The International Finance Cooperation (IFC), a member of the World Bank Group, and the Central Bank of Nigeria (CBN) have signed an agreement to increase local currency financing.
According to a statement by CBN’s acting director, corporate communications department, Sidi-Ali Hakama, the agreement is to enable private businesses in Nigeria to grow and thrive.
Ms Sidi-Ali said that IFC aims to significantly scale up its financing of critical sectors in Nigeria, with a goal of providing more than one billion dollars in the coming years.
She said that those priority sectors included agriculture, housing, infrastructure, energy, small and medium enterprises, and the creative and youth economies.
“Many of these sectors require local currency financing, and IFC’s partnership with the CBN is a key tool in expanding access,” she said.
“The partnership will allow IFC to manage currency risks and increase its investment in the Nigerian Naira across priority sectors of the economy,” she said.
Meanwhile, the CBN Governor, Yemi Cardoso, said that this pioneering initiative would unlock much-needed long-term local currency financing for private businesses in Nigeria at economically viable rates.
“This collaboration marks significant progress in the
CBN’s commitment to delivering innovative development initiatives through reputable third-party service providers, moving beyond traditional intervention programmes.
” It will serve as a catalyst for economic growth and advance the federal government’s agenda for economic diversification,” he said.
According to Makhtar Diop, IFC managing director, 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 CBN will enhance lending in Nigerian Naira, fostering economic growth and creating jobs across the country,” he said.
Mr Diop said that with an active portfolio of investments in Nigeria of up to $2.13 billion—the second highest in Africa—local currency financing is a key priority for IFC.
He said that the corporation would continue to leverage innovative financial instruments and strengthen partnerships to meet the growing demand for more local currency financing in emerging markets.
The IFC is the largest global development institution focused on the private sector in emerging markets.
It works in more than 100 countries, using its capital, expertise and influence to create markets and opportunities in developing countries.
In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries.
It leverages private sector solutions and mobilises private capital to create a world free of poverty on a livable planet.
(NAN)
