Nigeria’s state-owned Bank of Industry, which provides funding for companies in the West African nation, plans to sell its first debt as it seeks to support diversification of the economy from oil and boost employment.
The debt “will most likely be issued next year as local bonds to enable us to boost lending and profitability,” Chief Executive Officer Rasheed Olaoluwa said in a May 16 interview in Lagos, Nigeria’s commercial capital. The lender will appoint an adviser to guide on the size of the transaction, he said.
Economic growth slowed on an annual basis in the first three months of the year to 4 per cent from 5.9 per cent a quarter earlier after a slump in prices weighed on the oil industry, Nigeria’s main revenue earner, the statistics agency said May 14. Unemployment rose to 25 per cent last year from 24.7 percent in 2013.
Nigerian President-Electu Muhammadu Buhari, who unseated Goodluck Jonathan in a March presidential election, promised in his campaign to diversify the economy of Africa’s biggest crude producer and create at least one million jobs a year by providing loans to new small businesses. Buhari is due to be sworn in on May 29.
The Lagos-based Bank of Industry has asked Fitch Ratings Inc. for a rating next month that will enable investors to assess its performance and to take informed decisions on the bond, Olaoluwa said. The bank intends to increase its loans this year, beyond the N127 billion ($642 million) disbursed in 2014, he said, without giving targets.
The Nigerian government plans to “partially privatize” the bank by selling some of its stake, Olaoluwa said. “The aim is to broaden its funding sources and enable us play our role of development financial institution.” He declined to give further details.