Olusi: Nigeria Must Mobilise Domestic Funds for Development, Reduce Reliance on Foreign Capital

• Declares domestic capital key for infrastructure, industrialisation, $1tn economy

• Oyedele outlines priorities to accelerate domestic capital mobilisation

James Emejo in Abuja 

Managing Director/Chief Executive, Bank of Industry (BoI), Dr. Olasupo Olusi, has declared that the country must urgently shift from excessive dependence on foreign development finance and begin mobilising domestic capital on a much larger scale to fund its economic transformation.

Olusi said the era when countries relied heavily on long-term international development financing is steadily fading.

He spoke while addressing participants at the 6th Annual Conference and General Assembly of the Association of Nigerian Development Finance Institutions (ANDFI), with the theme, “Unlocking Domestic Capital for Development Financing” in Abuja over the weekend.

He said it was imperative for the country to build a stronger domestic financing architecture capable of supporting infrastructure development, industrialisation, agriculture, housing, manufacturing, and micro, small and medium enterprises (MSMEs).

ANDFI provudes policymakers, development finance institutions, multilateral agencies and financial sector leaders the platformto discuss strategies for financing Nigeria’s development agenda.

Olusi, who also chairs ANDFI, said the conference theme reflected one of the country’s most urgent economic realities.

According to him, Nigeria can no longer afford to postpone the difficult but necessary task of mobilising local resources to finance national development.

He said, “As access to long-term global development capital becomes increasingly constrained, mobilising domestic resources is no longer simply desirable. It is essential.”

He stressed that domestic capital must now assume a much greater responsibility in financing strategic sectors that will determine Nigeria’s future competitiveness.

According to him, investments must increasingly flow into infrastructure, industrialisation, agriculture, housing, MSME development and other sectors identified under Nigeria’s long-term development strategy.

Olusi noted that development finance institutions have become more important than ever because they occupy a strategic position between government policy and private sector investment.

He said DFIs are expected not only to provide financing but also to mobilise capital, improve access to finance, strengthen businesses and catalyse inclusive economic growth.

According to him, “Development finance institutions occupy a unique position at the intersection of public policy and private enterprise. Our responsibility goes beyond lending. We must mobilise capital, expand access to finance, support businesses and catalyse sustainable economic development.”

He noted that despite increasingly difficult global financial conditions, tighter international liquidity and heightened uncertainty across global markets, Nigerian development finance institutions have continued to support national economic priorities.

According to him, DFIs have remained committed to implementing President Bola Tinubu’s Renewed Hope Agenda by financing productive sectors of the economy.

Reflecting on the progress recorded since the establishment of ANDFI, Olusi said the association had evolved into an important platform for collaboration among federal, regional and state-owned development finance institutions.

He said stronger institutional cooperation had helped members exchange ideas, deepen technical capacity and jointly address some of Nigeria’s biggest development finance challenges.

He said, “Together, we have strengthened institutional partnerships, built capacity, shared knowledge and experience, and advanced practical solutions to some of Nigeria’s most pressing development finance challenges.”

He urged members to build on those achievements by strengthening collaboration even further as Nigeria confronts widening financing needs.

He expressed concerns over the shrinking availability of concessional international funding, rising global borrowing costs and increasing competition among developing economies for scarce development finance.

Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the country’s ambition of building a $1 trillion economy would depend largely on how successfully it mobilises domestic savings rather than relying primarily on government borrowing or foreign capital.

The minister noted that domestic resources should complement foreign investment instead of replacing it.

He said, “The question is not whether capital exists. The question is how do we convert our savings into productive investments? That is the precise mission of development finance.”

According to him, Nigeria already possesses significant pools of investible capital through pension funds, insurance assets, banking sector liquidity, expanding capital markets, sovereign financial institutions, family-owned businesses and billions of dollars in annual diaspora remittances.

Oyedele stressed that these resources must be channelled into productive investments capable of creating jobs, expanding industrial output and stimulating long-term economic growth.

To achieve this, the minister outlined five strategic priorities, including developing more attractive investment products to unlock household wealth, and directing institutional funds into productive sectors.

Others he said, included expanding credit enhancement mechanisms to improve project bankability, strengthening infrastructure and green bond markets, and reforming development finance institutions to become more innovative, commercially disciplined and catalytic.

Oyedele added that ongoing macroeconomic reforms by the federal government were already improving investor confidence through stronger public finances, exchange rate stability, higher revenue generation, improving external reserves and moderating inflation.

He stated that Nigeria’s development financing architecture must integrate public finance, private finance, development finance, institutional investors and capital markets into one coordinated ecosystem capable of supporting sustained economic expansion.

In his remarks, Regional Director General, African Development Bank (AfDB) for Nigeria, Dr. Abdul Kamara, said strengthening Nigeria’s development finance institutions had become a strategic necessity for Africa’s largest economy.

He said the country would require about $2.3 trillion in cumulative investments over the next two decades to close its infrastructure deficit and meet its development targets by 2043.

Kamara said the AfDB currently channels a substantial portion of its $6.7 billion Nigeria portfolio through institutions including BoI, Bank of Agriculture (BoA), Nigeria Sovereign Investment Authority (NSIA), and commercial banks, while also supporting reforms aimed at mobilising larger pools of domestic and private capital across Africa.

On his part, Managing Director, BoA, Ayo Sotinrin, announced plans to recapitalise the institution with $1 billion under what he described as “Bank of Agriculture 2.0.”

He said the initiative would expand agricultural lending, accelerate digital transformation and deepen the bank’s national reach.

According to him, the institution has already financed more than 500,000 farmers, distributed two million bags of fertiliser, and currently serves women, youths, internally displaced persons and persons living with disabilities across 20 states and the Federal Capital Territory (FCT).

Sotinrin added that the bank is deploying 2,000 tractors to mechanise 1.2 million hectares of farmland for 1.2 million farmers, while partnering with the African Development Bank on a $200 million programme targeting smallholder farmers.

Also, acting Managing Director, Infrastructure Bank, Nasiru Isyaku, called for stronger collaboration between government, development finance institutions and private investors.

He warned that Nigeria currently faces about $100 billion annual infrastructure financing deficit, noting that private investment between 2013 and 2023 totalled only $8.4 billion, a gap he said requires innovative financing models and stronger mobilisation of long-term domestic capital.