The Central Bank of Nigeria and the International Finance Corporation, which is part of the World Bank Group, have agreed to increase local currency funding. This will allow over $1bn in investments to be made in key areas of the Nigerian economy.
This is what the IFC and the CBN said in a joint release to the press on Monday.
IFC Managing Director Makhtar Diop and CBN Governor Yemi Cardoso signed the deal. It will give naira-based loans to areas like housing, energy, small and medium-sized businesses, and Nigeria’s creative and youth industries.
This deal will help private businesses grow by making it easier for them to get long-term, low-cost funds in the local currency, which is necessary to lower currency risks.
The statement said, “The Central Bank of Nigeria and IFC, a member of the World Bank Group, have signed an agreement to increase funds in local currency to help private businesses in Nigeria grow and thrive.”
“The partnership will help IFC handle currency risks and put more money into the Nigerian naira in key economic areas like housing, infrastructure, energy, small and medium-sized businesses, the creative and youth economy, and agriculture.”
With a goal of giving more than $1bn in the next few years, IFC wants to greatly increase the amount of money it lends to Nigeria’s most important sectors. A lot of these areas need money in the local currency, and IFC’s relationship with the CBN is a key way to make that possible.
In the statement, Cardoso was quoted as saying that the partnership was a “pioneering initiative” that showed the CBN’s move toward new ways to finance things by working with trustworthy global institutions.
He made it clear that the deal fits with the goals of the Federal Government to make the economy more diverse and encourage long-term growth.
Diop also said that IFC was committed to boosting economic growth. He said, “IFC needs to make it easier for small businesses in Nigeria to get affordable local currency loans in order to meet the growing demand for a variety of funding options and better manage currency risk.”
“Our partnership with the Central Bank of Nigeria will make it easier to lend money in the Nigerian naira, which will help the economy grow and create jobs all over the country.”
It was also said that Nigeria is the second-largest recipient of IFC loans in Africa, with a stock worth $2.13bn.
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