The Bank of Industry (BOI) has achieved a historic milestone by successfully raising €1.879 billion in 2024, the largest sum ever secured by any Nigerian or African development financial institution (DFI).

This capital infusion is set to significantly enhance BOI’s operational capacity, bolster its balance sheet, and support critical developmental projects across Nigeria. Let’s dive deep into the details of this remarkable achievement and its implications for Nigeria’s economic landscape.

Background and Significance: The Bank of Industry (BOI) is Nigeria’s foremost development finance institution, established to provide long-term financing and support to various sectors of the economy. Its primary mandate is to promote industrialization, economic growth, and job creation by providing financial assistance to businesses, particularly small and medium-sized enterprises (SMEs).

The successful capital raise of €1.879 billion in 2024 marks a significant milestone in BOI’s history. This achievement is not only a testament to the bank’s robust governance and strategic direction but also reflects the confidence of international investors in Nigeria’s economic potential. The capital raise was facilitated through a syndication process that attracted a diverse range of international investors, particularly from the Middle East and Asia.

Enhancing BOI’s Balance Sheet: The capital infusion is poised to enhance BOI’s balance sheet, expanding it by approximately N3.3 trillion, bringing the total to N7.1 trillion from N3.9 trillion recorded in 2023. This substantial increase in the bank’s balance sheet will enable BOI to undertake more significant developmental initiatives and address Nigeria’s pressing annual financing gap of over $35 billion.

The newly raised funds will primarily target critical developmental projects, particularly in infrastructure finance—a sector that necessitates long-term and high-value financing. By addressing infrastructure challenges that inflate operational costs for manufacturers, BOI aims to enhance the competitiveness of Nigeria’s real sector. The capital will also facilitate access to sector-specific funds aimed at gender equality, youth empowerment, micro, small and medium enterprises (MSMEs), agriculture, and sustainability initiatives.

Innovative Dual-Layer Guarantee Structure: One of the key factors contributing to the success of the capital raise was the innovative dual-layer guarantee structure employed by BOI. This structure leveraged support from the Africa Finance Corporation (AFC) and the Central Bank of Nigeria (CBN) to optimize risk-sharing. The syndication was oversubscribed by 187.9 percent, underscoring the robust confidence in BOI’s governance and strategic direction. Infrastructure development is a critical component of Nigeria’s economic growth strategy. The newly raised funds will enable BOI to support long-term, high-value infrastructure projects that are essential for sustainable development. By addressing infrastructure challenges, BOI aims to reduce operational costs for manufacturers and improve the overall business environment in Nigeria.

Supporting MSMEs and Vulnerable Sectors: A significant portion of the capital raised is earmarked for MSMEs, which are crucial players in Nigeria’s economic landscape. BOI’s strategic plan for 2025-2027 includes initiatives to provide low-interest loans with extended tenures to MSMEs, thereby enhancing their productivity and competitiveness. Additionally, the funds will support gender equality, youth empowerment, and sustainability initiatives, ensuring that vulnerable sectors receive the necessary financial assistance.

From a risk management perspective, the newly raised funds will enable BOI to mitigate credit risks associated with longer payback periods while fostering partnerships that will expand financial access to underserved demographics. The capital infusion will also strengthen BOI’s liquidity by establishing a robust funding base to support its financing operations. This will contribute to stabilizing inflation, foreign exchange, and overall economic conditions in Nigeria.

Performance Indicators and Global Confidence: The year 2024 stands out as a landmark year for BOI, marked by unprecedented achievements that solidify its reputation as one of Nigeria’s best-managed government institutions. The bank has maintained investment-grade ratings from Fitch and Moody’s since 2015, reflecting its sound management practices and global confidence in its developmental mandate. The successful capital raise further enhances BOI’s credibility and positions it as a trusted partner for international investors. Recognized for its sound management, BOI has consistently maintained investment-grade ratings by Fitch and Moody’s since 2015, underscoring its reputation as one of Nigeria’s best-managed government institutions.

This achievement reflects the quality of BOI’s governance, its financial management and the global confidence in its development mandate. According to the Managing Director/Chief Executive Officer of the BoI, Olasupo Olusi, the favourable terms associated with this funding will provide much-needed low-interest loans with extended tenures to Nigeria’s burgeoning private sector.

This aligns with President Bola Ahmed Tinubu’s vision for economic growth and stability. A significant portion of this capital is earmarked for MSMEs—crucial players in Nigeria’s economic landscape. The inclusion of BOI in President Tinubu’s New Year message as a key promoter of the National Credit Guarantee Company (NCGC) is expected to further secure resources mobilised from international markets by sharing risks associated with lending to MSMEs. The €1.879 billion syndication not only drew remarkable interest from a diverse array of international institutions across various countries but also attracted over 10 new international investors, particularly from the Middle East and Asia.

The 187.9 per cent oversubscription of the syndication highlights the innovative financing achieved through a dual-layer guarantee structure, leveraging support from the Africa Finance Corporation (AFC) and the Central Bank of Nigeria (CBN) for optimal risk-sharing. This structure allowed BOI to secure much lower interest rates than those typically applied to Nigerian debt instruments, resulting in savings of approximately 3.6 per cent per annum (or an estimated N295.7 billion over the three-year tenor). These favorable terms will reduce the cost of borrowing for the real sector making it more competitive.

President Bola Ahmed Tinubu’s Vision: The capital raise aligns with President Bola Ahmed Tinubu’s vision for economic growth and stability in Nigeria. In his New Year message, President Tinubu commended BOI for its leadership role in strengthening Nigeria’s credit delivery system and expanding access to credit for individuals and critical sectors of the economy. The federal government’s establishment of the National Credit Guarantee Company (NCGC) will further support BOI’s efforts by expanding risk-sharing instruments for financial institutions and enterprises. According to President Tinubu, The Company—expected to start operations before the end of the second quarter—is a partnership involving various government institutions alongside private sector entities and multilateral organizations.

President Tinubu stated that this collaboration will enhance confidence in Nigeria’s financial system, expand credit access and support underserved demographics such as women and youth, ultimately driving growth and improving living standards across the nation. BOI’s strategic plan for 2025-2027 includes a focus on digital transformation and innovation. The newly raised funds will support the implementation of internal strategies aimed at enhancing operational efficiency and customer experience. This includes investments in digital technologies and platforms that will streamline processes and improve service delivery.

Green, Climate, and Environmental Financing: Green, climate, and environmental financing have become central to BOI’s new strategic focus. The €1.879 billion raised will enable the bank to deepen its engagement in these vital areas, supporting projects that promote sustainability and environmental stewardship. This aligns with global trends and underscores BOI’s commitment to sustainable development. The successful capital raise of €1.879 billion by the Bank of Industry is a historic achievement that will have far-reaching implications for Nigeria’s economic landscape.

The capital infusion will enhance BOI’s balance sheet, support critical developmental projects, and address Nigeria’s pressing financing needs. By leveraging innovative risk-sharing structures and fostering international partnerships, BOI has demonstrated its capability to mobilize significant resources for sustainable development. The funds raised will support infrastructure development, MSMEs, gender equality, youth empowerment, and sustainability initiatives, ensuring that vulnerable sectors receive the necessary financial assistance.

From a risk management perspective, the capital infusion will strengthen BOI’s liquidity and contribute to stabilizing Nigeria’s economic conditions. As BOI continues to implement its strategic plan for 2025-2027, the focus on digital transformation, innovation, and green financing will further enhance its operational capacity and impact. The successful capital raise underscores the confidence of international investors in Nigeria’s economic potential and positions BOI as a trusted partner for sustainable development.    

Commitment to Gender Equality: Olusi believes that the formal adoption of the WeFi Code in Nigeria represents the Bank of Industry’s (BoI) collective commitment to gender equality, economic empowerment, and financial inclusion for women-led enterprises. As a key proponent of this initiative, BoI remains dedicated to empowering Women-owned Micro, Small, and Medium-sized Enterprises (WMSMEs) by providing them with the necessary resources, access, and opportunities for success. Women play a crucial role in driving innovation and economic growth across various industries in Nigeria.

However, they often face significant barriers in accessing finance, which has hindered their full potential. Through its Gender Desk, BoI offers tailored support to address these challenges. As of December 2023, the bank has financed 833 women-owned or women-led businesses, disbursing a total of N99 billion to help these businesses grow. Looking ahead, BoI recognizes the importance of gender development and has made it one of its six key focus areas.

“To this end, BoI has developed a comprehensive gender strategy that will guide our efforts over the coming years. As part of this bold vision, we are committed to allocating at least 15% of our risk assets to WMSMEs, clearly demonstrating our commitment to expanding financial access and supporting the growth of women entrepreneurs across the country, in alignment with President Bola Ahmed Tinubu’s Renewed Hope Agenda,” Olusi explained. Through the We-Fi Code, BoI is taking concrete steps to break down the barriers faced by women by using data and bringing together key stakeholders. The goal is to ensure a more equitable distribution of financial resources.  

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