The International Finance Corporation (IFC), a member of the World Bank Group, has entered into a strategic agreement with the Central Bank of Nigeria (CBN) aimed at enhancing local currency financing to fuel the growth and development of private businesses in Nigeria. This partnership is set to empower sectors critical to the Nigerian economy, including agriculture, housing, infrastructure, energy, small and medium enterprises (SMEs), and the creative and youth economy.
The agreement will enable the IFC to effectively manage currency risks, thereby facilitating increased investment in the Nigerian naira across these priority sectors. The initiative is part of IFC’s broader strategy to significantly scale up its investments in Nigeria, with ambitions to provide over $1 billion in financing in the coming years. Many of these sectors necessitate local currency solutions, and the collaboration with the CBN is pivotal in expanding access to such financing.
CBN Governor Yemi Cardoso praised the initiative, stating, “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. 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.”
The initiative underscores a strategic shift towards providing affordable local currency financing for small businesses, addressing the rising demand for diverse funding options while better managing currency risk. IFC Managing Director Makhtar Diop remarked, “Our partnership with the Central Bank of Nigeria will enhance lending in Nigerian naira, fostering economic growth and creating jobs across the country.”
With an active investment portfolio in Nigeria valued at approximately $2.13 billion—the second highest in Africa—local currency financing remains a key focus for the IFC. The organization is committed to leveraging innovative financial instruments and strengthening partnerships to meet the increasing demand for local currency financing in emerging markets.
This synergy between IFC and CBN represents a significant milestone in Nigeria’s economic landscape, promising to drive growth and diversification while supporting private sector development and job creation.