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Nigerian Bank of Industry to issue $883 mln in Eurobond to support local firms

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Bank of Industry (BoI), Nigeria’s development lender plans to raise as much as $883 million from international debt markets this year to boost support form local firms impacted by the Coronavirus pandemic.

The lender, formerly Nigerian Industrial Development Bank (NIDB) has ppointed financial advisers for the issue, Bloomberg qoted the Chief Executive Officer of the bank, Olukayode Pitan.

The lender will raise “anywhere between 500 million to 750 million euros,” Pitan told the news agency in a virtual interview without providing details.

The bond proceeds will be deployed to areas of priority including health care, transportation, education, solid minerals and agriculture, he said.

Nigerian firms have faced significant foreign-exchange constraints after lower oil prices cut income from crude sales, which account for most of the nation’s dollar earnings in Africa’s most populous country.

READ ALSO: Nigeria’s inflation rate declines to 17.38% in July, as food price increases slow

The bond sales will boost reserves and also increase funding for companies whose businesses have been impacted by the country’s two recent economic contractions in 2016 and 2020.

The bond will be the lender’s fourth international debt deal since 2018 and comes on the back of the Nigerian government’s appointment of financial advisers earlier this month for a planned $6.2 billion Eurobond issuance.

Established in 2001, the development finance institution is about the only lender among local banks that gives loans for up to 10 years at single digit rates, Pitan said. “The financing gap is a lot,” he said.

Nigerian authorities are encouraging banks to bolster credit to manufacturers and agriculture industries to grow the economy which expanded 0.51 percent in the first quarter.

The development bank also plans to set up as much as $100 million fund to provide credit to startups and information technology companies to enhance their contribution to the nation’s economic recovery, according to the CEO.

“It is going to be about $75 million to $100 million being promoted by the Bank of Industry,” he said.

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