World Bank, CBN Sign Nigeria Financing Deal

World Bank, CBN Join Forces to Unlock Nigeria's Growth Potential

The pact, signed by IFC Managing Director Makhtar Diop and CBN Governor Yemi Cardoso...

CBN & IFC Partner to Provide $1 Billion in Local Currency Financing for Agriculture, Infrastructure, Housing & More

The International Finance Corporation (IFC), a member of the World Bank Group, has partnered with the Central Bank of Nigeria (CBN) to boost local currency financing, unlocking over $1 billion in investments for Nigeria's key sectors. This significant agreement was announced in a joint press release by the IFC and CBN on October 28, 2024, in Washington D.C..

The pact, signed by IFC Managing Director Makhtar Diop and CBN Governor Yemi Cardoso, aims to enhance financial inclusion and support economic growth in Nigeria. By providing local currency financing, the IFC will help Nigerian businesses access funds without the risks associated with foreign currency exchange.

This collaboration is expected to have a profound impact on Nigeria's economy, creating jobs and improving lives. The IFC's expertise in promoting private sector growth will complement the CBN's efforts to stabilize the financial system.

Vital Highlights:

Partnership: IFC and CBN join forces to enhance local currency financing

Investment: Over $1 billion to be invested in Nigeria's vital sectors

Signatories: IFC Managing Director Makhtar Diop and CBN Governor Yemi Cardoso

Objective: Promote financial inclusion, economic growth, and job creation in Nigeria

Sectors to Benefit

Agriculture: Enhancing food security and economic growth

Infrastructure: Improving transportation, energy, and telecommunications

Housing: Increasing access to affordable housing for Nigerians

Energy: Supporting renewable energy and energy efficiency projects

Small and Medium Enterprises (SMEs): Empowering entrepreneurs and job creation

Youth and Creative Industries: Fostering innovation and talent development.

This partnership is a significant step towards achieving economic diversification and growth in Nigeria. By providing local currency financing, the IFC and CBN are addressing the increasing demand for diverse funding options and managing currency risk. With an active portfolio of $2.13 billion in Nigeria, local currency financing is a top priority for IFC. This collaboration will serve as a catalyst for economic growth, creating jobs and opportunities across the country.

The statement read, “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 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.

“IFC aims to significantly scale up its financing of critical sectors in Nigeria, with a goal of providing more than $1bn in the coming years.

“Many of these sectors require local currency financing and IFC's partnership with the CBN is a key tool in expanding access.”

The Central Bank of Nigeria (CBN) and the International Finance Corporation (IFC) have teamed up to boost local currency financing in Nigeria, aiming to unlock over $1 billion in investments across vital sectors. CBN Governor Yemi Cardoso hailed this partnership as a “pioneering initiatives” that showcases the bank's shift towards innovative financing solutions in collaboration with esteemed global organizations.

Cardoso emphasized that this agreement aligns with the Federal Government's efforts to diversify the economy and stimulate sustainable growth. This move is expected to have a profound impact on Nigeria's economy, creating jobs and improving lives.

Makhtar Diop, IFC Managing Director, reiterated the organization's commitment to promoting economic development. He noted, “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.” This partnership will enable IFC to manage currency risks and increase its investment in Nigerian naira across priority sectors, including agriculture, housing, infrastructure, energy, small and medium enterprises, and the creative and youth economy.

“Our partnership with the Central Bank of Nigeria will enhance lending in Nigerian naira, fostering economic growth and creating jobs across the country.”