CBN, IFC collaborate to boost local currency financing

By Abdulfatah Babatunde

The International Finance Cooperation (IFC) and the Central Bank of Nigeria (CBN) have signed a collaborative agreement to increase local currency financing.

TheNewsZenith reports that Hakama Sidi-Ali, the CBN’s acting Director of Corporate Communications, announced the partnership in a statement on Monday in Abuja.

Sidi-Ali stated that the agreement was to enable private businesses in Nigeria to grow and thrive.

She said that the IFC, a member of the World Bank Group, aims to scale up its financing of critical sectors in Nigeria, to provide more than one billion dollars in the coming years.

“Those priority sectors included agriculture, housing, infrastructure, energy, small and medium enterprises and the creative and youth economy.

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

“The partnership will allow IFC to manage currency risks and increase its investment in the Nigerian Naira across priority sectors of the economy,” she said.

In his remarks, CBN Gov. Yemi Cardoso said the pioneering initiative would unlock the long-term local currency financing for private businesses in Nigeria at economically viable rates.

Cardoso noted that the collaboration “marks significant progress in the CBN’s commitment to delivering innovative development initiatives.

“This is coming through reputable third-party service providers, moving beyond traditional intervention programmes.

“It will serve as a catalyst for economic growth and advance the Federal Government’s agenda for economic diversification,” TheNewsZenith quotes him as saying.

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Makhtar Diop, IFC Managing Director, said expanding access to affordable local currency financing for small businesses in Nigeria was essential.

“This is essential for IFC to address the increasing demand for diverse funding options and to better manage currency risk.

“Our partnership with the CBN will enhance lending in Nigerian Naira, fostering economic growth and creating jobs across the country,” Diop said.

He added that IFC has an active portfolio of investments of up to $2.13 billion in Nigeria. This is second highest in Africa, he said, adding “local currency financing is a key priority for IFC”.

IFC boss also said the corporation would continue to leverage innovative financial instruments and strengthen partnerships.

According to him, such partnerships would help to meet the growing demand for more local currency financing in emerging markets.

TheNewsZenith reports that the IFC is the largest global development institution focused on the private sector in emerging markets.

It works in more than 100 countries. And, it is using its 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.

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By Abdulfatah Babatunde

The International Finance Cooperation (IFC) and the Central Bank of Nigeria (CBN) have signed a collaborative agreement to increase local currency financing.

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