Nigeria’s central bank and the International Finance Corporation (IFC) signed an agreement to expand local-currency financing in Nigeria, aiming to reduce exchange-rate risk for businesses and increase demand for naira loans.
According to a joint statement released on Monday, the IFC plans to invest over $1 billion in Nigeria’s agriculture, housing, infrastructure, and energy sectors. The partnership will help manage currency risks, enabling the IFC to channel more funds in naira to critical sectors.
Nigerian businesses were hit hard by the June 2023 naira devaluation, which has since weakened 71% to around 1,600 per dollar. The shift has increased foreign-currency loan costs for companies like Nigerian Breweries Plc, MTN Nigeria, and Ecobank Nigeria, prompting them to reduce dollar debt.
The IFC has consistently demonstrated its commitment to driving growth in emerging markets through innovative financial solutions, which include this recent move toward more robust local currency financing options.
