While
the economy was in the doldrums, the Central
Bank of Nigeria (CBN) introduced a N500
billion Non-Oil Export Stimulation Facility (NESF) loan facility as
lifeline to the non-oil segment of the economy. The aim was to stimulate
production of locally manufactured products for export, diversify revenue base
of the economy, attract new investments and encourage reinvestments in
value-added nonoil exports production and nontraditional exports and expedite
the growth and development of the sector.
“The Facility will help redress the declining export financing and
reposition the sector to increase its contribution to economic development,” the bank said in a
guideline to operating the loan facility. The debenture is issued by the Nigerian Export-Import (NEXIM) Bank. It
is a single digit loan. There are of course requirements to qualify to access
the funds. This include that the applying company must be duly incorporated in
Nigeria under the Companies and Allied Matters Act, with verifiable export
off-take contract(s) and satisfactory credit reports from at least two Credit
Bureau in line with the provisions of CBN Circular BSD/ DIR/GEN/CIR/04/014
dated April 30, 2010. The banks also have the guidelines.
“Exporter wishing to access ESF applies to the bank by executing the
application form and complying with its terms and conditions. The PFI reviews
application to assess eligibility under ESF and viability for the applicants
project/business. The PFI submits ESF loan application on behalf of eligible
export-oriented enterprise to NEXIM. NEXIM reviews and submits the appraised
ESF application to CBN for reviews and approval/decline,” the CBN said in a circular
on its website.
Curiously,
there have been reports of many operators in the sub-sector expressing concerns
over the process for accessing the loans which they describe as too cumbersome.
Many of the affected exporters say it is almost impossible for them to obtain
the long-term concessionary loans. Part of their complaints is that they are
being frustrated with stringent conditions that make it literarily difficult
for most of them to access the loan.
One of
them who wouldn’t want to be name because of fear that he could be exempted by
the authorities if his name is mentioned in print says “This
is very, very frustrating. They keep pushing you back and forth. I have been
processing my application through my bank for almost 3-months now. I’m forced
to now think that government does not actually want to give us the loans.”
Our
correspondent gathered reliably that so far, only N20 billion of the special fund has been disbursed between 2016
when it was first launched. Spokesman of the central bank, Mr. Isaac Okorafor confirmed this. How is the disbursement done? CBN notifies NEXIM
of its approval/decline, NEXIM advises approval/rejection of application to
PFI. Upon approval by CBN, NEXIM advises PFI and the fund is made available to
PFI under advice to NEXIM. The loan is then disbursed to the customer within
three working days of receipt of funds from CBN. Repayment from customer
(principal and interest) is remitted to CBN on quarterly basis along with
appropriate returns/reports.
However,
many of the applicants whose applications have not yet got the anticipated
approval said they do not know exactly what is wrong with the process. Some are
pointing accusing fingers at the deposit money banks which they accused of
insincerity and sharp practices. On the other hand, others put the blame on the
central bank and the approving NEXIM Bank. Those who belong to this league say
the CBN intervention has been reduced to mere rhetoric and not more paper
statements.
But Mr.
Okorafor said: “This is not an all-comers thing. It’s
open to every Nigerian business person who is engaged in the exportation of
goods. But people can’t just come and want to take money and go away. You must
meet the criteria. People who complain are those political exporters that want
to access the money and go away without doing anything. The banks must be
convinced because they take the risks. The banks must be convinced that this
person is engaged in the production of (or) exportable commodity.”
Okorafor
said to qualify, one must be an established exporter; and must have a business
running noting, “You must have importers in other
countries who import your items. There has to be evidence to ensure that you
are doing that. What you are exporting must be things that are produced in
Nigeria – raw materials, add value and then export.”
What
measures have been put in place to ensure that the process is at least easy for
the exporters to access the facility? Okorafor said, “We
have provided the funds, we have sensitized exporters and we continue to
sensitise them. We have asked the banks to apply. But like I said, every person
accessing that facility must have a business that is engaged in export.” (LEADERSHIP)
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