Post by Trade facilitator on Feb 9, 2012 17:22:26 GMT 1
The success of the Nigerian Export and Import Bank (NEXIM) in the past few years has been meteoric. NEXIM, under the leadership of Robert Ungwaga Orya, has seen a rapid and sustained transformation that has completely changed the fortunes of the bank since 2009.
It would be recalled that the bank, up until the Roberts Orya era, was run in deficit. The current robust state of the bank is an indication that Nigeria is steadily realising her export promotion targets in the non-oil sector, which have been elusive over the years.
The Managing Director/CEO, during his recent meeting with the Senate Committee on Budget and Insurance to defend the bank’s 2012 Budget at the National Assembly, said NEXIM targets a profit of N1.6 billion, as against the N1.1 billion in the last fiscal year 2011.
At the budget defence, Mr. Orya announced the determination of NEXIM to give an urgent attention to the non-oil (MASS) sectors of the economy – manufacturing, agriculture, solid minerals and services – which it will tap in the hitherto virgin sectors, and propel Nigeria’s economy beyond expectations.
Towards this, he presented a budget projection of N30 billion to promote export-oriented investments in these sectors. Echoing his words: “Forty-four per cent will go to manufacturing, 35.8 per cent, agriculture; 5.6 per cent, solid mineral resources, while services take up 14 per cent.” This will create over 23,923 jobs and generate $229.6 million forex earnings for Nigeria in the 2012 fiscal year through active support of the manufacturing, agricultural, solid mineral and Service sectors of the nation’s economy.
Taking the committee through the business activities of the bank for the year 2011, Mr. Orya explained that what NEXIM has done over the years toward the realization of its mandate was to enhance the contribution of the non-oil sectors to the GDP through funding interventions in the MASS sectors, where the country has high export potentials and comparative advantage. For instance, according to him, in the agricultural sector, NEXIM has funded a lot of Greenfield and start-up projects that have become successful and are published on the CBN’s Top 100 Exporters List.
He informed the committee that so much is happening in the mining sector, where the bank is providing the required assistance to get the industry well structured. Despite the enormous risks, NEXIM is stepping up to its role as a development financial institution, to provide the relevant products to stimulate and attract investment to the sector to make it more viable and attractive for both the commercial banks and every other private entity that is interested to operate there. He explained that a lot of work has gone into charting an investor friendly policy framework for the mining sector in order to ensure full realization of the huge potentials therein, which economic impact would no doubt surpass that of the oil and gas sector.
As part of its mandate, Mr. Orya informed the committee that NEXIM is also looking at the services sector, especially financing the development of branded and rated hotels in line with the Nigerian Tourism Development Master Plan, as well as other services with high export potentials. According to him: “We are looking at the creative arts and entertainment industry because we believe that it’s an industry that has a high growth, employment and foreign exchange earning potentials. It is essentially an area where you can generate a lot of employments for the youths…”
Since the past year, as part of its efforts to boost trade for Nigerian exporters, NEXIM has shown keenness to deepen trade within the ECOWAS sub-region. He informed the Senate Committee that, “…we looked at the status of Nigeria within ECOWAS (Economic Community of the West African States) sub-region, and realized that the population of ECOWAS is over 300 million people with Nigeria constituting about 165 million of that. It became obvious to us that this is the largest market and about the most dominant economy, where every serious investor should show interest to invest….”
Regrettably, Mr. Orya said, there are patent obstacles to enabling Nigeria fully exploit the benefits of this position, especially the issue of trade barriers. This informed the idea of the bank in coming up with an initiative to alleviate the issue of intra-regional trade and integration. Reviewing the trade potentials within the ECOWAS region and the Central Africa region, Mr. Orya decried the unavailability of an efficient sea transportation system that can directly connect the regions. He then painted a simple but powerful illustration of the problems faced by Nigerian exporters, “…
if you have to move your goods from Lagos to Tema port in Ghana by truck, with all the non-tariff barriers etc., it might take you two - six days, but if you have to move your goods from Apapa Port in Nigeria to Tema port in Ghana by sea, it may take you about 60 days. This is because the vessels would first sail directly to their home ports in Europe or South Africa and from there make a trans-shipment of the goods back to Tema Port. Under this kind of scenario there is no way one can deepen trade, because we don’t have our own sea-going cargo vessels….”
He posed to the Committee that if a country like Nigeria does not take steps to see how the trade barrier could be addressed there is no way trade would improve within the region. This prompted NEXIM Bank to come up with an initiative to facilitate a dedicated regional Sealink company which will be private sector driven for the benefit of West and Central African countries with Nigeria getting the most because of the size of its economy.
The goal is to have a regional maritime shipping company that would essentially serve and transport persons and goods between these two neighboring regions. It is important to point that this is line with the provisions of the ECOWAS protocol on Free Movement of Persons, Goods and Services.
He then informed the Committee that NEXIM has come up with a promotional company as a Special Purpose Vehicle that would set up the Regional Sealink company and raise the initial funding requirement of about $61.5 million US dollars in both debt and equity capital. As soon as that money is raised and the company is incorporated the SPV, which was already incorporated in October 2012 would cease to exist. The initial sponsors of the project comprise members of the Federation of West Africa Chamber of Commerce, the members of individual ECOWAS member countries Chambers of Commerce and Industry, a big logistics company based in Douala, called Transimex S.A. Cameroun, among others.
He informed the Committee that the initiative has been presented and embraced by the Nigerian Maritime Administration and Safety Agency, NIMASA, ECOWAS Commission, ECOWAS Parliament and other relevant stakeholders.
He, however, acknowledges that there are immediate challenges to achieving the level of success NEXIM Bank has set in its medium term plan, namely the issue of non-performing loans - NPLs. He restated what he had earlier said on Monday, when he appeared before the House of Representatives Committee on Banking and Currency in defence of the bank’s 2012 Budget that, “Some of the debts, being owed the Bank, span between 10 and 15 years and some of the debtors are banks that were liquidated in 1990’s by the Nigeria Deposit Insurance Corporation.
The bank could only recover N418 million out of about N1.9 billion it planned to recover in 2011. In 2012, we plan to recover N1.3 billion. As soon as we are able to recover that, it will go into our loss and profit account.” He, however, pleaded with the Upper House to assist NEXIM in getting AMCON to write off or buy over some of the toxic debts to enable it clean up its balance-sheet.
Explaining how the bank has been able to function and make profit during the global financial crises, and continues to operate profitably, Mr. Orya sums his answer that NEXIM is ‘taking a holistic approach to its corporate transformation, which entails strategies around adequate capitalisation, adoption of a robust enterprise-wide risk management framework, good corporate governance principles, smarter business processes, clearer focus and compliance with regulations and relevant government policies’.
He never fails to acknowledge the harmonious synergy the bank enjoys with its shareholders – the Central Bank of Nigeria and the Ministry of Finance. As NEXIM moves to actualise its mandate, it is good to recall its mandate: to leverage Government’s targets on development programmes, funding and non-funding activities like risk bearing facilities of non-oil export credit guarantee and insurance as well as market and trade information and value-added export business advisory services.
Judging the budget defence of NEXIM boss at the two chambers of the National Assembly, one may be right to conclude that the over 25 years’ banking experience of Orya has come to bear.
Source: www.sunnewsonline.com/webpages/features/money/2012/feb/09/Money-09-02-2012-001.html
Learn more about Commodities Export in Nigeria & How to benefit from services of NEXIM exportfromnigeria.proboards.com/index.cgi?board=general&action=display&thread=78
It would be recalled that the bank, up until the Roberts Orya era, was run in deficit. The current robust state of the bank is an indication that Nigeria is steadily realising her export promotion targets in the non-oil sector, which have been elusive over the years.
The Managing Director/CEO, during his recent meeting with the Senate Committee on Budget and Insurance to defend the bank’s 2012 Budget at the National Assembly, said NEXIM targets a profit of N1.6 billion, as against the N1.1 billion in the last fiscal year 2011.
At the budget defence, Mr. Orya announced the determination of NEXIM to give an urgent attention to the non-oil (MASS) sectors of the economy – manufacturing, agriculture, solid minerals and services – which it will tap in the hitherto virgin sectors, and propel Nigeria’s economy beyond expectations.
Towards this, he presented a budget projection of N30 billion to promote export-oriented investments in these sectors. Echoing his words: “Forty-four per cent will go to manufacturing, 35.8 per cent, agriculture; 5.6 per cent, solid mineral resources, while services take up 14 per cent.” This will create over 23,923 jobs and generate $229.6 million forex earnings for Nigeria in the 2012 fiscal year through active support of the manufacturing, agricultural, solid mineral and Service sectors of the nation’s economy.
Taking the committee through the business activities of the bank for the year 2011, Mr. Orya explained that what NEXIM has done over the years toward the realization of its mandate was to enhance the contribution of the non-oil sectors to the GDP through funding interventions in the MASS sectors, where the country has high export potentials and comparative advantage. For instance, according to him, in the agricultural sector, NEXIM has funded a lot of Greenfield and start-up projects that have become successful and are published on the CBN’s Top 100 Exporters List.
He informed the committee that so much is happening in the mining sector, where the bank is providing the required assistance to get the industry well structured. Despite the enormous risks, NEXIM is stepping up to its role as a development financial institution, to provide the relevant products to stimulate and attract investment to the sector to make it more viable and attractive for both the commercial banks and every other private entity that is interested to operate there. He explained that a lot of work has gone into charting an investor friendly policy framework for the mining sector in order to ensure full realization of the huge potentials therein, which economic impact would no doubt surpass that of the oil and gas sector.
As part of its mandate, Mr. Orya informed the committee that NEXIM is also looking at the services sector, especially financing the development of branded and rated hotels in line with the Nigerian Tourism Development Master Plan, as well as other services with high export potentials. According to him: “We are looking at the creative arts and entertainment industry because we believe that it’s an industry that has a high growth, employment and foreign exchange earning potentials. It is essentially an area where you can generate a lot of employments for the youths…”
Since the past year, as part of its efforts to boost trade for Nigerian exporters, NEXIM has shown keenness to deepen trade within the ECOWAS sub-region. He informed the Senate Committee that, “…we looked at the status of Nigeria within ECOWAS (Economic Community of the West African States) sub-region, and realized that the population of ECOWAS is over 300 million people with Nigeria constituting about 165 million of that. It became obvious to us that this is the largest market and about the most dominant economy, where every serious investor should show interest to invest….”
Regrettably, Mr. Orya said, there are patent obstacles to enabling Nigeria fully exploit the benefits of this position, especially the issue of trade barriers. This informed the idea of the bank in coming up with an initiative to alleviate the issue of intra-regional trade and integration. Reviewing the trade potentials within the ECOWAS region and the Central Africa region, Mr. Orya decried the unavailability of an efficient sea transportation system that can directly connect the regions. He then painted a simple but powerful illustration of the problems faced by Nigerian exporters, “…
if you have to move your goods from Lagos to Tema port in Ghana by truck, with all the non-tariff barriers etc., it might take you two - six days, but if you have to move your goods from Apapa Port in Nigeria to Tema port in Ghana by sea, it may take you about 60 days. This is because the vessels would first sail directly to their home ports in Europe or South Africa and from there make a trans-shipment of the goods back to Tema Port. Under this kind of scenario there is no way one can deepen trade, because we don’t have our own sea-going cargo vessels….”
He posed to the Committee that if a country like Nigeria does not take steps to see how the trade barrier could be addressed there is no way trade would improve within the region. This prompted NEXIM Bank to come up with an initiative to facilitate a dedicated regional Sealink company which will be private sector driven for the benefit of West and Central African countries with Nigeria getting the most because of the size of its economy.
The goal is to have a regional maritime shipping company that would essentially serve and transport persons and goods between these two neighboring regions. It is important to point that this is line with the provisions of the ECOWAS protocol on Free Movement of Persons, Goods and Services.
He then informed the Committee that NEXIM has come up with a promotional company as a Special Purpose Vehicle that would set up the Regional Sealink company and raise the initial funding requirement of about $61.5 million US dollars in both debt and equity capital. As soon as that money is raised and the company is incorporated the SPV, which was already incorporated in October 2012 would cease to exist. The initial sponsors of the project comprise members of the Federation of West Africa Chamber of Commerce, the members of individual ECOWAS member countries Chambers of Commerce and Industry, a big logistics company based in Douala, called Transimex S.A. Cameroun, among others.
He informed the Committee that the initiative has been presented and embraced by the Nigerian Maritime Administration and Safety Agency, NIMASA, ECOWAS Commission, ECOWAS Parliament and other relevant stakeholders.
He, however, acknowledges that there are immediate challenges to achieving the level of success NEXIM Bank has set in its medium term plan, namely the issue of non-performing loans - NPLs. He restated what he had earlier said on Monday, when he appeared before the House of Representatives Committee on Banking and Currency in defence of the bank’s 2012 Budget that, “Some of the debts, being owed the Bank, span between 10 and 15 years and some of the debtors are banks that were liquidated in 1990’s by the Nigeria Deposit Insurance Corporation.
The bank could only recover N418 million out of about N1.9 billion it planned to recover in 2011. In 2012, we plan to recover N1.3 billion. As soon as we are able to recover that, it will go into our loss and profit account.” He, however, pleaded with the Upper House to assist NEXIM in getting AMCON to write off or buy over some of the toxic debts to enable it clean up its balance-sheet.
Explaining how the bank has been able to function and make profit during the global financial crises, and continues to operate profitably, Mr. Orya sums his answer that NEXIM is ‘taking a holistic approach to its corporate transformation, which entails strategies around adequate capitalisation, adoption of a robust enterprise-wide risk management framework, good corporate governance principles, smarter business processes, clearer focus and compliance with regulations and relevant government policies’.
He never fails to acknowledge the harmonious synergy the bank enjoys with its shareholders – the Central Bank of Nigeria and the Ministry of Finance. As NEXIM moves to actualise its mandate, it is good to recall its mandate: to leverage Government’s targets on development programmes, funding and non-funding activities like risk bearing facilities of non-oil export credit guarantee and insurance as well as market and trade information and value-added export business advisory services.
Judging the budget defence of NEXIM boss at the two chambers of the National Assembly, one may be right to conclude that the over 25 years’ banking experience of Orya has come to bear.
Source: www.sunnewsonline.com/webpages/features/money/2012/feb/09/Money-09-02-2012-001.html
Learn more about Commodities Export in Nigeria & How to benefit from services of NEXIM exportfromnigeria.proboards.com/index.cgi?board=general&action=display&thread=78
