IFC, a member of the World Bank Group, and the Central Bank of Nigeria (CBN) 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 naira across priority sectors of the economy, including agriculture, housing, infrastructure, energy, small and medium enterprises and the creative and youth economy.
This was disclosed in a statement jointly signed by IFC and CBN on Monday, October 28, 2024.
The IFC said it aims to significantly scale up its financing of critical sectors in Nigeria, with a goal of providing more than $1 billion in the coming years.
CBN Governor Olayemi Cardoso said: “Many of these sectors require local currency financing, and IFC’s partnership with the CBN is a key tool in expanding access.
“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.
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“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 programs. It will serve as a catalyst for economic growth and advance the Federal Government’s agenda for economic diversification.”
IFC Managing Director Makhtar Diop stated: “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.”
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