IFC, CBN sign agreement to boost local currency financing in Nigeria 

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.

According to a statement jointly signed by IFC’s Hlazo Mkandawire and CBN’s Hakama Sidi Ali, 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, to provide more than $1 billion in the coming years.

Need for local currency financing 

According to the statement, 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,” stated Governor Yemi Cardoso of the Central Bank of Nigeria.
• “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,” Cardoso added.

Also commenting on the partnership, IFC Managing Director, Makhtar Diop, said:

 “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  

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

What you should know 

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.

• A member of the World Bank Group — IFC is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries.

• In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet
• IFC said it would continue to leverage innovative financial instruments and strengthen partnerships to meet the growing demand for more local currency financing in emerging markets.