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Nigeria’s Financial Markets Get Boost from UK-Aid through FSD Africa
Emma Okonji
Nigeria’s financial markets have received boost through a series of announcements made by Financial Sector Deepening (FSD) Africa, a specialist development agency working to strengthen financial markets across sub-Saharan Africa.
The announcements were made as part of a two-week trip led by senior leaders from the UK-Aid funded agency in collaboration with partners.
These included the Lagos State Government, the National Insurance Commission (NAICOM) of Nigeria, Infracredit, FMDQ, the UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI), and BFA Global.
“From progress in implementing green bonds to opportunities for the local pension sector and solutions to help the country’s insurance industry respond to climate change, the initiatives will enhance the strength and health of Nigeria’s financial markets, building the foundations for a stronger more resilient national economy,” the statement added.
The announcements included the meeting with Lagos State Governor, Babajide Sanwo-Olu, to review progress of the Lagos State Green Bond Issuance and other sustainability-linked debt securities towards achieving the global Sustainable Development Goals (SDGs) and support infrastructure and social development for Lagos State.
It also includes R3Lab implemented in collaboration with NAICOM and UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI) to improve the effectiveness of regulation in the insurance sector.
The initiative would deliver capacity-building and exchange programmes, learning resources, and forums for insurance supervisors.
R3Lab is being implemented across the continent.
Other initiatives include the Fintech X Climate Resilience Startup Challenge, which is an initiative to shine a spotlight on innovative solutions to build climate resilience. Local start-up, Soso Care a micro mobile health insurance startup enabling people to pay health insurance with recyclable waste was awarded $5, 000, as part of the challenge. D-Olivette, which provides a decentralised energy solution for rural, off-grid, and agrarian communities; Salubata, which creates bespoke shoes from recycled plastic waste; and Foodlocker, which provides a platform to link smallholder farmers with markets, were the other finalists.
Speaking during the two weeks visit, the CEO of FSD Africa, Mark Napier, said: “As Africa’s largest economy and country in terms of population, stronger more robust financial markets are critical for Nigeria’s growth and prosperity. FSD Africa remains a committed partner for strengthening Nigeria’s financial market, and we are thankful to our partners for their continued efforts and collaboration to unlock new pathways to prosperity and resilience for Nigerians.”
Deputy High Commissioner, UK High Commission in Nigeria, Ben Llewellyn-Jones, said: “Nigeria’s incredible capacity for innovation and entrepreneurship is powering a new era of economic growth that, with the right ingredients, can bring wealth and stability to more Nigerians than ever before. I’m incredibly proud that, through the work of organisations like FSD Africa and its partners, the UK government is helping get those ingredients in place. Core to everything, are effective financial markets, with the capacity to help scale-up businesses, insure against unforeseen risks, and energize the emergence of a sustainable economy.”
Commissioner for Insurance/CEO National Insurance Commission (NAICOM), Mr. Thomas Olorundare Sunday, said: “We recognise the role of a thriving insurance sector in supporting steady economic growth. Through the initiatives announced today, I have confidence that Nigeria will be a regional leader in providing innovative insurance products and distribution channels, enabling wider insurance coverage across the country.”
On his part, the Chief Executive Officer of InfraCredit, Chinua Azubike, said: “To date, InfraCredit’s guarantees have enabled the issuance of up to $200 million (NGN Equivalent) of local currency infrastructure bonds, however an increasing pipeline of climate-aligned infrastructure projects are constrained by limited financial resources being dedicated to deliver well-structured projects that can access the debt capital markets, thus, our collaboration with FSD Africa through technical assistance support will also involve the design of an innovative financial solution that will catalyse more bankable climate-smart infrastructure projects for InfraCredit’s guarantees which will accelerate the issuance of credit worthy local currency infrastructure bonds to domestic institutional investors, thereby deepening the debt capital markets in Nigeria.”
