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World Bank unveils $510m deal to boost investments

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The World Bank Group, through its private sector arm, the International Finance Corporation, has completed its first securitisation transaction, marking a milestone in the global effort to channel private institutional capital into emerging markets.

In a statement sent to Saturday PUNCH, the lender disclosed that the $510m collateralised loan obligation represents the first tangible step in IFC’s broader strategy to establish an “originate-to-distribute” model for investments in developing economies.

The transaction involves repackaging IFC’s loan portfolio into rated securities, thereby creating a new asset class that meets the risk and return requirements of global institutional investors, including pension funds, insurance companies, and asset managers.

According to IFC, this approach is expected to unlock access to the world’s largest pools of capital while freeing up its balance sheet to finance additional projects across developing countries.

World Bank Group President, Ajay Banga, said the initiative underscores the institution’s ambition to mobilise private investment at scale, describing it as crucial for long-term economic transformation.

“Mobilising private investment at scale is essential to creating the jobs that give people a ladder out of poverty and begin the journey of changing a family’s trajectory for generations,” Banga said.

“This is step one in an originate-to-distribute strategy that holds significant potential to attract private capital at scale. It also frees up our balance sheet so we can support more countries and more private-sector players. The opportunity and the need are much larger, and so is our ambition.”

The deal has already attracted significant interest from investors and was listed on the London Stock Exchange. It features a $320m senior tranche purchased by private investors, a $130m mezzanine tranche insured by a consortium of credit insurers, and a $60m equity tranche.

Goldman Sachs acted as the arranger for the transaction, which is expected to serve as a scalable and replicable model for future issuances. The World Bank Group said it would continue launching regular issuances under this framework, reinforcing its commitment to building a sustainable pipeline for private-sector participation in development finance.

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The structure of the deal is designed to address two critical challenges facing development financing. Firstly, it creates a vehicle that gives institutional investors exposure to emerging market credit opportunities that are typically out of their reach. Secondly, it enables the IFC to recycle capital and expand its lending to high-impact projects in countries most in need of support.

The originate-to-distribute approach was one of the key recommendations of the Private Sector Investment Lab, an advisory body established in June 2023. The Lab was tasked with identifying barriers to private-sector investment in emerging markets and designing practical solutions.

By securitising its portfolio, the IFC is demonstrating how innovative financial instruments can bridge the gap between global investors’ appetite for yield and the financing needs of developing nations.

Development experts note that such initiatives are vital for meeting the massive infrastructure, energy, and social investment requirements of low- and middle-income countries. With public funding and traditional aid flows proving insufficient, attracting private capital has become a cornerstone of the World Bank’s strategy under Banga’s leadership.

Analysts believe the success of this transaction will encourage similar models across other development finance institutions, setting the stage for a broader mobilisation of private capital into regions often overlooked by mainstream markets.

For the World Bank Group, this pioneering securitisation is not only a financial innovation but also a signal of its evolving role—transitioning from being just a lender to becoming a catalyst for large-scale investment flows into developing economies.

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US Government Warns American Business Executives About Investing In Nigeria

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A United States Department of State report has warned American business executives in Nigeria.

The department warned that insecurity, corruption, port inefficiencies, and regulatory uncertainty could significantly hinder investment in Nigeria.

It was reports that the department gave the warning in its 2026 Investment Climate Statements on Nigeria.

The report explained that those challenges continue to weigh on the country’s business environment despite signs of macroeconomic stability.

The department said the country’s investment landscape has been shaped by the outcomes of “painful but necessary” structural reforms introduced by the President Bola Tinubu administration.

The report said the removal of fuel subsidies and liberalisation of the foreign exchange market initially triggered significant economic volatility, although early 2026 indicators suggested some stabilisation.

However, it warned that security concerns, administrative bottlenecks and the social consequences of economic reforms remain significant considerations for foreign investors.

“The security environment is a primary variable which gives pause to potential investors,” the report said.

It noted that although attacks on oil infrastructure in the Niger Delta have decreased, oil theft and illegal bunkering persist.

In the North, the expansion of terrorist and ‘bandit’ groups continues to degrade the climate for agribusiness and mining,” the document added.

The report also raised concerns about how regulators treat foreign business executives in disputes, citing the detention of Tigran Gambaryan, a US citizen and Binance executive, for nearly eight months in 2024.

“Furthermore, the use of coercive exit bans and detentions, highlighted by the high-profile nearly eight-month detention in 2024 of U.S. citizen Binance employee Tigran Gambaryan, serves as a cautionary note for foreign executives regarding the risks of aggressive regulatory friction,” it said.

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The report said such cases could shape perceptions of Nigeria as a destination for foreign investment.

The department identified inefficiencies at Nigerian seaports as another major challenge for businesses, particularly those dependent on imports and exports.

“Port inefficiency remains a significant ‘hidden tax’ on investment,” the report said.

It noted that the Lekki Deep Seaport handled $9.6 billion in trade in 2025 and operated at 50 per cent capacity, helping to ease pressure on older facilities.

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Nigerian states’ revenues rise 93%, but education spending drops — World Bank

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The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

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He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Nigeria promotes investment without building production capacity – UNILAG don

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A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

See also  FG to give Nigerian shipowners $25m each under new shipping fund

Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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