The International Finance Corporation (IFC), a member of the World Bank Group, has signed an agreement with the Central Bank of Nigeria (CBN) to enhance local currency financing, aiming to support the growth of private businesses in Nigeria.
In a joint statement by IFC’s Hlazo Mkandawire and CBN’s Hakama Sidi Ali, it was noted that this partnership will help IFC manage currency risks and increase its investments in Nigerian naira across key sectors such as agriculture, housing, infrastructure, energy, small and medium enterprises, and the creative and youth economy. IFC plans to significantly boost its financing in these critical sectors, targeting over $1 billion in the coming years.
The Need for Local Currency Financing
The statement highlighted that many sectors in Nigeria require local currency financing, and the partnership with CBN is crucial for expanding access to these funds. CBN Governor Yemi Cardoso remarked, “This pioneering initiative will unlock essential long-term local currency financing for private businesses in Nigeria at economically viable rates.”
Cardoso emphasized that this collaboration signifies a major advancement in the CBN’s commitment to innovative development initiatives through reputable third-party providers, moving beyond traditional intervention programs. He added that it will serve as a catalyst for economic growth and support the Federal Government’s agenda for economic diversification.
IFC Managing Director Makhtar Diop also commented, stating, “Expanding access to affordable local currency financing for small businesses in Nigeria is vital for addressing the rising demand for diverse funding options and better managing currency risks. Our partnership with the Central Bank of Nigeria will enhance lending in Nigerian naira, promoting economic growth and job creation across the country.”
