Respite for Nigerians as IFC, Zenith Bank approve $100m support for businesses affected by COVID-19 pandemic

There seems to be respite coming the way of Nigerians after a member of the World Bank Group, International Finance Corporation (IFC) on Wednesday announced an investment of up to $100 million in Zenith Bank Plc to help it increase support to clients and companies whose cash flows have been disrupted by challenges caused by the COVID-19 pandemic.

According to reports IFC’s loan to Zenith Bank is its first investment in Africa through its COVID-19 fast-track financing support package. The funding will help Zenith, an existing IFC client and Africa’s sixth largest bank, overcome challenges resulting from ongoing, limited access to foreign currency, working capital, and trade funding.

Recall that since the outbreak of the pandemic early this year, Nigerian businesses (particularly the struggling Micro, Small, and Medium Enterprises, MSMEs) have been worst hit with majority knocked out of business entirely. Companies that did not close down have either down sized or slashed workers’ pay. This has further affected the plight of ordinary Nigerians, many of whom now depend on alms for survival.

However, this sad tale is about to take a positive turn around with IFC’s loan to Zenith Bank.  Businesses across health, pharmaceuticals, food, and trading sectors can benefit from the loan allowing them to strengthen operations, maintain employment, and access critical imports of goods, commodities, and raw materials during these challenging economic times.  

Confirming the development, the Group Managing Director/CEO of Zenith Bank, Ebenezer Onyeagwu said: “IFC’s support is essential and will help us respond to challenges resulting from the COVID-19 pandemic. It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors. Our partnership with IFC is strong and we are committed to its environmental, social, and governance (ESG) requirements.”

IFC’s loan to Zenith is part of its $8 billion global fast-track financing package, announced in March to support business activity and preserve jobs in the face of COVID-19. Close to 300 clients have requested support globally.

The closure of borders, shutting of businesses, and reduced global trade related to COVID-19 are affecting Nigeria’s economy and others across Africa, with the World Bank predicting Africa’s first recession in 25 years.  

Eme Essien Lore, IFC Country Manager in Nigeria, said, “IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from COVID-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage.”