IFC to Onboard Bank of Industry, Others for Long-term, Low Interest Financing
The International Finance Corporation (IFC) is set to onboard the Bank of Industry (BoI) and some Deposit Money Banks (DMBs) and corporates to enable them access long term, low interest funding to support Nigeria’s fragile industries, THISDAY has learnt.
This onboarding will reportedly be facilitated during the BoI, IFC joint conference which kicks-off today in Lagos, where the convening chief executives and leaders from the financial and real sectors will discuss the current operating environment and identify synergies between participants to grow the county’s industrial base.
A source told THISDAY that the event is particularly unique as it will unfold several initiatives aimed at supporting the economy via revival of industries and creating jobs, adding that the intervention by BoI would also help in reducing pressure on the forex market, moderate inflation and reduce poverty.
The Managing Director/Chief Executive, BoI, Dr. Olasupo Olusi and Regional Vice President Africa, IFC, Sergio Pimenta, will address the conference with the theme, “Empowering Futures: A Collaborative Journey in Financing Nigeria’s Industrial Sector”.
A panel session on “Industrialisation as a Pathway for Economic Diversification” will be moderated by Chief Executive, Nigerian Economic Summit Group (NESG), Dr. Tayo Aduloju, and explores the role of the financial sector in facilitating a vibrant industrial sector.
The organisers see industrialisation as crucial for the country’s growth, providing a pathway for job creation, poverty reduction, improved living standards, innovation, economic growth, and sustainable development.
According to them, repositioning Nigeria as an industrial hub could enhance local manufacturing capabilities, integration into regional and global value chains, enabling specialization, competition, and export orientation.
Nigeria could further harness the potential to become one of Africa’s green manufacturing hubs, capitalising on scaling renewable energy, development of sustainable industrial zones, manufacturing low-carbon construction materials, chemicals and fertilizers while eliminating gas flaring.
This will broaden the economic base and lead to a more resilient economy, mitigating the impact of oil price volatility and foreign exchange scarcity.
In addition, the commissioner for Insuarnace (CFI)/Chief Executive, National Insurance Commission (NAICOM), Mr. Olorundare Sunday Thomas, will alongside other panellists discuss “Increasing Access to Funding through Risk Mitigation”.
The organisers argued that poorly structured projects (with respect to risk mitigation) have been identified as one of the largest barriers to accessing funding for projects, adding that often lenders have the liquidity and headroom to lend but are unable to underwrite the risk as presented.
The session will seek to unlock the role of the financial industry in collaborating to produce products that are more responsive to the needs of their clients in an affordable and sustainable manner.
Other intervention will aim to at “Unlocking Sustainable Funding for Industrialization”
According to the BoI, “The world is increasingly integrating Environmental, Social, and Governance (ESG) considerations for accessing funds, reflecting the commitment to responsible and ethical business practices.
“Climate risk is a rising concern and there are dedicated funds, such as the Global Energy Alliance for People and Planet (GEAPP), Korea Green Resilient and Innovative Development (K-GRID), Green Climate Fund (GCF) and Climate Investment Funds for green initiatives.
“Nigeria has diverse funding sources to drive sustainable industrialization and foster economic growth, including green, multilateral, bilateral, and private capital options. Nigeria can attract private capital through equity firms, venture capital, sustainable finance debt instruments, and impact investment funds.”