Appraising BOI’s commitment to industrial growth, social investment

In a year marked with economic and social turbulence, the Bank of Industry (BoI) emerged as a beacon of hope for Nigeria’s financial landscape, raising €1.879 billion from the international market to drive industrial growth, green economy, business growth and sustainable development, EKUNDAYO OLASUNKANMI writes.

Although 2024 was marked by significant economic and social challenges, the Bank of Industry (BOI) defied the odds and ended the year on a high note, achieving a remarkable milestone that has set a new standard for development financing in Africa.

As many institutions grappled with economic instability and operational hurdles, the BoI raised €1.879 billion from international financial markets, marking the largest capital mobilization in its 65-year history and the most substantial by any African development financial institution (DFI). Established in 1959, the bank evolved from the Investment Company of Nigeria (ICON) to the Nigerian Industrial Development Bank (NIDB) in 1964, before becoming BoI in 2001.

Since then, it has played a pivotal role in driving Nigeria’s industrial growth, fostering innovation, supporting micro, small, and medium enterprises (MSMEs) and contributing to the country’s socioeconomic development.

In 2015, the bank expanded its national footprint with offices in eight states and now boasts a presence in 33 states. The €1.879 billion raised further solidifies the BoI’s role in boosting its capacity to bridge Nigeria’s developmental financing gap.

Nigeria faces several financing gaps, including those for infrastructure, sustainable development, and micro, small, and medium-sized enterprises (MSMEs), which contribute to the high cost of doing business in the country.

The country’s financing gap for sustainable development goals (SDGs) is estimated at $10 billion yearly, with the COVID-19 pandemic and other economic challenges increasing the financial requirements needed to achieve the SDGs.

The infrastructure financing gap in Nigeria is pegged at $100 billion, yet the 2025 budget allocated only $875 million for capital expenditure on infrastructure, a far cry from the required amount.

MSMEs are critical to the economy, contributing over 40 per cent of the country’s Gross Domestic Product (GDP) and providing about 90 per cent of jobs. As a result, the African Development Bank (AfDB) estimates that Nigeria needs $160 billion to meet the funding demands of its MSMEs.
In response, the BoI aims to use the €1.879 billion it raised to address several critical areas, including bridging the development financing gap, implementing the 2025-2027 strategy, risk mitigation, and promoting green financing.

Boosting development, social impact
The raised funds will significantly increase developmental impact and play a crucial role in addressing Nigeria’s most pressing economic challenges, improving the country’s competitiveness.

A key focus will be bridging the current yearly development financing gap of over $35 billion to support infrastructure, MSMEs and vital sectors such as agriculture, youth entrepreneurship, and Environmental, Social, and Governance (ESG) and other sustainability initiatives.
Additionally, the funds will strengthen BOI’s risk management framework, enabling more accurate assessments of credit, liquidity, market risks, and overall operational resilience thereby providing enhanced financing for gender equality, climate action, the digital economy, and industrial growth.
Furthermore, the funds will address green financing, especially as BoI, which is the newly designated Direct Access Entity by the Nigeria Climate Change Commission, will channel resources into climate-focused initiatives.

President Bola Tinubu, in his New Year message, highlighted BOI’s role as one of the major promoters of the National Credit Guarantee Company (NCGC).
The company, expected to begin operations by the end of the second quarter of 2025, is a collaborative effort between various government institutions, private sector entities, and multilateral organisations.

Tinubu explained that this collaboration will foster greater confidence in Nigeria’s financial system, expand credit access, and support underserved demographics such as women and youth, ultimately contributing to economic growth and improving living standards across the nation.

The Managing Director/Chief Executive Officer of BoI, Dr Olasupo Olusi said this development will allow the bank to deploy its vast resources more securely by sharing risks with NCGC. “Having BoI loans, particularly those to MSMEs, guaranteed under the new scheme will enable the bank to safely disburse more loans to Nigeria’s private sector,” he stated.

Olusi, stated that the funding will facilitate access to low-interest, long-tenured loans for Nigeria’s growing private sector, aligning with President Bola Tinubu’s vision for economic growth.

“This funding will better position the bank to achieve the Tinubu administration’s plan for 2025 to lower food inflation and the prices of essential medical supplies by increasing industrial production and productivity. These will help to tackle food insecurity and improve healthy living.” Olusi emphasised that the bank’s expanded balance sheet will enhance its capacity to deliver on its mandate, bridge the financing gap, and support the 2025-2027 strategy.

Strengthening investors’ confidence
Recognised for its sound management, the BOI has consistently maintained investment-grade ratings from Fitch and Moody’s since 2015, reinforcing its reputation as one of Nigeria’s best-managed government institutions. The bank’s success in raising over $5 billion from international markets further underscores BoI’s pivotal role in strengthening Nigeria’s economy.

The €1.879 billion raised also reflects global confidence in BOI’s mandate to catalyse industrial and economic transformation in Nigeria and highlights its growing appeal to investors from emerging markets.

The fund syndication attracted interest from a diverse pool of international institutions across various countries, drawing in more than 10 new international investors, particularly from the Middle East and Asia. This newly raised funding is set to significantly expand the bank’s balance sheet, increasing it by N3.3 trillion to reach a projected total of N7.1 trillion by the end of December 2024, up from N3.9 trillion in 2023.

Supported by a dual-layer guarantee structure involving the Africa Finance Corporation (AFC) and the Central Bank of Nigeria (CBN), the transaction was oversubscribed by 187.9 percent and achieved unprecedentedly favourable terms, saving Nigeria approximately 3.6 per cent yearly or N295.7 billion, over its three-year tenor.

The Bank says this robust engagement underscores its reputation as a trusted partner in Nigeria’s industrialization efforts and reflects its growing appeal to investors from emerging markets. She noted that the support from AFC and CBN enabled BoI to secure significantly lower interest rates than those typically associated with Nigerian debt instruments.

Financial analysts have also emphasised that BOI’s ability to raise €1.879 billion in 2024 is a testament to the quality of its financials.
BOI has strategically positioned itself to better fulfill its mandate through key initiatives, such as increasing its authorized share capital to N250 billion in 2007 and later to N500 billion in 2023.

These moves have significantly enhanced its capacity to drive Nigeria’s economic growth.
Over the past decade, BOI has disbursed over N1.6 trillion in loans, supported millions of MSMEs, and created more than nine million jobs.
A major achievement for the bank was in 2014 when it engaged over 100 SME consultants and formed strategic alliances with 10 SME-friendly commercial banks.

Today, BoI boasts more than 300 business development service providers nationwide, supporting financial inclusion and job creation. Strategic partnerships have further expanded BOI’s impact, including appointment as the executing agency of the Federal Government’s N200 billion Intervention Fund.
As part of this, BOI is currently disbursing N75 billion to the manufacturing sector and supports MSMEs.

BOI has also reaffirmed its commitment to empowering women
entrepreneurs by allocating at least 15 per cent of its risk assets to women- owned or women-led businesses. Over 833 such businesses have been financed, with N99 billion disbursed to overcome barriers women face in accessing finance.

The Women Entrepreneurs Finance (We-Fi) programme is one of BoI’s key initiatives to dismantle these barriers. Additionally, BoI signed a $50 million portfolio guarantee agreement with the African Guarantee Fund (AGF) to support the Affirmative Finance Action for Women in Africa (AFAWA) program.

Olusi emphasised the bank’s commitment to gender equality and financial inclusion, aligning its initiatives with President Bola Tinubu’s Renewed Hope Agenda.

“We have impacted the lives of countless Nigerians by supporting businesses, promoting job creation, and facilitating inclusive economic growth. By prioritising women-owned businesses and environmentally sustainable enterprises, we are saying that women must not just participate in Nigeria’s economic story, they must lead it,” he said.

BOI’s achievements extend beyond the €1.879 billion raise as the bank has been a trailblazer in innovative financing, green projects and gender focused initiatives.

The bank’s 2024 initiatives reflect a strong commitment to inclusive growth, with a particular focus on gender, climate, youth, skills development, the digital economy and infrastructure.
One notable initiative is the Rural Area Program on Investment for Development (RAPID), launched to promote financial inclusion for women and youth in rural areas.

Additionally, BoI has introduced climate-focused initiatives, reinforcing its commitment to sustainable development. As a Direct Access Entity nominated by the Nigeria Climate Change Commission, BOI is now positioned to access financing for climate projects. Olusi emphasised BoI’s broader efforts to integrate sustainability into its financing models.

“We are saying that sustainable, climate-conscious practices are not optional – they are imperative. This is not just about the numbers, it’s about the people, the dreams and the communities that will benefit,” Olusi added.