Post by Trade Coach on Feb 13, 2012 21:04:13 GMT 1
Mr Roberts Orya assumed the corporate leadership of Nigeria Export-Import (NEXIM) Bank after over 25 years in the banking industry. In this interview with KINGSLEY ALU, he assures that the bank will play its role in the economy even more effectively.
What was the state of affairs in NEXIM before your assumption of office as chief executive?
The success of the Nigerian Export and Import Bank (NEXIM) since 2009 is a product of careful planning; something that had eluded the bank for some time.
My team and I, on coming into office, dedicated ourselves to bringing about a rapid and sustained transformation that has completely changed the fortunes of the Bank.
One significant point to be noted is that, before now, the bank's books were in the 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.
You were recently at the Senate to defend your budget proposals; how did it go?
I was at the Senate Committee on Budget and Insurance to defend the bank's 2012 budget. I made it clear that NEXIM under my leadership targets a profit of N1.6bn as against the N1.1bn in the last fiscal year 2011.
At the budget defence, I announced the determination of NEXIM to give an urgent attention to the non-oil sectors of the economy - Manufacturing, Agriculture, Solid Minerals and Services (MASS)- which will tap into the hitherto virgin sectors and propel Nigeria's economy beyond traditional areas of business. Towards this, we presented a budget projection of N30bn to promote export-oriented investments in these sectors.
Forty-four percent will go to manufacturing, 35.8 percent, agriculture; 5.6 percent, solid mineral resources, while services take 14 percent. This will create over 23,923 jobs and generate $229.6m in foreign exchange 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, I explained that what the Bank has done over the years toward the realization of the its mandate which is 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, 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.
We have intensified support for the mining sector by 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 mining sector to make it more viable and attractive for both the commercial banks and every other private entity that is interested to operate there.
As we speak, 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.
A lot has been said about tourism; are you doing enough to enhance it as a revenue earner for the country?
As part of my mandate, 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. 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 our youths
Are you keen on inter- African trade?
Since the past year, as part of efforts to boost trade for Nigerian exporters, NEXIM has shown keenness to deepen trade within the Economic Community of the West African States (ECOWAS) sub-region. We looked at the status of Nigeria within sub-region, and realized that the population of ECOWAS is over 300 million with Nigeria constituting about 165million of that figure. 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, 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 such as the unavailability of an efficient sea transportation system that can directly connect the regions. Let me paint for you 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. At budget defence I told 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 neighbouring regions. It is important to point out that this line with the provisions of the ECOWAS protocol on Free Movement of Persons, Goods and Services.
What are the intentions of Sealink?
As I informed the Senate Committee, 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 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 2011, 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. The initiative has been presented and embraced by the Nigerian Maritime Administration and Safety Agency, NIMASA, ECOWAS Commission, ECOWAS Parliament and other relevant stakeholders.
What are your major challenges?
Like every other institution in our category, we are realistic enough to accept that there are immediate challenges on our way to achieving the level of success NEXIM Bank has set in its medium term plan, namely the issue of non-performing loans - NPLs. 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 N418m out of about N1.9bn it planned to recover in 2011. In 2012, we plan to recover N1.3bn. As soon as we are able to recover that, it will go into our loss and profit account. We plead with the Senate to assist NEXIM in getting AMCON to write off or buy over some of the toxic debts to enable the bank clean up its balance-sheet.
With this, how was the bank able to return to the path of profitability?
Yes, with this we were able to function and make profit during the global financial crises and have continued to operate profitably because we took a holistic approach in the bank's 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.
I also acknowledge the harmonious synergy the bank enjoys with its shareholders - the Central Bank of Nigeria and the Ministry of Finance which is also part of our 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.
Are you involved in business outside the ECOWAS sub-region?
Of course. We have signed Memorandum of Understanding (MoU) with EXIM Banks of China, India among others and also participate fully in conclaves and conferences of Global Network of Export-Import Banks and Development Finance Institutions (G-NEXID). All these have ensured that even where NEXIM could not provide direct funding assistance, it handholds Nigerian businesses to access funds from these sister agencies. This is in addition to other accounts of how the Bank plans to seek support from the Bank's shareholders to start providing credit insurance and guarantees to buyers of Nigerian goods and services in line with the global best practices in export credit financing. NEXIM should be able to provide trade finance to buyers of Nigerian goods from any country if that importer does not immediately have the funds. We strive to provide financial products not readily provided by other financial institutions. For example, equity, longer-term finances, venture capital and provide risk bearing facilities such as non-oil export credit guarantee, insurance, market, trade information and value-added export business advisory services.
Source: allafrica.com/stories/201202130801.html
Learn more about commodities export in Nigeria @ THE THY GLOBAL INVESTMENT LTD exportfromnigeria.proboards.com/index.cgi?board=general&action=display&thread=78
What was the state of affairs in NEXIM before your assumption of office as chief executive?
The success of the Nigerian Export and Import Bank (NEXIM) since 2009 is a product of careful planning; something that had eluded the bank for some time.
My team and I, on coming into office, dedicated ourselves to bringing about a rapid and sustained transformation that has completely changed the fortunes of the Bank.
One significant point to be noted is that, before now, the bank's books were in the 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.
You were recently at the Senate to defend your budget proposals; how did it go?
I was at the Senate Committee on Budget and Insurance to defend the bank's 2012 budget. I made it clear that NEXIM under my leadership targets a profit of N1.6bn as against the N1.1bn in the last fiscal year 2011.
At the budget defence, I announced the determination of NEXIM to give an urgent attention to the non-oil sectors of the economy - Manufacturing, Agriculture, Solid Minerals and Services (MASS)- which will tap into the hitherto virgin sectors and propel Nigeria's economy beyond traditional areas of business. Towards this, we presented a budget projection of N30bn to promote export-oriented investments in these sectors.
Forty-four percent will go to manufacturing, 35.8 percent, agriculture; 5.6 percent, solid mineral resources, while services take 14 percent. This will create over 23,923 jobs and generate $229.6m in foreign exchange 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, I explained that what the Bank has done over the years toward the realization of the its mandate which is 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, 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.
We have intensified support for the mining sector by 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 mining sector to make it more viable and attractive for both the commercial banks and every other private entity that is interested to operate there.
As we speak, 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.
A lot has been said about tourism; are you doing enough to enhance it as a revenue earner for the country?
As part of my mandate, 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. 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 our youths
Are you keen on inter- African trade?
Since the past year, as part of efforts to boost trade for Nigerian exporters, NEXIM has shown keenness to deepen trade within the Economic Community of the West African States (ECOWAS) sub-region. We looked at the status of Nigeria within sub-region, and realized that the population of ECOWAS is over 300 million with Nigeria constituting about 165million of that figure. 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, 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 such as the unavailability of an efficient sea transportation system that can directly connect the regions. Let me paint for you 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. At budget defence I told 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 neighbouring regions. It is important to point out that this line with the provisions of the ECOWAS protocol on Free Movement of Persons, Goods and Services.
What are the intentions of Sealink?
As I informed the Senate Committee, 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 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 2011, 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. The initiative has been presented and embraced by the Nigerian Maritime Administration and Safety Agency, NIMASA, ECOWAS Commission, ECOWAS Parliament and other relevant stakeholders.
What are your major challenges?
Like every other institution in our category, we are realistic enough to accept that there are immediate challenges on our way to achieving the level of success NEXIM Bank has set in its medium term plan, namely the issue of non-performing loans - NPLs. 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 N418m out of about N1.9bn it planned to recover in 2011. In 2012, we plan to recover N1.3bn. As soon as we are able to recover that, it will go into our loss and profit account. We plead with the Senate to assist NEXIM in getting AMCON to write off or buy over some of the toxic debts to enable the bank clean up its balance-sheet.
With this, how was the bank able to return to the path of profitability?
Yes, with this we were able to function and make profit during the global financial crises and have continued to operate profitably because we took a holistic approach in the bank's 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.
I also acknowledge the harmonious synergy the bank enjoys with its shareholders - the Central Bank of Nigeria and the Ministry of Finance which is also part of our 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.
Are you involved in business outside the ECOWAS sub-region?
Of course. We have signed Memorandum of Understanding (MoU) with EXIM Banks of China, India among others and also participate fully in conclaves and conferences of Global Network of Export-Import Banks and Development Finance Institutions (G-NEXID). All these have ensured that even where NEXIM could not provide direct funding assistance, it handholds Nigerian businesses to access funds from these sister agencies. This is in addition to other accounts of how the Bank plans to seek support from the Bank's shareholders to start providing credit insurance and guarantees to buyers of Nigerian goods and services in line with the global best practices in export credit financing. NEXIM should be able to provide trade finance to buyers of Nigerian goods from any country if that importer does not immediately have the funds. We strive to provide financial products not readily provided by other financial institutions. For example, equity, longer-term finances, venture capital and provide risk bearing facilities such as non-oil export credit guarantee, insurance, market, trade information and value-added export business advisory services.
Source: allafrica.com/stories/201202130801.html
Learn more about commodities export in Nigeria @ THE THY GLOBAL INVESTMENT LTD exportfromnigeria.proboards.com/index.cgi?board=general&action=display&thread=78
