Godwin Emefiele |
The
CBN Governor, Godwin Emefiele, who
disclosed the plan for the resuscitation of the facility during a recent
meeting with non-oil exporters and producers, said the government decided to
step up the development intervention to boost exports that are of great value
in the non-oil sector of the economy.
Under the new arrangement, NEXIM bank will work with the CBN development
finance department and the Governor’s adviser on agriculture to put a framework
in place for the disbursal of the loan. Some of the non-oil exports that will
benefit from the loan and direct intervention funding are cocoa, cashew nuts, palm produce, sesame seeds, solid minerals and rubber.
Any
initiative targeted at reviving the non-oil sector of the economy should be
encouraged and supported with reasonable funding. According to the National
Bureau of Statistics (NBS), Nigeria, in 2015, recorded the lowest exports in
three years. The value of exports, the bureau said, declined from N16.304bn in
2014 to N9.729bn in the fourth quarter of 2015, representing a decline of 40.3
percent. Recently, the Nigerian Export
Promotion Council (NEPC) stressed the need to scale up non-oil exports so
that the country can compete favourably in the global market.
When
the CBN launched the N500bn non-oil Export Stimulation Fund (ESF) two years
ago, it disclosed that the purpose of the fund was to provide concessionary
finance to non-oil exporters, provide long-term funds at single- digit interest
rates, assist export productivity and create more jobs. Other objectives of the
fund included the expansion of the diversification programme of the government,
especially in the area of non-oil exports for sustainable economic development.
It was also to broaden the scope of export financing instruments.
It is
good news that a guideline has been released for the operation of the fund.
Under it, the CBN will invest in a N500bn debenture to be issued by NEXIM Bank
in line with Section 31 of the CBN Act. In effect, this makes the apex bank the
sole investor, having invested half a trillion naira for the purpose of funding
non-oil exports. It also gives the CBN the power to determine the lending limit
and application rates, as well as the review of the operating guideline as may
be deemed necessary. On its part, NEXIM
Bank will be the managing agent in charge of the day-to-day management and
administration of the fund, but it will render periodic returns to the CBN. We
hope that access to this fund will not be made difficult for eligible non-oil
exporters. All encumbrances that could unreasonably block access to the fund
should be removed. The guideline says that eligible exporters should liaise
with commercial banks and Development Finance Institutions (DFIs).
We
welcome the condition that the fund is only available to export-oriented
companies duly registered in Nigeria with verifiable export offtake contract
agreements with importers overseas. In addition, such companies must have satisfactory
credit reports. Any company already indebted to the Assets Management
Corporation of Nigeria (AMCON) may also be eligible for the loan but with
special clearance of the CBN. This is also a good idea because many insolvent
companies are piling up debts by looking for loopholes in financial
institutions with liberal lending policies.
It is also good that the CBN has said that
eligible transactions must cover export of goods wholly or partly processed or
manufactured in Nigeria, and export of commodities and services which are
permissible and excluded under existing export prohibition list, import of
plant and machinery, spare parts and packaging materials required for export
oriented production that cannot be produced locally, as well as export value
chain support services such as transportation, warehousing and quality
assurance infrastructure, modernisation and technology upgrade of non-oil
export industries. These will be a boost to big time local manufacturers looking
for incentives in the export, import market.
They
should, therefore, take advantage of this opportunity provided by the CBN,
especially since the facility comes under both short-term and medium-term
categories, with repayment period spread starting every 90 days for short-term
borrowers, and over a ten-year period, with a two-year moratorium, inclusive of
interest rate of nine percent for medium-term borrowers. The amount available
to each borrower will not exceed 70 percent of the total cost of the project or
transaction.
At no
time has diversification of the economy become more expedient than now. The
recent uncertainty in the international oil market has not only significantly
reduced the revenue accruing to the government; it has also adversely affected
development in other critical sectors. Therefore, reviving non-oil exports
should begin with full speed and utmost commitment. Nigeria is endowed with non-oil exports like
cocoa, rubber, palm produce, sesame seeds and solid minerals that are yet to be
harnessed and exploited for exports. Proper management of the facility and
ensuring that only the intended persons access the funds will help to achieve
the targets of the funds. (SUN)
Have you heard this? Many Nigerian exporters have been defrauded of
huge amount of money in the process of exporting commodities to foreign
countries. Do you know why? They were not trained on export operations,
management, documentations and the best methods of payment in export trade.
This is terrible!!! Nigerians cannot continue to lose money to foreigners in
the course of export business. Exporters, why don’t you get a practical manual
that teaches the stages of export trade from processing and packaging of
commodities to receipt of payment by the foreign buyers. It teaches export
operations, export management, export documentations and methods of payment in
export trade? It is a contemporary step-by-step guide to export trade. It tells
all the contemporary dynamics in export trade. To get it, click on the link
below:
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