Economy

World Bank-Owned IFC Partners CBN to Boost Currency Financing for Nigerian Businesses

Updated Monday, October 28, 2024 at 4:29 PM by Pascal Oparada 2 min read

The Central Bank of Nigeria and the International Finance Corporation (IFC) have struck a currency financing deal
The new deal will see the IFC invest in currency financing to boost businesses in Agriculture and other sectors
The $1 billion deal will boost the naira and help catalyse the Nigerian economy while promoting local businesses

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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The International Finance Corporation (IFC), owned by the World Bank Group, and the Central Bank of Nigeria (CBN) have agreed to increase local currency financing to allow private businesses in Nigeria to flourish.

The deal will allow the IFC to manage currency risks and increase its investment in Nigerian naira in critical economic sectors, including agriculture, housing, infrastructure, energy, small and medium enterprises (SMEs), and the creative and youth economy.

Agriculture and SMEs to get priority

The corporation aims to scale up the financing of critical sectors in Nigeria, providing over $1 billion in the coming years.

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Reuters reports that many sectors require local currency financing, and the IFC’s partnership with the apex bank is an essential tool for expanding access.

The governor of the CBN, Olayemi Cardoso, said the pioneering initiative between the parties will unlock the much-required long-term local currency financing for private businesses.

He stated that the partnership marks essential progress in the bank’s commitment to delivering innovative development initiatives via reputable third-party service providers, moving beyond traditional intervention programmes.

New deal will catalyse the economy

He added that the move would catalyse the economy and advance the Nigerian government’s agenda for economic diversification.

The IFC has an active portfolio investment in Nigeria worth $2.13 billion, the second highest on the continent. The new deal is a key for the corporation.

A big boost for the naira

IFC said it would continue leveraging innovative financial instruments and boosting partnerships to meet the growing demand for more local currency financing in emerging markets.

Experts believe the new deal will boost the naira, which has plummeted in the foreign exchange market.

A recent report by Legit.ng disclosed that the naira may end 2024 as the world’s worst-performing currency after crashing to N1,740 in the parallel market.

Naira as dollar inflows Hit $57 billion monthly

Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has disclosed that foreign exchange inflows into Nigeria hit $57 billion in August 2024.

Muhammad Abdullahi, CBN’s Deputy Director of Economic Policy, updated the audience on Nigeria’s forex situation in Washington, D.C.

Abdullahi stated that capital importation almost doubled to $6.9 billion in August this year, compared to $3.9 billion recorded during the 2023 financial year.