Post by Trade Coach on Sept 14, 2017 9:48:06 GMT 1
The president BUHARI’S transformation agenda which has almost become a household name in the country is intended to permeate a wide spectrum of the nation’s everyday life, ranging from corruption, energy, security, sports, entertainment to the whole gamut of every facet of our social life. The present government is credited with the turn-around being experienced in many of the country’s economic sectors.
Perhaps, president Muhamadu Buhari has not done up to the immediate past administration to ensuring that various Development Finance Institutions (DFIs) are adequately empowered to fully contribute to the national transformation agenda. The injection of billions of naira into the bank of industry, Nigerian Export-Import Bank, Bank of Agriculture and the Federal Mortgage Bank and others are pointers to this.
Laudable as the Tranformational Agenda may seem, it would have remained a mere wish-list without the required funding needed to translate it to reality. What is of note is that all of the benefits that the transformation programme advocates require huge financial outlay. Besides, the programme requires long-term sustainable funding which the commercial banks are not enable to provide, given the short-term nature of their credit portfolio. The good news however, is that NEXIM Bank has since the era of former President Goodluck Ebele Jonathan risen to bridge the gaps.
In no other sector is the role of NEXIM pronounced than in the manufacturing, mining and the agric sectors in producing non-oil goods for export. This way, the volume of external trade is being gradually shifted away from crude oil (upon which the nation largely depends), to non-oil items that are abundant and widespread across the country, but which have largely suffered neglect due to a multiplicity of factors.
The leadership of the Nigerian Export-Import Bank is upbeat about the successes so far recorded since the Jonathan administration till date of which NEXIM Bank has played pivotal roles.
According to a top employee at NEXIM, that the important story of Nigeria’s advancement from where we are would not be told by earnings from our hydrocarbon reserves. The success, he said, would be driven by a robust manufacturing industry: self sufficiency in agriculture for food and processing so that excess yields could tap export markets: world class service sector to serve our domestic industries, global outsourcing and export markets, and commercial access to wider range of mineral deposit that dot every nook and cranny of the country. Its not for lack of ideas that the export of non-oil goods still remain at infancy with the will and commitment to focus and redirect resources to the non-oil sectors and take cognitive action to actualize what is largely recognized as a cash cow.
Although NEXIM was established to play this role, President Buhari’s commitment to focus on these sectors in his bid to improve on the nation’s revenue profile, outside crude oil sales and determination to also create employment for the nation’s educated and skilled vibrant youths, also played a key role.
What the administration of president Buhari is doing, perhaps more than any previous administration, is combine commitment with practical actions in diversifying the Nigerian economy away from its sole reliance on crude oil for revenue.
In pursuit of its drive to impact on other segments of the economy, the bank has also (since the regime of President Jonathan) taken the management of the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS). The fund, which is lent at below commercial bank’s rate, is meant to fund businesses across the entertainment value – chain, including film production, cinema operation, music recording, intellectual, property development and recording studios, as a revolving fund with specific repayment terms.
NEXIM Bank in its efforts to create a robust economy where the private sector thrives has also adopted various measures. Under the foreign input facility, NEXIM grants short, medium and long term fixed rate loans in foreign currency to participating banks on behalf of their export clients. These facilities are available to Nigerian exporters engaged in the importation of raw materials for export production, packaging materials for export, spare parts for export promotion and capital equipment needed for production of goods for export. Accessing the facility is devoid of the usual bottle-necks. Exporters simply apply to the participating banks for foreign input facility, the participating bank/s then appraise the application based on its existing lending rules; the participating banks then forward a formal request to NEXIM, supported by relevant documents, and then NEXIM disburses funds to the participating banks upon fulfillment of all conditions precedent to draw loan.
Under its local input facility, NEXIM Bank also grants short, medium and long term loans in local currency to participating banks on behalf of their clients. These facility is for setting up new export-oriented projects, revitalization, acquisition of additional assets for modernization, and/or expansion of existing production units for exports; acquisition, rehabilitation and/or expansion of plantations/farms for production and processing of exportable products as well as acquisition of spare parts and packaging materials for manufacturing of exportable products.
In the area of export credit guarantee, NEXIM Bank provides an effective tool for the management of risks associated with export financing. The objectives of the facility are to protect banks in Nigeria and foreign supplies of credits and goods against risks of non-payment for loans and advances granted to exporters to meet short-term contracts and to encourage banks and other financial institutions to finance export business without fear of default from exporters.
The guarantees available includes pre-shipment guarantee which entails credit/advances granted by a bank for the purpose of manufacture, purchase, processing and/or packaging of goods to be exported under a confirmed export order. There is also post-shipment guarantee which guarantees credits/advances granted by a bank in Nigeria against an export bill or any other receivables. Besides, there is the advance payment guarantee designed to protect foreign buyers against payment risks in respect of money advanced to exporters in Nigeria to finance export order. The risks covered are insolvency of the buyer immediately before shipment is undertaken: cancellation of export license, imposition of restriction on the export of goods, insolvency of the buyer and protracted default by the buyer.
Perhaps, president Muhamadu Buhari has not done up to the immediate past administration to ensuring that various Development Finance Institutions (DFIs) are adequately empowered to fully contribute to the national transformation agenda. The injection of billions of naira into the bank of industry, Nigerian Export-Import Bank, Bank of Agriculture and the Federal Mortgage Bank and others are pointers to this.
Laudable as the Tranformational Agenda may seem, it would have remained a mere wish-list without the required funding needed to translate it to reality. What is of note is that all of the benefits that the transformation programme advocates require huge financial outlay. Besides, the programme requires long-term sustainable funding which the commercial banks are not enable to provide, given the short-term nature of their credit portfolio. The good news however, is that NEXIM Bank has since the era of former President Goodluck Ebele Jonathan risen to bridge the gaps.
In no other sector is the role of NEXIM pronounced than in the manufacturing, mining and the agric sectors in producing non-oil goods for export. This way, the volume of external trade is being gradually shifted away from crude oil (upon which the nation largely depends), to non-oil items that are abundant and widespread across the country, but which have largely suffered neglect due to a multiplicity of factors.
The leadership of the Nigerian Export-Import Bank is upbeat about the successes so far recorded since the Jonathan administration till date of which NEXIM Bank has played pivotal roles.
According to a top employee at NEXIM, that the important story of Nigeria’s advancement from where we are would not be told by earnings from our hydrocarbon reserves. The success, he said, would be driven by a robust manufacturing industry: self sufficiency in agriculture for food and processing so that excess yields could tap export markets: world class service sector to serve our domestic industries, global outsourcing and export markets, and commercial access to wider range of mineral deposit that dot every nook and cranny of the country. Its not for lack of ideas that the export of non-oil goods still remain at infancy with the will and commitment to focus and redirect resources to the non-oil sectors and take cognitive action to actualize what is largely recognized as a cash cow.
Although NEXIM was established to play this role, President Buhari’s commitment to focus on these sectors in his bid to improve on the nation’s revenue profile, outside crude oil sales and determination to also create employment for the nation’s educated and skilled vibrant youths, also played a key role.
What the administration of president Buhari is doing, perhaps more than any previous administration, is combine commitment with practical actions in diversifying the Nigerian economy away from its sole reliance on crude oil for revenue.
In pursuit of its drive to impact on other segments of the economy, the bank has also (since the regime of President Jonathan) taken the management of the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS). The fund, which is lent at below commercial bank’s rate, is meant to fund businesses across the entertainment value – chain, including film production, cinema operation, music recording, intellectual, property development and recording studios, as a revolving fund with specific repayment terms.
NEXIM Bank in its efforts to create a robust economy where the private sector thrives has also adopted various measures. Under the foreign input facility, NEXIM grants short, medium and long term fixed rate loans in foreign currency to participating banks on behalf of their export clients. These facilities are available to Nigerian exporters engaged in the importation of raw materials for export production, packaging materials for export, spare parts for export promotion and capital equipment needed for production of goods for export. Accessing the facility is devoid of the usual bottle-necks. Exporters simply apply to the participating banks for foreign input facility, the participating bank/s then appraise the application based on its existing lending rules; the participating banks then forward a formal request to NEXIM, supported by relevant documents, and then NEXIM disburses funds to the participating banks upon fulfillment of all conditions precedent to draw loan.
Under its local input facility, NEXIM Bank also grants short, medium and long term loans in local currency to participating banks on behalf of their clients. These facility is for setting up new export-oriented projects, revitalization, acquisition of additional assets for modernization, and/or expansion of existing production units for exports; acquisition, rehabilitation and/or expansion of plantations/farms for production and processing of exportable products as well as acquisition of spare parts and packaging materials for manufacturing of exportable products.
In the area of export credit guarantee, NEXIM Bank provides an effective tool for the management of risks associated with export financing. The objectives of the facility are to protect banks in Nigeria and foreign supplies of credits and goods against risks of non-payment for loans and advances granted to exporters to meet short-term contracts and to encourage banks and other financial institutions to finance export business without fear of default from exporters.
The guarantees available includes pre-shipment guarantee which entails credit/advances granted by a bank for the purpose of manufacture, purchase, processing and/or packaging of goods to be exported under a confirmed export order. There is also post-shipment guarantee which guarantees credits/advances granted by a bank in Nigeria against an export bill or any other receivables. Besides, there is the advance payment guarantee designed to protect foreign buyers against payment risks in respect of money advanced to exporters in Nigeria to finance export order. The risks covered are insolvency of the buyer immediately before shipment is undertaken: cancellation of export license, imposition of restriction on the export of goods, insolvency of the buyer and protracted default by the buyer.