NEXIM Bank says new facilities to improve competitiveness of Nigerian non-oil exports

23 Jun 2016
Financial Nigeria


NEXIM Bank said improved export financing for exporters will enable them to upscale and expand their businesses and improve their competiveness.

L–R: Bashir M. Wali, Acting Managing Director/CEO, NEXIM Bank; George Enyiekpon, Director, Export Development and Incentives, Nigerian Export Promotion Council; Udoo Fateh, Central Bank of Nigeria; Musi A. Braimoh, Manufacturing Association of Nigeria.

The Nigerian Export-Import Bank (NEXIM Bank) has said the new facilities it has been appointed to manage, the N500 billion Non-Oil Export Stimulation Facility (ESF) and the N50 billion Export Credit Rediscounting and Refinancing Facility (RRF), will support export-oriented companies with concessionary financing and boost the foreign exchange earnings of Africa’s largest economy.
“The ESF and RRF have come at the right time where positive steps are being taken by government towards diversifying the Nigerian economy away from oil and enhancing revenue flow to the non-oil sector as a measure to trigger export growth and economic progress,” said said Bashir M. Wali, NEXIM Bank’s Acting Managing Director/CEO, who spoke at a press briefing in Lagos on Thursday.

The facilities are designed to redress the declining export credit and reposition the non-oil sector to increase its contribution to revenue generation and economic development. NEXIM Bank said improved export financing for exporters will enable them to upscale and expand their businesses and improve their competiveness.

The CBN released the guidelines for the ESF last week, showing that the fund will be implemented via a N500 billion debenture to be issued and managed by the NEXIM Bank. The fund will provide loans worth up to N5 billion at an interest rate ranging from 7 to 9 percent.

Referring to the CBN guidelines, NEXIM Bank's Acting MD indicated that the objectives of the ESF are to, a) Improve access of exporters to concessionary finance to expand and diversify the non-oil export baskets; b) Attract new investments and encourage re-investments in value-added non-oil exports production and non-traditional exports; c) Shore up non-oil export sector productivity and create more jobs; d) Support export oriented companies to upscale and expand their export operations as well as capabilities; e) Diversify and increase the level of contribution of non-oil exports revenue towards sustainable economic development; and f) Broaden the scope of export financing instruments.

The transactions permissible for funding under the ESF include, export of goods wholly or partly processed or manufactured in Nigeria; export of commodities and services, which are permissible and excluded under existing export prohibition list; imports of plant and machinery, spare parts and packaging materials, required for export oriented production that cannot be produced locally.

Other businesses eligible under the ESF are export value chain support services such as transportation, warehousing and quality assurance infrastructure; resuscitation, expansion, modernization and technology upgrade of nonoil exports industries. Stocking facility and working capital can also qualify for funding under the ESF.

Mr. Wali said the ESF has a multiple-step approval process. The first step is a formal funding request to a local bank by a customer. The request will then be forwarded to NEXIM Bank. After due diligence by NEXIM Bank, the application is then forwarded to CBN for final approval.

The purpose of the N50 billion RRF is to create a liquidity window in support of Deposit Money Banks (DMBs) to encourage them to provide more pre- and post-shipment finance to exporters.

“The end result of the ESF and RRF is to lower the costs of Nigerian exporters so that their products can be priced at a level where they can compete with other products around the world,” Wali said at the press briefing held today at the conference hall of the Manufacturers’ Association of Nigeria (MAN).

The NEXIM Bank boss urged eligible export-oriented companies to participate in the funding scheme by submitting proposals for consideration through the financial institutions of their choice.

Participants at the press briefing were CBN officials; representatives from the Nigerian Export Promotion Council (NEPC); members of MAN; professionals in the banking sector; among others from the organised private sector as well as the media.

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