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Bank of Industry: A focal point of Nigeria’s new industrial push

Through a combination of policy initiatives and the preparedness of the Bank of Industry (BOI) under Dr. Olasupo Olusi, the country’s largest and oldest development institution is now seen as the home for President Bola Ahmed Tinubu’s renewed push for Nigeria’s industrialisation. The Bank’s role and relevance has increased tremendously in the last year and has just secured a nearly 2 billion Euros syndicated loan to prepare for the future.

Its recent success in raising €2 billion – the largest fundraising effort in its history – was both a culmination of disciplined six months work and the preparation to accommodate more developmental responsibilities in the Nigerian economy. That has become increasingly the only hope for small and medium sized companies in the face of high and rising banks interest rates of over 30 percent. BOI has this become the backbone in Nigeria’s industrialization agenda, provide both large-scale and long term funding to priority sectors like agro-processing, technology, manufacturing, and renewable energy – all industries vital for economic diversification.

Improved Financial Performance

While BOI have always had superior financial performance, the Bank’s capacity has grown dramatically in the last 12 months. For instance, BOI’s €2 billion (N3.4 trillion) raise from global institutions gave it a substantial capacity to boost financing for Nigeria’s businesses, raising the Bank’s total assets from N3.91 trillion in December 2023 to N6.38 trillion by end of September 2024, giving Nigerian businesses access to affordable (9-14 percent), long-term capital and job creation facilitation. The Bank was able to grow remarkably showing and attesting to a remarkable increase in its financial performance.

Attracting Funding from Foreign Institutional Investors

The BOI’s ability to attract significant foreign funding is a testament to its credibility and growing global reputation. The €2 billion loan raised in 2024 involved contributions from prominent institutions like the European Investment Bank (EIB) and other international development finance organizations. The Africa Finance Corporation (AFC) acted as the global coordinator, lead co-arranger, and guarantor, supported by banks like Standard Chartered, Afreximbank, First Abu Dhabi Bank, and others. This syndication marked a significant milestone, becoming the largest in BOI’s history and Africa’s development finance landscape. Proceeds are for corporate purposes, trade financing, and industrialization projects in Nigeria, reflecting investor confidence in BOI under Dr. Olasupo Olusi’s leadership.

The success of this syndication underscores market confidence in BOI’s history in delivering funding access in high impact areas of the economy in low costs to industries. Proceeds will be used for trade financing and supporting industrial and trade-related projects in Nigeria, directly impacting critical sectors like manufacturing, infrastructure, and exports. Effectively, BOI is now the bridge between global investors interested in Nigeria’s industrial development and companies.

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Under the leadership of Dr. Olasupo Olusi, BoI has consistently demonstrated financial prudence and the ability to continuously attract significant foreign funding. AFC’s A3 investment-grade rating from Moody’s further enhanced the bank’s credibility during the syndication process.

Foreign investors are drawn to BOI not only for its financial performance but also for its adherence to global best practices in governance and transparency. The bank’s emphasis on sustainable development, particularly through green financing, aligns with international goals, such as the UN’s Sustainable Development Goals (SDGs). This alignment enhances its attractiveness to foreign partners, who view the BOI as a reliable vehicle for impactful investments in Nigeria.

What This Means for Nigeria’s Industrialization

The €2 billion raised by the BOI has profound implications for Nigeria’s industrialization efforts. It guarantees access to affordable, long-term financing for entrepreneurs, industrialists, and SMEs – addressing one of the most significant barriers to industrial growth in the country. For example, agro-processing businesses can now acquire modern machinery, manufacturers can expand production lines, and tech entrepreneurs can develop innovative solutions with the assurance of funding.

The BOI’s financial strength also positions it to support large-scale projects that can transform Nigeria’s economy. Industrial parks, renewable energy plants, and export-oriented manufacturing initiatives are just a few areas that stand to benefit. The funding ensures that Nigeria remains competitive on the global stage while addressing local challenges like unemployment and import dependency.

A New Strategic Focus

Under the leadership of Dr. Olasupo Olusi, the BOI has refined its focus to address emerging challenges and opportunities. Dr. Olusi, a seasoned expert in development finance, formerly at the World Bank, has emphasized three core priorities for the bank: innovation, sustainability, and economic resilience.

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The Bank of Industry (BOI) has set an ambitious target for the first quarter (Q1) of 2025. It is going to ensure that its services get to Nigeria’s 36 states. BOI’s assurance to reach 36 States by Q1 of 2025 comes as Nigeria grapples with economic challenges, making institutions like Bank of Industry to play a critical role in providing funding for the private sector and fostering development.

In addition, the bank said its non-interest banking service is also coming up soon. At a time when accessing capital is increasingly difficult for businesses due to global financial constraints and rising inflation, BOI has emerged as a vital player with single digit interest loans while interest rates are as high as 35 percent in commercial banks.

The BOI recognizes the challenges of operating in a volatile global economy and a complex domestic environment. To address these, the bank has strengthened its risk management frameworks and expanded its partnerships with government agencies and private sector stakeholders.

The bank is also investing in digital transformation to improve efficiency and transparency. A new digital lending platform allows businesses to apply for loans seamlessly, reducing bottlenecks and improving access for entrepreneurs in remote areas. This technological   advancement ensures that funds from the €2 billion raise are deployed effectively and equitably.

Beyond its core role, the BOI has taken on broader responsibilities to support Nigeria’s development goals. It now plays a significant role in driving financial inclusion, providing training and resources to underserved demographics. The bank has also been pivotal in advancing Nigeria’s climate agenda, supporting projects that align with the global energy transition.

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The Bank of Industry’s €2 billion fundraising milestone is more than just a financial achievement, it is a game-changer for Nigeria’s industrialization. With a growing capacity to support key sectors, an improving financial performance, and strong global partnerships, the BOI is driving transformative change across the industrial landscape. Under the visionary leadership of Dr. Olasupo Olusi, the bank is poised to overcome challenges and expand its impact, ensuring that Nigeria’s industrial ambitions become a reality.

ThinkBusiness Africa

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