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Nigerian banks invest N90 billion in African Finance Corporation
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BANKS in Nigeria have made a commitment to invest over $700 million (N90.3 billion) in the proposed African Finance Corporation which is scheduled to be launched in April this year. The Governor of the Central Bank of Nigeria, Professor Charles Soludo, made this known at a Lagos investors' forum where the business plans and prospects of the AFC was unveiled.
He said that a bill geared towards making 5 per cent of Nigeria's external reserves available for lending to investment banks like the AFC is now before the National Assembly for the necessary approval. "We have commenced a private placement of $1 billion for the AFC and the offer is $1 per share. Already, we have $700 million commitment from our local banks.
If we have enough external reserves to finance up to 24 months imports, the provision will allow the CBN to lend up to 5 per cent of it to investment banks like the AFC for on-lending to finance infrastructure. At the rate our external reserves are growing, it is expected that between $2 billion to $3 billion would be available for the AFC."
The CBN is expected to invest up to $500 million in the AFC to leap-frog its establishment and thereafter scale down its holdings. The $1 billion ordinary shares of $1 each being raised will serve as the initial share capital of the AFC. About six months after the management has been put in place, AFC is expected to go out to raise more funds.
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