Lotus Bank looks to $1 billion IsDB facility to bridge infrastructure gap in Nigeria

The Islamic Development Bank (IsDB) could avail the sum of $1 billion to Lotus Bank to back its bid to provide funds that could help plug Nigeria’s infrastructure gap, Kafilat Araoye, the chief executive of the Lagos-based non-interest bank, said.

The capital support funding facility could help spur growth in the key sectors of the economy, Mrs Araoye said at the 2024 IsDB Group Annual Meetings in Riyadh, Saudi Arabia’s commercial capital.

IsDB, a multilateral development finance bank, comprises 57 shareholding member countries, including Nigeria, and boasts $182 billion in total approvals to finance over 12,000 development projects since its inception in 1975.

“It will put infrastructure and businesses in place, and it will reduce the pressure on the Naira because we will generate foreign exchange from some of the things we will use the money for. What we require is monitoring,” the Lotus Bank CEO said.

The facility could boost foreign exchange inflow into Nigeria, where dollar liquidity is running dry as the government strives to attract investments abroad and the official foreign exchange market struggles to get dollar supply from the central bank.

The local currency has lost much ground to the US dollar after a devaluation in January caused it to shed 43 per cent. The US currency was exchanged for N1,354 at market close on Monday at the Lagos-based FMDQ Securities Exchange compared to N871 on 18 January.

Currently, Nigeria’s gross dollar reserves stand at $32 billion, representing a 29 per cent slide in five years.

“When you invest money in Sukuk fund, all you are saying is that you are partnering in the project, which is monitored from beginning to the end and what the money will be used for. So, the fund is helping us to have infrastructure that we didn’t have in Nigeria before,” said the Lotus Bank CEO.

READ ALSO: Why we raided Enugu community – Police

She stated that her bank is aiming to build trust with the IsDB with a view to identifying bankable projects that could be funded to spur economic development in the country.

“The Islamic Development Bank is into oil and gas. We have lithium; we need to start mining, lithium and selling. In terms of the capital funding support, there are three broad areas,” she said.

“Then, there is also the side that has to do with reducing the pressure on foreign exchange, to generating foreign exchange, the export side of the businesses (export mining) and commodity generally. Nigeria needs investment in transportation including rail lines and roadsria to ease economic activities within the country, she added.