Lessons from International Experience in Designing the Development Bank of Nigeria

Abstract

This study summarizes the international experience that was used to lay the foundation for the design of the Development Bank of Nigeria launched by the Nigerian government in 2015. Although it has long been recognized that financing gaps in areas such as for smaller enterprises and for infrastructure programs have persisted, since the 1980s the international community has been reluctant to sponsor the establishment of new development banks. This reluctance reflects the poor postcolonial experience with development finance. The reaction to these experiences was the so-called "Washington Consensus," whereby faith was placed in the sanctity of market mechanisms. In an African context, the support provided by the World Bank and other donors in establishing a new development bank in Nigeria represents a departure from accepted wisdom and recent years' policies. This study documents the shift in policy perspectives that underlies this change in approach.