The Nation Newspaper

Tag: NEXIM

  • NEXIM BANK within Africa Regional Economic Renaissance

    NEXIM BANK within Africa Regional Economic Renaissance

    OSTURING: it is a period of renaissance for Nigeria’s economy and indeed the economic development of African region. At the turn of the millennium, it seem as though, some form of cosmic force sparked-off to energize what some analysts describe as a natural crave for change within Africa’s economic environment. Perhaps the spark could be attributed to persistent hunger growing in dimension, or increase in awareness among the people, but towhatever the reasons could be, CHANGE is evolving.

    A truth: Crave for economic development and the manifestation of CHANGE in the economic space is total across Africa. Equally interesting, the force propelling this evolution is cohesive. More Africans are becoming literate and educated in line with global standard, creativity and competitiveness is gradually manifesting among a slow but steadily growing population of men and women in Africa, equipped for high standard training. Add to that, political leadership is gradually experiencing business-minded policy development procedures, capable of instigating measurable economic gains.

    Sadly, however, the CHANGE we are experiencing is still within the traditional frame-work of base economic engagement. In the face of global economic advancement based on technological advancement, super-sonic human capital equipment, aggressive innovativeness, economic diversification, and regional alignment, Africa’s persistent reliance on commodity trading means little within the ambit of global competitiveness. The CHANGE we experience in Africa cannot be described as enduring and impactful.

    The other worry is that as a result of the basic nature of our economic engagement, African resources are open to exploitation by the technologically superior economies. So, the explorative tendencies of developed economies and the emerging markets, drive deeper, the weakening power of nations within the African region. According to World Bank’s World Economic Indicators for 2012, since the turn of the century, Africa’s aggregate economic growth has recorded about 120-150% increase. Sadly, however, this recorded growth is insignificant in global rating. In the first place, in juxtaposition with other growing economies such as East Asia, Africa’s progress so far is a joke. Secondly, the registered growth for Africa is only as a result of boom in commodity trading.

    While, as at 2010, Africa represents 2.73% of total world output, East-Asia is posted 20.69%. In the area of total world export, Africa’s showing was put at 3.33%, while East Asia posted 17.8%, same period. In the calculation of GDP per Capita (US $), Africa, as at 2010 was recorded at 1,701, while East Asia was on 8,483.

    Without driving Africa’s ambition too far, the above record paints a picture of a region in dire need for economic re-engineering. Some African Nations have connected with this need for meaningful economic development, to drive paradigm shift, for actualization of sustainable economic growth and development. Nigeria has made some good showing in the establishment of economic structures with potentials to stimulate and propel inherent potentials towards productivity and gainful engagement.

    The hope, however, is that Africa is united towards driving for CHANGE. At the close the 50th Anniversary of the African Union, there was a need for African leaders to quicken themselves in the resolve towards implementation of AU 10-yr development strategy, which objectives are (1) regional economic integration, (2) infrastructure financing, (3) skill & technology development (4) private sector development, (5) governance and accountability. In agreement, African nations, can, through a concerted effort, drive the change process towards actualization. This cohesive push should see Africa through.

    Nigeria’s contribution towards this all-inclusive regional economic development is very important, for reasons of its potentials. Besides her population and oil resource, the vast untapped solid mineral deposits, the growing creativity of her youth and the hunger for industrialization among her youth population all add up to challenge her to action. To us at MC&A DIGEST , Nigerian Export-Import Bank (NEXIM Bank) serves to propel Nigeria towards playing its crucial role in both Nigeria’s industrialization and economic development on the one hand, and the nation’s meaningful contribution towards the economic development of the African region. By reason of its mandate and engagement, NEXIM bank is directly aligned with the national and regional economic growth strategic focus.

    Among her present engagements is diversification of the nation’s economy. NEXIM’s support for investments in non-oil sector and those areas that have remained un-touched and termed too risky for commercial banks’ involvement, have all come together to open up new opportunities for Nigerians in the private sector. Principally, NEXIM Bank is championing investment in solid minerals mining. Add to that is her aggressive involvement in agriculture and processing of agricultural products for export.

    Still on diversification of the hitherto monolithic economy, NEXIM Bank is supporting the creative industry through its support of the film and home video industry. This initiative has immensely helped to stimulate growth in private sector employment and enabled foreign exchange earnings, aiding the presence of our local film products in foreign markets.

    On Private Sector Development, a lot can be drawn from the institution’s involvement listed above. In addition, NEXIM’s support for private initiatives in the area of manufacturing and industrialization (primarily for export trade) has greatly influenced development of the privatesector. A good number of private manufacturers today, came to be by reason of NEXIM’s assistance. Such success stories have given rise to employment, foreign exchange earnings and diversification of economy.

    Our position is that NEXIM Bank represents a driver for Nigeria’s participation in the economic development of the African region, her own internal economic development and her launch pad towards her relevance in global economy. Recall the economic growth strategic direction set by the AU for African region; the common front for all individual nations in Africa, which focal points are same with that of our NEXIM Bank. NEXIM Bank’s posturing as an aggressive driver of sustainable growth connects with Africa’s craved economic renaissance. It is easy to deduce Nigeria’s commitment to her national economic development and that of African region, by the establishment of NEXIM Bank.

    However, it must be noted that this commitment cannot be said to be total without adequate equipment of the new structures being established. We have also noted in an earlier edition of this page, there is a need to adequately fund the NEXIM Bank, for it to properly function and actualize its potentials. In our subsequent write up on the activities of NEXIM Bank, we shall endeavor to take a more focused look at the areas the NEXIM Bank is not adequately expressing itself, only because it does not have the funds to drive throw with such initiatives of enormous economic growth potentials.

    It becomes even more so imperative to drive Nigeria’s investment in an effective and efficient economic development institution such as the NEXIM Bank, considering its strategic position in the African region. African region appreciates the uneven spread of resources and capabilities among member-nations, and will depend on Nigeria and such other comparatively better-positioned members to champion the CHANGE or economic renaissance. If the funding policy for NEXIM Bank improves, the nation and Africa will gain more.

  • Nigeria’s global competitiveness – NEXIM as an anchor

    Nigeria’s global competitiveness – NEXIM as an anchor

    The platform for international relativity and competitiveness has since shifted from military to economic engagement. As a global trend, therefore, discerning nations have since focused on building impactful, profitable and enduring economic structures for such engagement. To wit, global rating and grading for nations are more than ever before, based on economic indices.

    As mentioned in our article last week, the position of World Economic Foruming on conomic growth and development, as the focal point for ratings in Global Competitiveness is based on the paradigm shift. MC&A DIGEST team has, in recent times, decided on concerning itself with the readiness of Nigeria for the new world order, looking from operative policies, symbolic structures and the commitment invested in ensuring the functionality, effectiveness and efficiency of such structures, starting with NIGERIAN EXPORT-IMPORT BANK, NEXIM.

    Nigeria’s (and indeed any nation’s) economic growth potentials and extent of target actualisation in the face of progressively keen global competitiveness, rests on a tripod of proper trend analysis, articulate policy development and proper, consistent, articulate and purpose-driven implementation. Last week, we mentioned the position of leadership in driving national economic growth process. It must be globally relative, strategic and in competitive. One example we keep throwing up is the trade policies of nations such as China, India, Turkey and the United States of America. These countries have driven their international economic relations to the exent of ‘direct confrontation”, using export trade as platform. So to them, the basic role of EXIM Banks no longer suffices; it has been taken to the level of proactive and aggressive marketing. So, they now compete in form that seem like ordinary BUYER- CREDIT FINANCING.

    In real sense, Buyer-Credit facility is not designed for global trade support, but to as an instrument for global economic competitiveness, for relative advantage, one versus the other. So, for instance, China will gladly push huge funds through whatever channel open to them in any country that may so request, in form of economic growth and developmen support-funding, while in real terms, the objective or interest is taking advantage of the recepient country or economy for China’s economic advantage, using the ‘support facility’ as an in-road.

    NEXIM understands the inherent disadvantage in BUYER-CREDIT FINANCING, and has positioned to structure own-facility for our local market, rather than expose our local resources with enormous export-import trade earning potentials to such exploitation. But unfortunately, NEXIM is incapacited as you read this piece, due to grossly inadequate funding. May we just put on record here that this initiative is by far a proactive and innovative structure borne out creativity which is frontal among developed nations in global economic engagement, developed by our own NEXIM, yet cannot be implemented due to non-availability of funds. Sad!

    But that is only a small fraction of the consequence of NEXIM’s financial incapacity. As shown in the pie-chart below, between 2009 to date, NEXIM has recorded appreciable results in its engagement through a careful allocation of available scarce resources in the key areas with very high economic growth potentials of our economy. Within same period, it has invested N12bn in lending to Nigerian Export manufacturers. Secondly, NEXIM has invested N6.6bn in funding agro-processing for export trade/business. Thirdly, NEXIM is pioneering the opening-up of the Solid Mineral mining sector (coming at a huge cost – having committed N2.2bn so far), based on a forecast of a sector with very higher foreig earning potentials, projected to far higher than our Oil can generate, if fully exploited.

    Fourthly, NEXIM has so far expended huge resources into activating fundamentally important infrastructures to facilitate profitable and efficient export trading in form of its SEA-LINK PROJECT. This is an initiative that has attracted collaborators across the world who have identified with the enormous benefit there-in. The big idea here is to facilitate the most efficient sea transportation of export trade commodities across the regional and global markets, for a more profitable export-import trade, among the target audience.

    We must put in perspective that the oil resource that our economy run on now is only 3rd in the rating of contributors to our GDP – after Agriculture and Trade/Commerce. Suffice, therefore, oil as a resource cannot be said to have the capacity to sustain our economy in the near-future (even if the recklessness attendant upon the present resource wastages), is curtailed. We must, therefore, strenghten our resolve to drive for a more robust support for NEXIM Banth through adequate and appropriate funding, as a nation, considering its enormous potential as a catalyst for economic growth and development.

    The thrust for Nigeria in our quest for global competitiveness and relevance should be seen as founded on proper funding of NEXIM Bank. It psitions as the potent channel for our national investment for enduring economic growth and development, as a nation. Last week, we noted poor funding as the major obstacle facing NEXIM Bank, limiting its ability to explore its potentials. Presently, it will require well over N100bn to attend to attend to applications already approved for their potentials, innovativeness and export trade potentials. In fact, our focus shifted towards NEXIM Bank as a result of the complaint of some of those applicants who are getting frustrated waiting for NEXIM’s support. These are initiatives with huge capacity to generate employment, help our collective position in global competitiveness and drive our economy growth and development, yet NEXIM cannot do anything to get them up and running because of non-availability of funds. We need to look at reviewing the capitalisation of NEXIM, if we are serious about growing our economy through export-import trade.

    The promise ahead of us all is that if NEXIM is adequately funded, Nigeria’s industrialisation process will speed-up, our economic development will get a boost, employment will rise considerably and our economy will be diversified in real sense. On the whole, Nigeria will be better positioned in the commity of nations in line with global competitiveness. As a way forward, therefore, NEXIM Bank’s present meagre N39bn paid-up share capital, needs to be reviewed upward by well over 200%. What it now ‘has’ is not comparable to the amount invested by India on a single project in Ghana.

    There is need for a rethink!

     

  • Nexim Sealink project and intra–Ecowas trade

    Nexim Sealink project and intra–Ecowas trade

    The Economic Community of West African States (ECOWAS) was established on May 28, 1975 as a regional trade organisation comprising countries in the West African sub-region. The aim o f setting up the Community was manifested in its original treaty. According to provisions set out in the treaty of Lagos, and later, the revised treaty in 1993, the objectives were to promote co-operation in economic, social and cultural activities towards a desirable establishment of an economic and monetary union through the total integration of the national economies of member-states. Inherent in the letter and spirit of the Treaty were the ideals to raise the living standards of the ‘ECO-citizen,’ maintain and enhance economic stability, foster relations among member-states and contribute to the progress and development of the African continent in line with the principal provisions of the African Economic Community (AEC) Treaty under the African Union.

    Within four years of the operationalisation of the treaty, it became clear that as laudable as it sounded, the goal of achieving total integration of national economies of the constituent countries would require more concerted effort and commitment. Hence, the 1979 Protocol relating to free movement of persons, goods, services and right of establishment was conceived as an instrument to enable free movement of ECOWAS citizens within the sub-region. Loaded into the protocol were the goals of institutionalising a single regional socioeconomic space, providing ECO citizens with opportunities in member-states, including the utilisation of arable land by indigenous agriculturists, access to coastal areas by landlocked member states, employment of English and French language experts and, most significantly, unfettered access to natural resources by member-states. In a nutshell, the Protocol was intended to create a ‘Borderless West Africa.’

    Leveraging Nigeria’s Commitment

    No other economy within the sub-region has been weighed down more than Nigeria from a disconnected West African market. Given the huge size of its population and GDP, the various Administrations in Nigeria had demonstrated ample political will to ensure the Community thrives. Indeed, the country has been the galvaniser of the ‘ECOWAS dream’ and has doggedly deployed human and material resources to keep the trade bloc together in the face of recurring political, economic, socio-cultural upheavals since the days of ECOMOG till the current intervention of its military in the Malian crisis.

    What is lacking, according to international relations experts, is for Nigeriato lead the process towards realistically breaking down the trade walls under the Free Movement Protocol and unleashing the potential of free exchanges of goods and services as have been witnessed in similar trade regimes under Association of South East Asian Nations (ASEAN) or the trilateral North American Free Trade Agreement (NAFTA).Understandably, the implementation of most of these agreements is being spearheaded by the various export credit agencies of the constituentcountries.

    Hence, it behoved Nigerian Export-Import Bank, (NEXIM Bank) – the trade policy bank of the Federal Government of Nigeria – to facilitate the process for the establishment of a dedicated sea link within the ECOWAS region.This is borne out of concernsby the current executive team of NEXIM Bank led by the MD/CEO, Mr. Roberts Orya, on the partial realisation of ECOWAS’ intra-regional trade facilitation and operational objectives, high intra-regional freight costs and shipment delays, which make cargo delivery within the sub-region to take an average of 45 – 60 days.

    At the recent sensitisation and pre-investors’ forum on the Sealink Project on Wednesday, March 27th, 2013 in Lagos,for the entire council and executive of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, (NACCIMA),Mr. Orya provided an update on the initiative and invited its membership to invest and partner with the Bank and other stakeholders in the SPV and Regional Maritime Company. He stated the Bank is facilitating the establishment of a dedicated Regional Sealink project as a means of overcoming the challenge of road infrastructure as well as absence of rail links within the region which has perpetually bedevilled intra-regional trade. The appeal for a sealink is further strengthened by the comparative low budgetary cost and short implementation timeline for a sea link-project vis-à-vis either a regional road or rail project.

    According to Mr. Orya, the availability of a maritime vessel will significantlyreduce the high transportation costs and excessive transit time which make intra-regional trade non-competitive, with West and Central African transport and logistics costs identified as one of the highest in the World. According to available statistics, these have resulted in low level intra-regional trade at less than 12% and 10% for African and ECOWAS trade respectively, compared to other regional blocs such as European Union (EU) andASEAN whose intra-regional trade flows are respectively at 50%, 40% and 25%.

    Why embrace the Sealink Project?

    Inviting the NACCIMA to invest in the project, Orya stated that the funding requirement for the regional sealink project is $60million out of which $36 million will be required to purchase vessels, equipment, office space and other infrastructure and $24 million for working capital to cover general and administrative costs to be raised through equity and debt financing respectively.

    Beyond making business sense, the project has some inherent accruable national benefits that further justify its implementation.

    These include unlocking opportunities in the maritime sector through effective indigenous participation, thereby stimulating maritime-related employment as well as localising some of the maritime freight payments of an average of $5 billion annually from import / export tonnages.

    It will also facilitate the realisation of the various Maritime-related laws like the Cabotage and MIMASA Acts and the implementation of the National Shipping Policy; stimulate and attract private sector funding for the development of key maritime infrastructure with the national benefit of improving the level of intra-regional formal trade, thereby enhancing contribution of trade/exports to GDP.

    Also, it will assist in palliating the disastrous effects of road/rail infrastructural deficit challenges that affect regional integration and a major cause of the muted growth witnessed over the years in intra-African and ECOWAS trade levels.

    Most importantly, it will enhance competitiveness of Nigerian exports, thereby improving the contribution of manufactured exports from the current level of under 6%, and enhancing local industrial capacity utilisation and attracting new investments.

    Additionally, the project will enhance Nigeria’s status as a maritime hub for West and Central Africa with attendant benefits of facilitating Atlantic short-sea trade and development of pool of talent / manpower for the industry.

    Furthermore, it has the immense potential to stimulate multimodal transport development to cater for non-littoral regional member countries;hence it will facilitate growth of hinterland haulage business as the market segment is not yet targeted by major shipping lines, thereby offering a huge opportunity to the proposed Sealink Project.

    The Transformation Agenda

    The Sealink project is in line with the Transformation Agenda of the government which projects investments in roads, railways, inland waterways, ports and airports developmentin collaboration with various stakeholders to evolve a multimodal, integrated and sustainable transport system, with emphasis on rail and waterways, through an effective Public-Private Partnership arrangement. This aims to create synergy and ensure an even and nation-wide distribution of gains from the Administration’s investments in the key sectors, termed ‘main growth drivers’ such as the manufacturing, agriculture, solid minerals, manufacturing, services, trade and commerce, etc. Affirmatively, the Sealink Project will take the gains of the Transformation Agenda beyond the shores of the country. It will immediately open up our shores and immensely contribute to Nigeria’s march to become the premier economy in Africa through creating a seamless export platform for movement of Nigeria’s manufactured/semi-processed goods, services, and personnel with a certainty to boost competitiveness and productivity across these sectors. Specifically, it will spur more private sector initiative and innovation, enhance the development of the key sectors’ value chain, create/sustain more Nigerian jobs as the ECOWAS markets become one and Nigeria’s products and services are brought to the world.

    Sponsorships/Collaborations

    The project has been endorsed by the government of Nigeria. It has also been adopted and is being sponsored by the Federation of West African Chambers of Commerce and Industry (FEWACCI) withother endorsements/collaborations by the ECOWAS Commission,the ECOWAS Parliament, various multi/bilateral institutions including theMaritime Organisation of West and Central Africa (MOWCA), strong private sector support through various trade associations and heightened expression of interest by potential investors (locally and internationally).

    In his remarks, the National President of NACCIMA, Dr. H.A.B. Ajayi, lauded Mr. Orya for the patriotic zeal which moved NEXIM Bank to come up with the Regional Sealink Project and the vigour with which he is pursuing its realisation.

    He also concurred that the ECOWAS market is huge and has not been fully tapped as a result of logistical challenges being faced in movement of goods and persons, especially due to the absence of a direct shipping line for the West and Central African corridor. In this regard, NACCIMA, as a member of the FEWACCI, will like to join forces with NEXIM Bank and other progressive entities in actualising the project. According to him, “As the apex business association in Nigeria, NACCIMA is supporting the setting up of the shipping company as we did during the establishment of ECOBANK Transnational which has become a household name in all the West African States and beyond. We would like to also stress the need for chieftains of industry here present to take ample opportunity by participating in the raising of the $36million that would form the equity capital for the setting up of the transnational shipping company.”

     

    Moghalu is Head, Corporate Communication, Nigerian Export – Import Bank

  • NEXIM BANK and other matters

    NEXIM BANK and other matters

    Modern-day political leadership is 70% about BUSINESS. Modern-State Nations are run on operating models exactly same as profit-driven/market-focused Corporate Bodies. Even at that, the BUSINESS of governance, poses more challenges because its leadership is, in addition to the objective of wealth creation, charged with the additional responsibility of governing the business environment for regular brands – including the multi-national and global players. Nation-state rulers are, in today’s world, expected to be intellectually and mentally equipped and focused on designing policies/regulations and laws that will enable profitable engagement for businesses led by the private sector initiative with potentials to drive micro and macro-economic growth – the good of the given NATION.

    Modern-day political power or leadership is no longer focused on the traditional and conventional: rule of force, by force. It is no longer about material gains for self (and group). It is old fashioned for anybody or group of persons to assume personal leadership for self-aggrandizement (I really hate using that word, because it was so badly abused during the Shagari/NPN years), because the gains are more for the modern-day political leader. He/she does not need to steal because the wealth his/her leadership bring forth enriches all, and super-broaden the personal financial and material gains of the leadership.

    What I call corporate corruption (unreasonable quest for personal wealth owing to greed from among a given leadership) propels total confusion, anarchy, criminality and societal breakdown. It also bring about self-deceit, professional compromises, unproductivity, stealing and enables a population of liars. That explains why even those that should advise the leadership by reason of their professional calling, and office, go about deceiving the leader because they also want to be so rich, they become ‘celebrities’.

    Nations are now considered brands by reason of the new trend in governance. Brands are defined offers with clear identity, driven by creativity and strength of character for competitive advantages versus competing brands at the market place, for profit. Brands are led by purposeful investors and professionals, accountable to every stakeholder, including the consumer at the market place, open to scrutiny for performance auditing. Brands exist for the common good of all and every stakeholder. Brands post profit, and will only remain in business when they keep posting profit.

    Brands live on good character, upright attributes and operate within certain regulations. They are expected to live by certain enduring values by which expectations are anticipated. As a rule, brands are honest to themselves. I am very sure the brand described above is not the type the former Information Minister had n mind when she was routing for a RE-BRANDED NIGERIA. If she were a professional brand

    Manager like we are here, she would not have taken that route in the first place. Rather, she would have been gathering men are women with the intellectual capacity of building a BRAND out of Nigeria.

    The conceptualization of economic growth and development policies as captured in Vision 2020 (and the preceding visions), through to the anticipation and establishment of structures such as our Development Fund Institutions (DFIs) – Bank of Agriculture, Bank of Industry and our Nigeria Export Import Bank (NEXIM Bank) brought a glimmer of hope for those of us who have always wished for prosperous Nigeria. When the present administration thought-up youth empowerment initiatives such as the YouWIN and the strategic interventionist SURE-P, we further strengthened our hope; hope for a nation with a largely employed youth, a Nigeria of enormous economic opportunities, a nation inching towards industrialization, a nation where human capacity is profitably engaged, a nation protected from external economic aggression, a nation positioned to take full advantage of its abundant natural resources, a nation that will begin to move from the status of a consumer (where everything we consume is imported) to that of a producer/manufacturer.

    Unfortunately, all of these initiatives and investments are just not yielding results worthy of a good report. At best, they post ‘results’ not commensurate with the investment put into them. – not one of them. We at MC&A DIGEST will soon invest in looking at the SURE-P initiative for strategic reasons.

    But we had concerned ourselves with NEXIM BANK (Nigerian Export-Import Bank). The pre-observatory hypothetical position was one of an institution with the following attributes:

    1. A strategic master-stroke with enormous potentials

    2. An institution focused on national economic growth and development

    3. An institution capable of driving the nation’s pride among comity of nations in the area of national economic growth/development, political economy as a diplomatic tool and higher rating among world development institutions.

    4. A growth-driver positioned to empower Nigerians for creativity, industrialization, entrepreneurship drive and profitable resource engagement for export trade.

    5. A launch pad for Nigeria’s industrialization

    6. A stimulant for employment generation and profitable engagement of our growing youth population

    7. An institution fully funded for its roles and set economic growth stimulation objective.

    Our findings with NEXIM Bank brought to fore the need for system appraisal. Nigeria is a country truly endowed with immense natural and human resources, with enviable growth potentials but stiffened by system not given to thoroughness and beneficial prioritization. Intellectuals committed to helping this nation grow must begin to help the system think through the confusion we are entangled in now.

    Our position is that NEXIM Bank is an institution well intentioned, peopled by dedicated professionals, focused on efficient operation, but compromised by inadequate FUNDING. Our attention was drawn to the bank by complaints from investors with export trade potentials. Prospective exporters have been frustrated from their dream and industry because their hopes were dashed. But the true position with NEXIM Bank is one of virtual inability to meet demands due to non-availability of funds. Several applications are passed after due process of pains-taking verifications and careful back-ground checks. More are still being processed, yet only a handful of fundable applications are seen through, in the face meager funds.

    EXIM (Export-Import) Banks are modern-day international institutions for global international relations, with special focus on export-import trade for national socio-economic development. The focused and growth-driven nations expend huge resources for growth and development drive through their EXIM banks, as a policy. Presently, China is aggressively engaging her nationals for advantages in countries like ours that are yet to connect with the emerging trend. So, through their EXIM banks, they fund manufacturing concerns in our economy that will directly benefit their local market (to our disadvantages) but one cannot blame them because since we have refused to fund our potentials, these more discerning nations now fund them for our own advantages. So, while our NEXIM pile up applications, countries like China provide some of these potentials the funds through agreements that will keep us perpetually importing nation (while we have our own NEXIM).

    We at MC&A DIGEST will continue our study of the working of NEXIM BANK as our contribution towards the properly focusing the nation’s economic development initiative, by investing our intellectual property, as we invite other capable and interested Nigerians to do. We shall, in our subsequent write-up on this bank, we shall do a careful articulation of the many obstacles working against the institution’s effective discharge of its functions, juxtaposing our findings with the structure and funding policy operative in similar institutions in other nations – for all to see.

    Until then, however, we leave our political leadership, the Central Bank and the Ministry of Finance with this poser: can Nigerian Export-Import Bank achieve much (considering its mandate) with its present share capital of N50bn? As at today,the United States Export-Import Bank (Ex-Im Bank) has the mission of supporting U.S. jobs through exports. It currently is operating with a lending cap of $120 billion. Under provisions of its Congressional charter the cap will gradually increase to $140 billion over the next three years as the Bank complies with certain requirements; the increase will enable the Bank to strengthen U.S. businesses and support an additional 1.3 million jobs.

     

  • NEXIM disburses N7.5b to cashew sector

    The Nigerian Export Importank (NEXIM) has disbursed $50 million (N7.5billion) to the cashew sector from 2002 to date.

    The Managing Director of the

    bank, Mr Robert Orya, disclosed this at the NEXIM and Nigerian Cashew Association of Nigeria (NCAN) Finance forum in Lagos.

    He said if the industry is well harnessed, it could generate N24 billion yeraly.

    Orya, who was represented by a Director in the bank, the Very Rev. Ifeanyi Nwade, said the cashew industry has implications for increased export revenue, development of the industry and increased job creation in line with the transformation agenda of the Federal Government.

    He said the industry has continued to operate below its potential. This, according to him, is as a result of problems ranging from low yielding plantations to inadequate processing facilities and low level of access to finance.

    He noted that Nigeria, the world’s sixth largest producer of cashew, with annual production of about 120,000 tonnes, will be a good employer of labour if properly harnessed.

    “The inability of our local producers to process their products has meant that about 95 per cent of the annual production is exported as raw commodities with attendant low prices and inability of our producers and exporters to receive commensurate reward for their efforts.

    “To address some of the above challenges, NEXIM in collaboration with the African Cashew Alliance (ACA), and the United State Agency for International Development (USAID), launched the Nigerian Cashew Cluster Finance Scheme in 2012, through which NEXIM disbursed about N150million under the pilot scheme and has cumulatively disbursed about N1billion till date to the sub-sector,” Orya said.

     

     

  • NEXIM, OPS to establish $60m sealink firm

    To facilitate trade in the Economic Community of West African States (ECOWAS) and the Central Africa States, the Nigerian Export-Import Bank (NEXIM), in partnership with the Organised Private Sector (OPS), is set to establish a $60 million transnational shipping company.

    The sealink project, which is billed for inauguration in the fourth quarter, will be funded through a $36 million equity and $24 million borrowing.

    Speaking at the sensitisation forum on the Regional Sealink Project, the Managing Director, NEXIM Bank, Mr Roberts Orya, said NEXIM was taking this step in partnership with the OPS to encourage trade.

    He said this would break trade barriers, such as delay in clearing of goods, high transportation costs, high logistics costs, excessive tax and high cost of freight among others.

    He said $36 million would be used to procure vessels, equipment, office space and other infrastructure; $24 million will be working capital.

    “ The project will address the high transportation costs and excessive transit time making intra-regional trade non-competitive. It will also address the growth of intra-ECOWAS trade in the past decade from 4.7 million tonnes to 13.2 million tonnes without corresponding increase in transport infrastructure.

    “The project is expected to enable NEXIM to achieve credit growth towards improving intra-regional trade from current intra-regional trade levels to a minimum of 15 per cent annually,” Orya said.

    He said the ECOWAS Commission has endorsed the project with a commitment to fund the Investors’ Forum on it.

    “Also, the Maritime Organisation of West and Central Africa (MOWCA) has endorsed the project and is committed to providing technical support for its take-off.

    “ The African Development Bank (AFDB) is concluding arrangements toward a technical assistance to the project, while the World Bank has also requested for an update on the study with a view to providing technical assistance to the realisation of the project.

    “Institutional funding supports are also being pursued with multilateral financial institutions like the ECOWAS Bank for Investment and Development (EBID), African Export- Import Bank and West African Development Bank (BOAD).

    The National President, Nigeria Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr Ademola Ajayi, said the success of the project would increase intra-regional trade flow. He said it would also create jobs and investment opportunities, thereby meeting the Federal Government’s economic objectives and transformation agenda.

    “As you may be aware, travelling by road or connecting flights among West African states has always been a nightmare to private sector operators, considering the challenges of roadblocks by security agencies and other law enforcement agencies.

    “I want to encourage the OPS to be part of this project. The likes of Dangote can support the project because it will solve the problem of trade barriers within the region,” Ajayi said.

  • NEXIM, OPS to establish $60m sealink firm

    To facilitate trade in the Economic Community of West African States (ECOWAS) and the Central Africa States, the Nigerian Export-Import Bank (NEXIM), in partnership with the Organised Private Sector (OPS), is set to establish a $60 million transnational shipping company.

    The sealink project, which is billed for inauguration in the fourth quarter, will be funded through a $36 million equity and $24 million borrowing.

    Speaking at the sensitisation forum on the Regional Sealink Project, the Managing Director, NEXIM Bank, Mr Roberts Orya, said NEXIM was taking this step in partnership with the OPS to encourage trade.

    He said this would break trade barriers, such as delay in clearing of goods, high transportation costs, high logistics costs, excessive tax and high cost of freight among others.

    He said $36 million would be used to procure vessels, equipment, office space and other infrastructure; $24 million will be working capital.

    “ The project will address the high transportation costs and excessive transit time making intra-regional trade non-competitive. It will also address the growth of intra-ECOWAS trade in the past decade from 4.7 million tonnes to 13.2 million tonnes without corresponding increase in transport infrastructure.

    “The project is expected to enable NEXIM to achieve credit growth towards improving intra-regional trade from current intra-regional trade levels to a minimum of 15 per cent annually,” Orya said.

    He said the ECOWAS Commission has endorsed the project with a commitment to fund the Investors’ Forum on it.

    “Also, the Maritime Organisation of West and Central Africa (MOWCA) has endorsed the project and is committed to providing technical support for its take-off.

    “ The African Development Bank (AFDB) is concluding arrangements toward a technical assistance to the project, while the World Bank has also requested for an update on the study with a view to providing technical assistance to the realisation of the project.

    “Institutional funding supports are also being pursued with multilateral financial institutions like the ECOWAS Bank for Investment and Development (EBID), African Export- Import Bank and West African Development Bank (BOAD).

    The National President, Nigeria Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr Ademola Ajayi, said the success of the project would increase intra-regional trade flow. He said it would also create jobs and investment opportunities, thereby meeting the Federal Government’s economic objectives and transformation agenda.

    “As you may be aware, travelling by road or connecting flights among West African states has always been a nightmare to private sector operators, considering the challenges of roadblocks by security agencies and other law enforcement agencies.

    “I want to encourage the OPS to be part of this project. The likes of Dangote can support the project because it will solve the problem of trade barriers within the region,” Ajayi said.

  • NEXIM Bank’s credit to buyers of indigenous goods coming

    NEXIM Bank’s credit to buyers of indigenous goods coming

    The Nigerian Export- Import Bank (NEXIM) will provide loans to buyers of indigenous products to boost exports and deepen transactions in 2015, its Managing Director, Mr Roberts Orya, has said.

    He told The Nation that the initiative was aimed at making local products more competitive in the international market and enabling them to have an edge over others.

    He said to enhance the bank’s share capital, the bank was discussing with the Central Bank of Nigeria (CBN) and Ministry of Finance.

    Buyers’ Credit is a financial arrangement in which the bank or financial institution would extend credit to any country that is willing to buy made-in-Nigeria products. It is also known as financial credit.

    Orya said this is how it is done in some developed countries,adding that NEXIM Bank has studied other countries and is ready to introduce same to Nigeria.

    He said the economy has reached a level where it can also give the potential buyers of its products fund to buy goods, at least within the sub-region, adding that this will boost exports.

    On the Economic Community of West African States (ECOWAS) Trade Support Facility (ETSF), Orya said it was created by NEXIM for indigenous exporters to look for exports in the sub-region and that they were working with ECOWAS Bank on the project.

    Orya assured that the bank would provide more services when its capital base is increased, and that this is how EXIM banks in countries, such as India and Malaysia have helped their economy.

    He, however, raised concerns that lack of credit insurance has made it difficult for the bank to take exporters to the sub-region and take advantage of the huge potential there.

    He said any bank wishing to participate in co-financing a project with NEXIM must be in good health, adding that it must provide three years audited accounts and meet additional criteria by NEXIM.

    He said: “A borrower must be a credit worthy limited liability company, co-operative society, existing/new production units with a minimum of 50 per cent export orientation or an existing provider of export services. The borrower must establish that the loan will develop or expand his export business.”

  • NEXIM Bank moves to synergise creative industry

    NEXIM Bank moves to synergise creative industry

    WITH a mandate to promote the diversification of the Nigerian economy and develop the external sector through the provision of services in support of non-oil exports, which includes the creative industry, the Nigerian Export and Import Bank (NEXIM) is not resting on its oars in pooling resources to better the lot of the creative industry and its practitioners, its Managing Director, Roberts Orya, has said.

    Partnering with filmmaker Tony Abulu for the movie Dr. Bello, in the recent past, Orya said that funding the industry represents a significant commitment by the federal government to the creative segment of the economy. According to Orya then, the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme is intended to address issues regarding the institution of credible structures, attract investment in the development of content and infrastructure in the media and entertainment sector as well as improvement in production standards, distribution, marketing and exhibition standards. He was speaking in terms of the federal government’s directive making USD200M available to the creative industry.

    Cashing in on the success of the partnership with the filmmaker, NEXIM went ahead to work with the Nigerian Film Corporation (NFC) in a co-sponsoring arrangement at the 65th edition of Cannes International Film Festival, held in Cannes, France last year.

    NEXIM team, as revealed by Orya, was at the festival to seek co-financing/co-production opportunities in support of the Nigerian motion picture industry. At a special session held on Wednesday May 23rd 2012, in conjunction with the Federal Inland Revenue Service (FIRS) and the NFC, the bank enjoined exhibitors to explore areas of synergies between producers and film makers. It was also an avenue to showcase the abundant opportunities in the Nigerian movie industry.

    According to Orya, the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme is intended to address issues regarding the institution of credible structures, attract investment in the development of content and infrastructure in the media and entertainment sector as well as improvement in production standards, distribution, marketing and exhibition standards.

    True to his words, Wednesday, March 20, Orya, speaking as guest lecturer at the Pan-African University, Lagos, declared that the creative and entertainment industry is a key driver of global growth and can contribute to sustainable global economic recovery.

    During the recession, he said, the creative economy continued to thrive as people continued to go to the cinemas and museums, listen to music, watch videos and TV shows and played video games.

    Citing the Nollywod experience, Orya declared that the Nigerian film industry has literally upstaged the global movie world through its innovation, imaginativeness, and prolific performance. “Specifically, the industry is now globally adjudged as the most prolific with consistent production of more than 2000 titles in the country’s 3 major languages rendered every year since 2008. This has placed Nollywood as the third in global revenue earnings, with receipts over the years reported to range between US$300m and US$800m in the recent past to the extent that the practitioners and businessmen from Hollywood and other global equivalents can no longer ignore the industry as is being reflected in several collaboration movie works,” he said.

    Orya spoke on the topic That They May be One: Towards a Greater Synergy Between Nexim and the Creative Industry. An initiative of the School of Media and Communication (SMC) through its Mass Media and Writing Department, the NEXIM MD took the audience through the business of the bank and Nollywood.Orya revealed Nollywood has very high prospects for growth and sustainable development based on a combination of advantages which include prevalence of high pool of creative talents, strong and growing domestic entertainment industry, established overseas market demand in Africa, UK, USA and the Pacific Islands coupled with huge Diaspora population, among others. Thus warranting government’s attention and recognition of the industry as a major contributor to employment and foreign exchange generation and justifying the $200m Entertainment Industry Fund and the N3billion grant recently announced.

    Notwithstanding all these, Orya pointed out, the industry still faces challenges that are militating against the full realisation of its potentials. These include very low production for theatrical releases and cross-border co-production arrangements; and inadequate exhibition/theatrical infrastructure.

    The bank’s role in the creative arts and entertainment industry consists in funding intervention and capacity building. For the former, the bank extends loans to eligible companies in all the value-chain within the creative arts and entertainment industry under the Nigerian Creative Arts & Entertainment Industry Facility Scheme, says Orya.

    The MD quoted the total funding support to the Industry by NEXIM at over N778.5million, with applications for over N26billion under processing. Towards capacity-building, Mr. Orya stressed that the bank has been working towards ensuring that the industry operates in a structured manner and within global best practices/standards.

    “Till date, the bank has in collaboration with various stakeholders developed draft operating guidelines to enhance access to loan facilities with inputs from various stakeholders, including practitioners and regulators; and commissioned a study to review the industry and develop/recommend the best financing programme/instruments for the Nigerian Entertainment Industry based on the Bollywood financing experience, among others,” he added.

    Mr. Orya drew inferences from the bank’s current experience in its funding intervention, the EXIM India’s Report on Film Financing Programme and the Communique of Stakeholders’ Interactive Forum organised by Nigerian Film Corporation (NFC), stating that to further strengthen and deepen the industry, there is need for the establishment of an Entertainment Industry Guarantee Fund to strengthen the credit delivery system and facilitate flow of credit to the industry. This, he said, would be akin to the Cultural Industry Guarantee Fund established by Francophone West African countries in conjunction with ECOWAS Bank for Investment and Development (EBID), which was intended to facilitate bank financing of cultural industries in the francophone states.

    “Other steps that must be taken to rejig the industry include ensuring a Copyright Enforcement regime and intensification of the Reform System of the Nigerian Copyright System; design and issuance of sector-specific policy instruments by the insurance industry like completion bond, insurance policy, among others,” he stressed.

    In conclusion, Orya added that there is a strong need for government to consider the establishment of the National Film Development Fund (NFDF); provision of sector-specific investment/tax incentives regime, especially towards the establishment of digital studios as well as Cinemas/Multiplexes to address the issue of low Cinema screen density; as well as to operationalise the Nigerian Film Institute campus in Lagos to complement the Jos Campus as well as other private sector initiatives to enhance human capital development in the industry.

    In his remarks, the Dean of SMC, Prof. Emevwo Biakolo, stated that the Lecture Series has been set to run on a quarterly basis as an ongoing dialogue between town and gown, the academia and society to inform and educate diverse publics on developmental issues in the media.

    NEXIM was established by Act 38 of 1991 as an Export Credit Agency with the broad mandate to promoting the diversification of the Nigerian economy and deepening the external sector, particularly the non-oil through the provision of credit facilities in both local and foreign currencies; risk-bearing facilities through export credit guarantee & export credit insurance; business development and financial advisory services etc.

  • NEXIM lends N70b to exporters

    The Nigerian Export Import Bank (NEXIM) gave N70 billion loan facility to exporters last year, the Managing Director, Mr Roberts Orya, has said.

    Orya, who spoke through the Assistant General Manager/Head, Projects, Mr Ifeanyi Nwade,in Abuja last week, said the bank grants short, medium and long term fixed rate loans to exporters directly under co-financing arrangements with eligible banks.

    Orya added that direct loans were made available to assist exporters complete their export sales by providing working capital, facilities and funds for procurement of equipment.

    The NEXIM boss said such loans were granted directly to Nigerian exporters in both local and foreign currencies and up to 80 per cent of the total project costs, adding that items that are not eligible for financing from NEXIM, “include, armaments, ammunition and other military equipment; psychotropic drugs, narcotic as well as all items prohibited by the international conventions or environmental constraints; pornographic and obscene materials and items prohibited for importation by prevailing government policies and guidelines.”

    Orya said banks interested in co-financing export projects with NEXIM, will have to “be in good financial health as evidenced by three years audited accounts, as well as meet additional criteria set by NEXIM from time to time.”

    He said: “A borrower must be a credit worthy limited liability company, co-operative society, existing/new production units with a minimum of 50 per cent export orientation, or an existing provider of export services,” adding that the borrower must establish that the loan will be used to develop or expand his export business.