AfDB: African Development Bank (AfDB) and other partners such as World Bank are investing over a billion dollars in Nigeria’s power, health and agriculture sectors this 2018 and by that, the bank hopes that the country’s Small and Medium-scale Enterprises (SMEs) landscape will change significantly.
The bank’s Nigeria Country Director, Ebrima Faal, told reporters last week at its new multi-million dollar building that the bank and its partners will invest over $1 billion in sectors of Nigeria’s economy, from a $5.5 billion Nigerian portfolio, from which it had been investing $700m annually over past four years.
A $900 million investment in power, and other investments in road networks, water and sanitation, and other infrastructure not captured in the aforementioned $1.4 billion investments, positions the agriculture sector as the “biggest game changer” for Nigeria, the bank’s president, Dr Akiwunmi Adesina believes.
Through these investments, agribusiness players can buy, process foods, and help “enable agriculture to get industrialised add value to it,” which “will obviously change opportunities for millions and millions of people”.
It will be recalled that last week, the bank released its Economic Outlook for Nigeria, where it saw the country’s GDP to grow by 2.1 per cent. The bank called for more investments in Africa’s infrastructure, which requires about $130 billion to $170 billion a year.
Adesina expects that with these investments in Nigeria’s infrastructure, its rural economy will be significantly improved, as the investments help create more access to farmers, “reduce huge amounts of post-harvest losses,” and help “change the structure of agriculture itself.”
As the bank focuses on infrastructure investments for Nigeria, it is mulling some changes in the country’s SMEs sector, according to the bank’s president.
For instance, it is reviewing whether lines of credits granted to commercial banks to help SMEs have access to financing are actually helping the sector improve grow; and if the terms of lending are “more concessionary so that you know that you’re actually helping to credit affordable credit for them; and at the end of the day, that the lines of credit themselves are leading to clearly defined developmental goals and impact.”
In essence, the bank’s approach to providing lines of credit for SMEs are changing going forward, and the beneficiaries are the SMEs and entrepreneurs.