The African Development Bank of Nigeria (AfDB) and the European Investment Bank (EIB) have both agreed to provide fresh $70m into the Development Bank of Nigeria (DBN) assist in providing credit facilities to the needy sectors of the economy.
Under the arrangement, AfBD is to provide $50m in equity while the balance of $20m is to be provided by EIB.
According to a statement by the Media Adviser to the Minister of Finance, Oluyinka Akintunde, the amount would help to stimulate funding to critical sectors of the economy.
DBN came into being to confront financing difficulties hindering private sector investment in the country and as well, play an important and catalytic role in providing funding and risk sharing facilities to Micro, Small and Medium Enterprises.
The statement quoted the DBN Managing Director, Mr. Tony Okpanachi to have said “The Development Bank of Nigeria will overcome the funding gap in the Micro-, Small- and Medium-scale Enterprises space and help businesses unlock opportunities across Nigeria.
“DBN’s ambition is strengthened by the financial and technical support of international partners, including the European Investment Bank and African Development Bank.
“The new institution builds on international experience and uses a business model that has demonstrated proven success to enhance private-sector investment across Africa and around the world where other financing options are inadequate or absent.”
It also quoted the Director of the Financial Sector Development Department at the African Development Bank Stefan Nalletamby to have said that private sector businesses are critical to the development of the Nigerian economy as they possess huge potential for employment generation and output diversification.
He added, “There has been under-performance of these businesses and this has undermined their contribution to economic growth.
“Among the issues affecting their performance, the shortage of finance, particularly investment finance, occupies a very central position.
“The Development Bank of Nigeria is expected to contribute to mobilizing significant long-term financing to an important yet underserved sector with high development potential,”
The Vice-President of the European Investment Bank Ambroise Fayolle, said that new private sector investment is crucial to creating jobs and enable business to expand.
“The European Investment Bank is pleased to support the new Development Bank of Nigeria to strengthen private-sector investment in Africa’s largest economy.
“We look forward to continued close cooperation with Nigerian and international partners to ensure that once fully operational the new Development Bank of Nigeria can help harness the country’s economic potential,” he added.
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