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International Finance Corporation (IFC), a member of the World Bank Group, said it will provide up to $1 billion in financing to Nigeria over the coming years to help manage the nation’s currency risk in a new agreement signed with the Central Bank of Nigeria (CBN).
The IFC, in a statement issued on Monday morning, said it will be providing the foreign currency financing to enable private businesses in Nigeria to grow and thrive.
According to the statement, 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.
With the agreement, IFC plans to significantly scale up its financing of critical sectors in Nigeria, with a goal of providing more than $1 billion in the coming years.
It noted that many of these sectors require local currency financing, as such, IFC’s partnership with the CBN is a key tool in expanding the access.
Commenting on the agreement, the Governor of the CBN, Olayemi Cardoso, said, “This pioneering initiative between the IFC and CBN will 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.”
For his part, IFC Managing Director, Makhtar Diop said, “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.
“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. IFC will continue to leverage innovative financial instruments and strengthen partnerships to meet the growing demand for more local currency financing in emerging markets.”
