Expanding access to affordable local currency financing for small businesses in Nigeria is essential for IFC to address the increasing demand for diverse funding options and to better manage currency risk’’
“Our partnership with the Central Bank of Nigeria will enhance lending in Nigerian naira, fostering economic growth and creating jobs across the country” he said.
