In a groundbreaking move, the International Finance Corporation (IFC), a member of the World Bank Group, has partnered with the Central Bank of Nigeria (CBN) to increase local currency financing for private businesses in Nigeria.
This strategic partnership, announced on October 28, 2024, in Washington D.C., aims to provide long-term financing at economically viable rates, empowering businesses to grow and thrive.
The agreement enables IFC to manage currency risks and increase its investment in Nigerian naira across key sectors, including agriculture, housing, infrastructure, energy, small and medium enterprises, and the creative and youth economy.
IFC has set an ambitious goal of providing over $1 billion in financing to critical sectors in Nigeria in the coming years.
This partnership is crucial in expanding access to local currency financing, which is essential for many of these sectors.
Governor Yemi Cardoso of the Central Bank of Nigeria hailed the initiative as a “pioneering” move that will unlock much-needed financing for private businesses in Nigeria.
He emphasized that this collaboration marks significant progress in the CBN’s commitment to delivering innovative development initiatives, moving beyond traditional intervention programs.
Makhtar Diop, IFC Managing Director, stressed the importance of expanding access to affordable local currency financing for small businesses in Nigeria.
He noted that this partnership will enhance lending in Nigerian naira, fostering economic growth and creating jobs across the country.
With an active portfolio of investments in Nigeria valued at $2.13 billion – the second highest in Africa – local currency financing is a top priority for IFC.
The partnership is expected to have a significant impact on Nigeria’s economy. By increasing access to local currency financing, IFC and CBN will provide long-term financing at economically viable rates, empowering businesses to grow and thrive.
This will also address the increasing demand for diverse funding options and better manage currency risk.
The partnership will also foster economic growth and create jobs across the country by enhancing lending in Nigerian naira.
Additionally, IFC will increase its investment in key sectors, including agriculture, housing, infrastructure, energy, small and medium enterprises, and the creative and youth economy.
This partnership underscores IFC’s commitment to leveraging innovative financial instruments and strengthening partnerships to meet the growing demand for local currency financing in emerging markets.
As Nigeria continues to navigate its economic development journey, this collaboration is poised to play a vital role in unlocking the country’s growth potential.
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