Nigeria borrows fresh €500m from Credit Suisse, others, to finance industrialization

The Nigerian government has announced fresh €500 million loan from Credit Suisse AG and a syndicate of international lenders to finance industrial activities and agriculture plans of the Bank of Industry (BOI)

According to Punch, the Minister of State, Budget/National Planning, Mr Clement Agba, after Wednesday’s Federal Executive Council meeting presided over by President Muhammadu Buhari, pointed out that the loan would lead to the creation of 1.2 million new jobs in the country.

“The main objective of the loan is to support industry; revitalise agro-industrial processing zones and to facilitate the creation of new jobs. We do believe that about 1.2 million jobs will be created through this facility,” said Mr Agba.

The Federal Government disclosed that the loan facility was to industrialize the country and finance Micro Small and Medium Enterprises activities (SMEs) focusing on the agricultural sector. Mr Agba stated that the loan is for the BOI, guaranteed by the Federal Government and to be executed through the Ministry of Finance.

“The loan is basically to finance major industrialisation projects and Micro Small and Medium Enterprises value chain in Nigeria for up to five years’ tenure at affordable rates.

“These rates are single-digit rates. The guarantor of the loan shall be the Federal Republic of Nigeria and this is going to be executed through the Ministry of Finance, Budget and National Planning.

“This will increase the income of farming communities and promote the inclusion of SMEs and small-holder producers in the industrial value chain and the deployment of transportation infrastructure that connect farming communities to processors and market,” Mr Clement Agba said.

However, according to Mr Agba, the loan would be swapped to naira to reduced exchange rate risk, therefore making it affordable to SMEs.

The loan will be swapped to naira by the Central Bank of Nigeria to mitigate the foreign exchange risk and the fund will, therefore, be available to Nigerian enterprises at a more affordable rate and in local currency,” Mr Agba said.

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