IFC, CBN Forge Partnership to Enhance Local Currency Financing in Nigeria

The International Finance Corporation (IFC), part of the World Bank Group, has partnered with the Central Bank of Nigeria (CBN) to boost local currency financing, facilitating over $1 billion in investments across vital sectors of Nigeria’s economy.

This collaboration was announced in a joint press release on Monday. The agreement was signed by IFC Managing Director Makhtar Diop and CBN Governor Yemi Cardoso, aiming to provide naira-based financing for sectors including agriculture, infrastructure, housing, energy, small and medium enterprises, and Nigeria’s youth and creative industries.

The deal is designed to support private businesses by improving access to long-term, affordable local currency funding, which is crucial for mitigating currency risks.

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.”

The IFC aims to significantly enhance its financing in critical sectors, targeting over $1 billion in the coming years, particularly in areas requiring local currency support.

Cardoso described the partnership as a “pioneering initiative” that reflects the CBN’s commitment to innovative financing solutions through collaboration with esteemed global institutions. He highlighted that the agreement aligns with the Federal Government’s objectives to diversify the economy and stimulate sustainable growth.

Diop also reiterated IFC’s dedication to promoting economic growth, stating, “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. 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 noted that with a portfolio of $2.13 billion, Nigeria stands as the second-largest recipient of IFC financing in Africa.