The Central Bank of Nigeria, CBN, has signed an agreement with the International Finance Corporation, IFC, to expand local currency financing and mitigate foreign exchange risks for Nigerian businesses.
The agreement, announced in a joint statement by the CBN and the IFC on Monday, aims to unlock over $1 billion in investments across key sectors of the Nigerian economy.
According to the statement, the partnership will focus on sectors such as agriculture, infrastructure, housing, energy, small and medium-sized enterprises (SMEs), and the youth and creative industries.
It will also allow the IFC, a member of the World Bank Group, to manage currency risks and increase its investments in Nigeria’s naira.
“IFC, a member of the World Bank Group, and the Central Bank of Nigeria have signed an agreement to increase local currency financing to enable private businesses in Nigeria to grow and thrive,” the statement said.
“Many of these sectors require local currency financing, and IFC’s partnership with the CBN is a key tool in expanding access.”
CBN Governor, Yemi Cardoso, described the initiative as a “pioneering initiative” reflecting the apex bank’s shift towards innovative financing solutions through collaboration with global institutions.
He emphasised that the partnership aligns with the Federal Government’s agenda to diversify the economy and foster sustainable growth.
Speaking on the partnership, IFC Managing Director, Makhtar Diop, reiterated the importance of naira-based financing for small businesses in Nigeria.
“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,” he said.
Diop added, “Our partnership with the Central Bank of Nigeria will enhance lending in Nigerian naira, fostering economic growth and creating jobs across the country.”
The statement further revealed that with a portfolio of $2.13 billion, Nigeria is currently the second-largest beneficiary of IFC’s financing in Africa.
The IFC said it aims to scale up its investments in Nigeria significantly in the coming years to further support economic development.
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