Nigeria Strategises to Boost FDI with $5 Billion African Energy Bank

Nigeria is positioning itself to host the headquarters of the $5 billion Africa Energy Bank (AEB), aiming to leverage this move to attract sustainable Foreign Direct Investments (FDI) and reshape its oil and gas ecosystem. Nicholas Agbo Ella, the Permanent Secretary at the Ministry of Petroleum Resources, revealed the government’s optimism regarding the potential benefits of hosting the AEB in Nigeria.

The technical inspection team from the African Petroleum Producers Organisation (APPO) and Afrexim Bank, joint promoters for the establishment of the AEB, recently concluded their mission to assess Nigeria’s readiness to host the bank’s headquarters, slated to be established in July 2024. President Bola Ahmed Tinubu has approved a $100 million investment from four agencies of the Ministry of Petroleum Resources, surpassing the minimum equity requirement for class A shares.

Agbo highlighted the transformative impact of the AEB’s establishment in Nigeria, projecting it to be the largest single foreign direct investment inflow into the country in over two decades. The AEB is expected to significantly contribute to Nigeria’s Gross Domestic Product (GDP), employment, financial architecture, and economic diversification while bolstering foreign exchange management strategies.

Upon its establishment, the AEB aims to become the third-largest bank in Africa and the most prominent bank in Nigeria in terms of shareholders’ funds. It is projected to grow its assets to over $120 billion in seven years, serving as a sustainable source of FDI aligned with Nigeria’s Vision 2030 ambitions.

The bank’s establishment in Nigeria is anticipated to catalyse development, exploration, and investment initiatives in the petroleum sector, driving growth in independent petroleum producers, commercial service providers, legal and local content drivers, and technology and skills development.

With Nigeria, Ghana, Benin, and Algeria advancing to the final bidding round, competition is fierce among these countries vying to host the AEB, which will finance Africa’s hydrocarbon deposits and support energy transition and net zero 2060 commitments. Nigeria’s proactive measures, including securing a temporary headquarters in Abuja and initiating the process for the permanent headquarters, underscore its commitment to attracting investments and driving economic growth through the AEB initiative.