With the Nigerian economy hard hit by the coronavirus, the International Finance Corporation (IFC) has signed a loan agreement to help businesses in the country survive the fallout.

The US$100mn loan, signed with Zenith Bank, is the first investment the IFC has made in Africa as part of its global US$8bn Covid-19 fast-track financing support package, which it announced in March.

The World Bank Group member’s funding will help Zenith overcome challenges resulting from an ongoing limited access to foreign currency, working capital and trade funding.

In turn, the bank will be able to increase its support to dozens of businesses in Nigeria’s health, pharmaceuticals, food and trading sectors whose cash flows have been disrupted by the pandemic.

IFC notes in a statement that it will allow them to “strengthen operations, maintain employment, and access critical imports of goods, commodities and raw materials during these challenging economic times”.

Speaking about the deal, Ebenezer Onyeagwu, group managing director and CEO of Zenith Bank, says: “It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors.”

Eme Essien Lore, IFC country manager in Nigeria, adds: “IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from Covid-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage.”

Nigeria’s oil-dependent economy has been rocked by the impact of Covid-19 in recent months, with global demand for the commodity all but drying up as a result of government lockdown orders and travel restrictions.

The International Monetary Fund (IMF) says that it expects the Nigerian economy to contract by about 3.4% in 2020, a 6 percentage point drop on its pre-Covid-19 projections.

The African economy as a whole looks likely to be battered by the virus, with the World Bank forecasting that the continent will be rocked by its first recession in 25 years.