Announcement of Six Million Road Loan to Gabon on January 8, 1969

I NTERf\Ji\TIOI\U\L ANK FOR • RECONSTRU DEVELOF'fYIEl'll- 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/9 Subject: $6 million loan to development February 12, 1969 bank in Nigeria The Nigerian Industrial Development Bank (NIDB) will receive a loan of $6 million from the World Bank to provide the foreign exchange NIDB expects to need during the next two years for the financing of private industrial enterprises in Nigeria. NIDB was organized as a privately-owned development finance company in 1.964 with technical assistance from the World Bank's affiliate, the Inter- national Finance Corporation (IFC), which also subscribed the equivalent of • nearly $1.4 million, or a quarter of NIDB's ordinary share capital. Since then NIDB has m&de a notable contribution to the development of new industries in Nigeria. IU clients, which have received loans and investments amount- ing to the equivalent of about $10.3 million are producing textiles, metal, rubber and paper products, food and b,everages, furniture, radios, paint, footwear, ceramics and sugar. It is estimated that their projects have added about 7,000 new jobs or 102. of total employment in the industrial sector. NIDB's business grew rapidly in its first two years of operation but then dropped off, reflecting the general slow-down in economic devel,opment resulting from the civil dist~rbances in Nigeria. The long-term growth prospects of the Nigert,Jn economy are favorable. I-ts large ·internal market i. offers a good base ~()r further industrial growth and eco11omies of ·scale in /more Bank P.R. No. 69/9 - Nigeria-NIDB manufacturing-opera~lons. -. 2 - An e~pansion of NIDB's operations in the next few years depends largely on its ability to make commitments in foreign exchange • which is now in short supply and likely to remain so for some time. NIDB has recently been receiving an increasing flow of loan applications and now has under active consideration a number of projects requiring some $3 mil- lion· of foreign exchange financing. All of NIDB's resources are in Nigerian currency~ At June 30, 1968 these resources amounted to the equivalent of US$15.57 million (IIN 5.56 mil- lion) made up of paid-in capital of $6.3 million, Nigeria Government loans of $8.4 million, and $870,000 of reserves and retained earnings. The last tranche of· a Government loan to NIDB, amounting to $2.8 million, will be mad~ • available in the first half of 1969. The Bank Joan will provide the foreign exchange NIDB expects to need to complement its local currency resources through 1970. The loan to the Nigerian Industrial Development Bank will be guaranteed by the Federal Republic of Nigeria. Interest will be at the rate of "6-1/21 per annum. Repayment of the loan to the World Bank will conform approxi- mately to repayments received by NIDB on its own sub-loans from Bank funds, which will not normally extend for periods beyond 15 years. - 0 - •