The Nation Newspaper

Tag: NEXIM

  • NEXIM Bank and Nigeria’s manufacturing sector

    Before the discovery of oil in Nigeria, her manufacturing industry was flourishing robustly. Areas such as cocoa, rubber, and agriculture were the mainstay of the nation’s economy. However, these sectors went into comatose following the discovery of oil in commercial quantities. Since then, Nigeria’s economy has been anchored on the oil sector.

    But the dangers such sole dependence portends might have informed President Goodluck Jonathan’s tremendous commitments to diversifying the nation’s economy. The prospects of his efforts have given hope that sooner than later, Nigeria’s non-oil sector will take the centre stage.

    It is against this background that the Nigerian Export-Import Bank, NEXIM, established by Act 38 of 1991 as an export credit agency to promote diversification of the Nigerian economy and deepen the external sector through the provision of credit facilities in both local and foreign currencies, risk bearing facilities, business development and financial advisory services and trade and market information services, has initiated a working blueprint, spanning from 2010 to 2015, to propel the non-oil sectors of Nigeria’s economy to a grand-level. The bank’s key areas of concentration are manufacturing, agriculture, solid minerals and services. The goal is to become the leading export development bank in Africa.

    The objectives of developing these non-oil sectors are to have a clear market focus and become a major contributor to non-oil exports, build a world-class institution which imbibes best-in class corporate governance and risk management practices; be a relevant player in the export market and significantly influence government trade policies; build a profitable institution with a robust balance sheet size with a highly skilled and motivated workforce.

    The bank has budgeted about N42 billion for the manufacturing sector’s financing requirement, or six per cent of the manufacturing sector’s financing needs, while accounting for at least 3.71 percent of the nation’s gross domestic product (GDP) by 2015.

    Its managing director Roberts Orya said the bank has already approved and issued $32.3 million worth of guarantees to support the nation’s manufacturing, transport and tourism sub-sectors.

    Orya also disclosed that NEXIM Bank has identified manufacturing, agriculture, solid minerals and services, as four sectors of the economy to play in, hence its MASS agenda. The MASS agenda is a corporate transformation project of the bank that was launched in April 2010 to revamp the bank and ensure it becomes the leading African export development bank.

    Orya said the bank’s plan under the new agenda is to ensure that whatever product to be exported henceforth has some value addition, and not just raw materials, as was the case in the past.

    In his words, “We want some kind of value addition, and are committed to deepening the manufacturing sector in the country by providing all necessary assistance to manufacturers.”

    With the MASS project, the bank hopes to increase the efficiency and profitability of manufacturing establishments through the funding and acquisition of new technology. It would be recalled with project financing from NEXIM Bank, RIGGS Ventures Plc recently expanded its operations with production capacity increasing from 9 million to 69 million polypropylene sacks per annum, consisting of cement, industrial and agro sacks. This expansion has created over 300 direct jobs and thousands of indirect jobs.

    The company has its major customers in Nigeria, Republic of Benin, Cameroon and Niger Republic and other ECOWAS countries.

    Orya said initiatives like RIGGS are very strategic to achieving the bank’s mandate to deepen the manufacturing sector and create more jobs for the Nigerian youths and thereby contribute to boosting non-oil exports.

    He said NEXIM’s commitment to handle bourgeoning manufacturing concerns such as RIGGS Ventures to become supranational entities in the ECOWAS and Central African sub-regions by ensuring that their products are made easily exportable to these markets.

    NEXIM Bank operates in a synergy with the Central Bank of Nigeria. NEXIM’s strategic plan for the CBN’s trade development includes enhancing the implementation of ECOWAS trade support facility, becoming the national guarantor for the ECOWAS interstate road transit scheme, facilitating the realisation of NEXPOTRADE goals of establishing export houses in all ECOWAS countries, and improving the strategic alliances with multilateral agencies, DFIs and export credit agencies.

    In the manufacturing sector from 2010 to 2015, NEXIM Bank has maintained an increased efficiency and profitability of manufacturing establishments through the funding of acquisition of new technology, increased access of manufacturers to short and long-term credit, provide 6% (about N42bn) of the manufacturing sector’s financing requirement by 2015, account for 3.71% of the sector’s GDP by 2015 and create about 70,479 jobs through project financing activities.

    NEXIM to this end identified four subsectors in the manufacturing initiative. They are food and beverages, wood and wood products, domestic and industrial products (plastic and rubber), and steel and processed alloy. The peculiar features of this subsector are that they are dominated by multi-nationals, depend on imported machinery; and the abundance of local raw materials. It is estimated that in 2008, the potential of this sector’s gross domestic product was 4. 19% with a projected growth rate of 7. 14%. Its financing requirement as at 2011 was N522bn while NEXIM’s proposed intervention stood at N12bn.

    No doubt, NEXIM is toeing the line of the continent’s parent body the African Export-Import Bank (Afreximbank) which has in the same vein provided about 55mn euros in loans to three local manufacturing firms for equipment procurement and to expand food processing capabilities. It is the bank’s initiative to move Africa away from being an exporter of raw produce alone.

    It is expected that NEXIM bank, just like Afreximbank, will increase direct lending and encourage commercial banks to be involved in lending wherever possible.

    The roadmap to NEXIM’s success in this aspect is not easy, although the expectations are high that it will be able to wither the storm to reposition Nigeria’s non-oil sector for the better. However, it needs to have a research-based body to identify core areas across the federation with their comparative manufacturing strength, and encourage them respectively through manpower and funds to enable them to develop their respective manufacturing prowess. Again the bank should also ensure that these products are valued well through sound marketing strategies. By so doing, the oil sector will not constitute the core of Nigeria’s economy; above all the prospect of employment, industrialisation and foreign exchange is higher in the non-oil sector.

    Orya-led NEXIM Bank is abreast of this having made tours to many countries where EXIM Banks exist. Recently Orya presented a strategic framework to his Turkish counterpart aimed at deepening the already existing collaboration between the two EXIM Banks. The visit to Turkey was borne out of the need to explore additional off-shore sources of financing to cater to the bank’s rising profile of investors in the MASS sectors of Nigerian economy. The trip involved officials of AFREXIM Bank from Cairo, Egypt, led by the executive vice president finance, administration and banking services, Mr Denys Denya. Also on the trip was Chief Sunny Odogwu of the Odogwu Group of Companies.

    It is expected that the Manufacturing Association of Nigeria, business moguls, corporate bodies and investors generally will tap into NEXIM’s manufacturing innovations by becoming relevant stakeholders. That is the only way to realise President Goodluck Jonathan’s transformation agenda and the dream for a new Nigeria. The time to do it is now.

    Gladstone Nwamu is a public affairs analyst based in Asaba, Delta State .

  • NEXIM recovers N1.3b loans

    NEXIM recovers N1.3b loans

    The Nigeria Export Import Bank (NEXIM) recovered N1.3 billion non-performing loans (NPLs) from debtors last year, its Managing Director, Roberts Orya, has said.

    The amount, he said, reduced its non-performing loans to the barest minimum, adding that loan recovery remains a major challenge in the banking sector.

    He disclosed that the success achieved by the management of NEXIM during the 2012 operational year was due to sustained aggressive measures put in place to recover the delinquent loans.”

    “The alarming decline in the quality of risk assets of the bank’s total loan portfolio as at August 20, 2009 was N14.6 billion out of which 72 per cent was non-performing and within that category N10.03 billion or 69.05 was classified as completely lost,” he explained.

    The NEXIM boss: “The various initiatives embarked upon by the management had positively impacted on the bank’s operations by turning around its fortunes and making it a profit-making  organisation.”

    These initiatives he added resulted: “In the impressive performance in year 2010 with an audited profit of N189.00 million as against the loss of N5.460 billion incurred in 2009.”

    Orya said the audited accounts of the last two years were being computed, stressing : “The bank has been able to leverage on its  balance sheet to secure lines of credit from institutions like the African Export-Import Bank (Afrexim), The Export-Import Bank of India while it has collaboration arrangements with United States Export-Import Bank and other EXIM Banks.”

    In the last two years Orya stated that NEXIM has: ”Supported Nigerian exporters mainly the small and medium enterprises (SME’s) with some engaged in Greenfield projects, to the tune of N23.33 billion and issued guarantees valued at $27.3 million between 2009 and August 2012.”

    These interventions he said are: “In our target sectors with high growth potential of manufacturing, agro – processing, solid minerals and services. With the turnaround of the Bank’s performance, management will ensure an appreciable return on the equity investment of the shareholders.”

    Accordingly, a dividend for the 2010 financial year performance was declared and paid, which was the first time since year 2003 when dividend was last paid.

    Orya explained that as part of the transformation agenda, the management has been transforming the Bank’s human capital with the engagement of highly skilled and motivated personnel in the various departments.

  • NEXIM and Nigeria’s non-oil export

    NEXIM and Nigeria’s non-oil export

    SIR: Around the world’s growing economies- from China to India and to the biggest economies in the US and UK, emphases are placed on support for export-oriented small and medium enterprises, SMEs, as well as their modernisation and expansion activities.

    Nigeria’s case should not be different. Nigeria, like many other developing African countries started as agrarian economy. The agricultural produce of the early Nigeria included groundnuts, rubber, timber, cocoa, beans, palm kernel, hides and skin, to mention just a few.

    These products accounted for over 50 percent of Gross Domestic Product (GDP) and was the main source of export earnings and public revenue. With the crude oil discovery in 1956 and its exploration in commercial quantityin1958 however, the oil sector gradually became the dominant sector in the economy, and almost the sole source of export earnings. For instance in 1970’s petroleum constituted of about 78 percent of Federal Government revenue and more than 95 percent of export earnings.

    To give the economy a boast and encourage exporters to meet with the challenge of sourcing for required funds, the Nigerian Export-Import Bank (NEXIM) was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a strategic objective of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings.

    However, before now, the Nigerian Export-Import Bank (NEXIM), was largely seen by many operators in the financial sector as a mere waste pipe or another bureaucratic contraption set up to minister to the needs of well-connected borrowers who may never repay their loans. In fact, at a point NEXIM became almost a dead institution and no one would want to touch it with a 12-foot pole. It became deeply mired in debts, posting losses year after year.

    NEXIM Bank was however reconstituted in August 2009 by the federal government. The board of directors, led by Dr. Kingsley C. Moghalu, deputy governor, Financial System Stability of the Central Bank of Nigeria (CBN), in 2010, endorsed the repositioning of NEXIM Bank. The bank then remodelled its objectives to develop the sectors of manufacturing, agro-processing, solid minerals and services which have high amount of employment and foreign exchange earning potential in the non-oil sector.

    Recently, NEXIM made available the sum of N23.33 billion to Nigerian non-oil exporters, particularly the small and medium enterprises (SMEs) while the sum of $27.3 billion guarantees had been issued between 2009 and August 2012. Out of this amount, manufacturing received N11.3 billion of 48 percent while agro-processing got about N5 billion or 21 per cent. The solid minerals sector received about N2 billion, representing 8.9 per cent and the services sector about N4.8 billion.

    This shows a commitment to becoming a major contributor to non-oil exports.

    Though not well known to the public, NEXIM Bank has been increasingly important to a growing number of small businesses who have become an integral part of the growing number of non-oil exports by Nigerian export companies to top export destinations. NEXIM presently provides short and medium term loans to Nigerian exporters. It also provides short term guarantees for loans granted by Nigerian banks to exporters as well as credit insurance against political and commercial risks in the event of non-payment by foreign buyers. The bank is also the government’s National Guarantor under the ECOWAS Inter-state Road Transit programme.

    NEXIM is indeed moving in the right direction in the quest to increase Nigeria’s non-oil exports.

    • Augustine Aminu

    Abuja

  • NEXIM recovers N1.3b in 2012

    The Nigeria Export Import Bank (NEXIM) has said it recovered N1.3 billion as at the end of last year. The amount, the bank said, reduced its non-performing loans to the barest minimum. The bank’s Managing Director, Roberts Orya said that loan recovery remains a major challenge in the banking sector.

    He said that the success achieved by the management of NEXIM during the 2012 operational year “was due to sustained aggressive measures put in place to recover the delinquent loans.”

    He said that “the alarming decline in the quality of risk assets as the bank’s total loan portfolio as at 20th August 2009 was N14.6 billion out of which 72 per cent was non performing and within that category N10.03 Billion or 69.05 was classified as completely lost.”

    The NEXIM boss noted that “the various initiatives embarked upon by the management had positively impacted on the bank’s operations by turning around its fortunes and making it a profit-making organisation.”

    These initiatives he added, resulted “in the impressive performance in year 2010 with an audited profit of N189.00 million as against the loss of N5.460 billion incurred in 2009.”

    Orya said the audited accounts of the last two years were being computed, stressing that “the bank has been able to leverage on its balance sheet to secure lines of credit from institutions like the African Export-Import Bank (Afrexim), The Export-Import Bank of India while it has collaboration arrangements with United States Export-Import Bank and other EXIM Banks.”

     

     

     

     

     

  • NEXIM boosts export with N85b

    The  Export-Import Bank (NEXIM Bank) gave over N85 billion in support of 900 export projects last year, its Managing Director, Roberts Orya, has said.

    In a statement, Orya said, the bank created over 300,000 direct and indirect jobs and would help in generating over $1.2 billion in foreign exchange earnings for the country, substantial part of the money, he added was spent on Small and Medium Scale Enterprises (SMEs).

    Orya said, as an export credit bank of the Federal Government, NEXIM is working hard to rationalise its authorisation of diversification of the  economy through the provision of finance, risk bearing, and policy support to the non-oil export sector.

    He said:  ”Given our efforts to develop the high growth sectors and increase employment generation in the country, we have also developed a funding programme for the creative and entertainment industry in addition to a special scheme for SME exporters in the ECOWAS region.”

    Orya said the bank has also issued guarantees worth $27.3milion to some manufacturers some of whom are engaged in greenfield projects.

    The interventions, Orya added, were in its target sectors with high growth potential of manufacturing, agro-processing, solid minerals and services.

    The NEXIM Bank’s chief said as a result of these operational interventions, the bank was able to generate and sustain direct jobs of over 14,358 last year.

    He commended the shareholders for fresh capital injection as well as other institutional support through supervisory and regulatory over- sight and guidance from the CBN and the Federal Ministry of Finance.

    He urged the government and other  stakeholders to make use of small manufacturing industries to boost exports.

  • Nexim, miners association renew pact

    The Managing Director/CEO of Nigerian Export Import Bank (NEXIM), Mr. Roberts U. Orya met with the Patrons of the Miners’ Association of Nigeria to discuss areas of collaboration on a strategic framework both parties are developing.

    The bank said in a statement that the pact was meant to structure and attract sustainable investments to the solid minerals sector.

    The bank said meeting with the group was a gesture by its patrons to discuss issues of mutual cooperation with NEXIM. It was also a follow-up to the interactive business dinner organised by the association in conjunction with the Federal Ministry of Mines & Steel Development.

    Presenting the bank’s initiative and market focus to the association, Mr. Orya said that Solid Minerals is a critical sector for the bank under its MASS Agenda.

    He said the bank has committed more than N2.5 billion or nine per cent of its total portfolio since August 2009 to the sector.

    “This does not scratch the surface of the sector’s requirement if Nigeria is to take advantage and benefit from the huge mineral deposits the country is endowed with,” he said.

    He explained that solid minerals mining is a capital intensive area and requires strong government intervention to unlock its huge revenue and job creation benefits for the country.

    He said that using statistics from theMining Cadastre Office and the Nigerian Geological Survey Agency factsheets, Nigeria is endowed with more than 33 commercially viable solid minerals.

  • BoI, FMBN, NEXIM, others assets hit N380b

    THE assets of Bank of Industry (BOI), Federal Mortgage Bank of Nigeria (FMBN), Nigerian Export Import Bank (NEXIM), Bank of Agriculture (BoA), and Infrastructure Bank (IB) rose by 5.8 per cent to N380.3 billion at the end of the second quarter of this year, the Central Bank of Nigeria (CBN) has said.

    The apex bank said paid-up share capital, deposits and loans/advances increased by 3.1, 28.7 and 25.0 per cent to N70.5 billion, N94.2 billion and N162.2 billion.

    Total shareholders’funds, however, declined by 8.1 per cent to N23.7 billion, while a profile of the asset base of the institutions indicated that BoI, FMBN, NEXIM, BoA and IB accounted for 56.6, 18.2, 12.4, 10.0, and 2.8 per cent of the total.

    With the exception of the BoI, the other DFIs were faced with dire operational challenges as evidenced in the increase in their aggregate losses from N42.6 billion at end of December 2011 to N47.1 billion at end of June 2012.

    The Federal Government has also called for the recapitalisation of the DFIs. The government had directed the CBN Governor Lamido Sanusi, and Minister of Finance Ngozi Okonjo-Iweala, to meet with Minister of Trade and Investment Olusegun Aganga, to come up with modalities, which would enable it to increase the capital base of the DFIs.

    It said the move to recapitalise the bank was not to only to improve its capacity to fund the country’s industrial sector, but to also align its operational practices with international best practices.

  • NEXIM mulls ECOWAS shipping to boost trade

    NEXIM mulls ECOWAS shipping to boost trade

    The Nigerian Export and Import Bank (NEXIM) is facilitating the establishment of a regional shipping line that will boost trade flows within the Economic Community of West African States (ECOWAS) sub-region, its Managing Director, Robert Ungwaga Orya, has said.

    He said this at the investiture and induction of the Chartered Institute of Bankers of Nigeria (CIBN), while fielding questions from reporters. He said there are huge potential in the sub-region that needed to be harnessed. He regretted that West Africa has the highest transport and logistics cost.

    NEXIM Bank with the mandate of diversifying the external sector of the economy away from the mono-product of oil, has taken several steps as an export credit agency to deepen trade.

    According to Orya, who was presented with Honorary Fellowship of the Chartered Institute of Bankers of Nigeria (CIBN), one of such steps is the discovery that trade in the West African sub-region was not growing.

    He identified the movement of goods within the ECOWAS sub- region as part of the challenge, due to lack of efficient sea going vessels. He said Nigerians are not actively participating in the maritime business. According to him, until this is reversed, foreigners will continue to exploit Nigerians.

    “Our exporters will not be able to enhance the volume of non-oil trade flows. So, what NEXIM has done is to find a way of facilitating the setting up of a regional maritime shipping line to be run by the private sector, because it is the private sector that is actually trading,” Orya stated.

    According to him, “If you have to move goods from Lagos to Tema port in Ghana by truck, with all the multiple check points, all the harassments from security agencies, lack of road infrastructure, it will take you like six days. But if you want to move you goods from Lagos to the same Tema port in Ghana, it will take you like 60 days. This is because they will first take our goods to Europe and then do transshipment.”

    He regretted that under that scenario, if a N500 million loan, for instance, is given to a producer who produces 20 containers, before getting products to final consumers, all realisable profits would have been eaten up. The tonnages of goods in the past decades have moved from 4.7 to 13.2 million tones, but nothing has been done to improve the road infrastructure.

    “We believe that for us to have a safe and sound banking environment we need to have professionalism and the CIBN are doing quite a lot in this direction. They are ensuring that members of the institute apply ethics and professionalism in running the banks. He said the recognition by CBN was a great exposure.

    “It is an exciting moment for me and I want to say that it will spur me to build capacity of the younger bankers. I think we need to leave a legacy. It will spur me to do more in capacity building to ensure that professionals who will take after us are well equipped,” he stated.

    Though the CIBN has come up with an Act, the NEXIM boss wants the institute to step up enforcement of the Act. However, he believes the enforcement of the Act requires collective effort. The success of NEXIM in the past few years has been meteoric. NEXIM, under the leadership of Orya, has seen a rapid and sustained transformation that has changed the fortunes of the bank since 2009.

  • Bank supports shipping line to boost African trade

    Bank supports shipping line to boost African trade

    The Nigerian Export-Import Bank (NEXIM) is providing funding and support to set up a shipping company to boost intra-African movement of goods, an official said.Vessels from the West Africa Sealink Co, as the company will be known, will call on ports on the Atlantic coast from Dakar, Senegal, in the north to Libreville, Gabon in the south, Chinedu Moghalu, a spokesman for the Abuja-based lender, told Bloomberg in an e-mailed response to questions.

    “Total investment for the new company is estimated at $60 million for a start,” Moghalu said. Prospective investors will meet in Accra, the capital of Ghana, before the end of September to work out “‘the allocation of shares and conclusion of key appointments and partnerships” ahead of the company’s start by the first quarter of next year, he said.

    Trade among members of the Economic Community of West African States (ECOWAS) accounts for about 11 per cent of the group’s trade, while business with Europe represents 45 per cent, according to the Nigerian lender also known as NEXIM. Factors slowing regional trade include current trans-shipment arrangements through Europe that result in an average of 60 days delivery from the port of Lagos to that of Accra, it said.

    The Sealink project is intended to “increase trade flows, reduce time and costs” while “improving duty receipts by national governments and port authorities,” Moghalu said.

    At the start, the shipping company will ply routes between west and central Africa before expanding its services to southern Africa and South America, he said.

  • Nexim’s MD visits Origin Group

    Nexim’s MD visits Origin Group

    The Managing Director of Nigerian Export Import Bank (NEXIM), Mr Robert Orya, yesterday visited the facilities of Origin Group in Lagos.

    The visit, Orya said, was aimed at selecting private sector players to boost the development of the non-oil sector through export promotion programmes of value added products.

    He spoke of efforts by NEXIM Bank in supporting the Vision 20: 2020 of the Federal Government, especially through increased export trade activities in the West African sub-region.

    He also spoke about different in-country trade barriers among ECOWAS member states especially in formalising trade activities going on across Nigerian borders without being captured in national trade statistics.

    Orya said the potential of the agricultural industry and other non-oil sectors for employment creation and national development are huge and must be given priority attention through consistent institutional support and risk mitigation frameworks by relevant agencies of government.

    The NEXIM boss inspected the tractor assembly plant of Origin Automobile Works, (a subsidiary of Origin Group) where about 1,800 tractors of different capacities shall be assembled for a special agricultural development project tagged ‘Tractorise Nigeria.

    He also visited the proposed factory site for tomato paste dilution plant of Vegefresh Company Limited, export processing facilities of the Group and furniture manufacturing factory, among other things.

    The Managing Director of Origin Group, Mr S. J. Samuel, while responding, thanked the Orya for the visit, which he said was an encouragement to the Group.

    He also pledged the support of Origin Group to the vision and aspirations of NEXIM Bank and the Federal Government, adding that more than 2000 jobs will be created by the Group before the end of the second quarter of 2013.