Post by Trade facilitator on Oct 20, 2013 18:35:04 GMT 1
The good times Nigerian farmers and exporters of agricultural products have been waiting for have been around for some time now with the special fund for cassava export, a special product of the Nigerian Export Import (NEXIM) Bank.
Discerning Nigerian exporters have been exploiting this NEXIM Bank’s funding window to boost their trade.
In the light of federal government’s desire to diversify the economy using agriculture, the uniqueness of this special fund is worth devoting some time to, more so, given the large number of cassava farmers in Nigeria.
According to the Dutch Agricultural Development and Trading Company (DATCO), Nigeria is the largest cassava producer in the world.
“Nigeria’s cassava production is by far the largest in the world; a third more than production in Brazil and almost double the production of Indonesia and Thailand.”
In Africa, DATCO disclosed that “cassava production in the Democratic Republic of the Congo, Ghana, Madagascar, Mozambique, Tanzania and Uganda appears small in comparison to Nigeria’s substantial output.”
The Dutch company said nearly 90 per cent of cassava production in Nigeria is for domestic food production and produced by smallholder farmers. Production yields are still extremely low and Nigeria could easily double its production.
“On a per capita basis, North Central is the highest producing state at .72 tonnes/per person in 2002, followed by South East (.56), South South (.47), South West (.34), North West (.10) and North East (.01). National per capita production of cassava is .32 tonne/per person,” the company said.
From the above data, the special fund for cassava export was well thought out to support export of the product to countries where it is in high demand like China and ultimately put foreign currency in the hands of the exporters and the farmers.
Eligibility for the fund.
According to NEXIM Bank, the exporter who wants to access the fund must be a registered creditworthy export company/cooperative society provided that such company/cooperative society is incorporated in Nigeria and meets other statutory requirements to be availed the facility.
The applicant must establish that the loan will develop or expand its cassava export business.
Collateral Requirements
In addition to the commodity being used as collateral through the use of reputable collateral/warehouse managers, the bank shall also secure the facility through one or a combination of the following:
Assignments of the underlying export receivables to NEXIM.
First legal charge on export item (stock).
Personal and several guarantees of the promoters and sponsors.
Guarantee of the National Association of Cassava Exporters of Nigeria.
Any other collateral, as may be determined by the bank from time to time.
Documentation
Application
In addition to the requirements under the eligibility criteria, a company/cooperative society seeking to benefit from the facility shall forward a formal application to NEXIM accompanied by the following documents:
copies of the certificate of incorporation.
copies of memorandum and articles of association certified by the Corporate Affairs Commission (CAC);
forms CO2 and CO7 certified by the CAC;
audited accounts for the last three (3) years and the most recent management account where available;
a board resolution of the company/cooperative society to borrow from NEXIM;
a letter from applicant authorising NEXIM to obtain any information about the company/cooperative society;
pro-forma invoice(s)/contract orders;
full details of any facility obtained elsewhere, including collaterals, liens, etc;
registration with the NEPC;
duly executed authorised signature mandate cards;
any other as may be required by NEXIM.
Disbursement
NEXIM shall disburse approved funds upon fulfillment of all conditions precedent to draw down. Disbursements shall be as agreed between the beneficiary and NEXIM. NEXIM shall support each transaction presented under this window up to 80 per cent of the naira equivalent of the cost of executing the underlying export order.
Other Conditions
NEXIM shall undertake periodic visits to the beneficiary companies/cooperative societies to ensure adherence to the conditions of the loan.
NEXIM reserves the right to recall the loan if the exporter is found not to have complied with the set conditions during monitoring.
All beneficiaries of the cassava facility shall be required to submit monthly declarations of performance of export contracts and repatriation of proceeds to NEXIM.
Note On NEXIM Bank
The NEXIM Bank was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a share capital of N50, 000,000,000 (fifty billion naira) held equally by the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria (CBN). The Bank which replaced the Nigerian Export Credit Guarantee & Insurance Corporation earlier set up under Act 15 of 1988, has the following main statutory functions:- provision of export credit guarantee and export credit insurance facilities to its clients.
- provision of credit in local currency to its clients in support of exports.
- establishment and management of funds connected with exports.
- maintenance of a foreign exchange revolving fund for lending to exporters who need to import foreign inputs to facilitate export production.
- maintenance of a trade information system in support of export business.
- provision of domestic credit insurance where such a facility is likely to assist exports.
The Bank 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.
Source: leadership.ng/news/120913/special-cassava-export-credit-facility
Discerning Nigerian exporters have been exploiting this NEXIM Bank’s funding window to boost their trade.
In the light of federal government’s desire to diversify the economy using agriculture, the uniqueness of this special fund is worth devoting some time to, more so, given the large number of cassava farmers in Nigeria.
According to the Dutch Agricultural Development and Trading Company (DATCO), Nigeria is the largest cassava producer in the world.
“Nigeria’s cassava production is by far the largest in the world; a third more than production in Brazil and almost double the production of Indonesia and Thailand.”
In Africa, DATCO disclosed that “cassava production in the Democratic Republic of the Congo, Ghana, Madagascar, Mozambique, Tanzania and Uganda appears small in comparison to Nigeria’s substantial output.”
The Dutch company said nearly 90 per cent of cassava production in Nigeria is for domestic food production and produced by smallholder farmers. Production yields are still extremely low and Nigeria could easily double its production.
“On a per capita basis, North Central is the highest producing state at .72 tonnes/per person in 2002, followed by South East (.56), South South (.47), South West (.34), North West (.10) and North East (.01). National per capita production of cassava is .32 tonne/per person,” the company said.
From the above data, the special fund for cassava export was well thought out to support export of the product to countries where it is in high demand like China and ultimately put foreign currency in the hands of the exporters and the farmers.
Eligibility for the fund.
According to NEXIM Bank, the exporter who wants to access the fund must be a registered creditworthy export company/cooperative society provided that such company/cooperative society is incorporated in Nigeria and meets other statutory requirements to be availed the facility.
The applicant must establish that the loan will develop or expand its cassava export business.
Collateral Requirements
In addition to the commodity being used as collateral through the use of reputable collateral/warehouse managers, the bank shall also secure the facility through one or a combination of the following:
Assignments of the underlying export receivables to NEXIM.
First legal charge on export item (stock).
Personal and several guarantees of the promoters and sponsors.
Guarantee of the National Association of Cassava Exporters of Nigeria.
Any other collateral, as may be determined by the bank from time to time.
Documentation
Application
In addition to the requirements under the eligibility criteria, a company/cooperative society seeking to benefit from the facility shall forward a formal application to NEXIM accompanied by the following documents:
copies of the certificate of incorporation.
copies of memorandum and articles of association certified by the Corporate Affairs Commission (CAC);
forms CO2 and CO7 certified by the CAC;
audited accounts for the last three (3) years and the most recent management account where available;
a board resolution of the company/cooperative society to borrow from NEXIM;
a letter from applicant authorising NEXIM to obtain any information about the company/cooperative society;
pro-forma invoice(s)/contract orders;
full details of any facility obtained elsewhere, including collaterals, liens, etc;
registration with the NEPC;
duly executed authorised signature mandate cards;
any other as may be required by NEXIM.
Disbursement
NEXIM shall disburse approved funds upon fulfillment of all conditions precedent to draw down. Disbursements shall be as agreed between the beneficiary and NEXIM. NEXIM shall support each transaction presented under this window up to 80 per cent of the naira equivalent of the cost of executing the underlying export order.
Other Conditions
NEXIM shall undertake periodic visits to the beneficiary companies/cooperative societies to ensure adherence to the conditions of the loan.
NEXIM reserves the right to recall the loan if the exporter is found not to have complied with the set conditions during monitoring.
All beneficiaries of the cassava facility shall be required to submit monthly declarations of performance of export contracts and repatriation of proceeds to NEXIM.
Note On NEXIM Bank
The NEXIM Bank was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a share capital of N50, 000,000,000 (fifty billion naira) held equally by the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria (CBN). The Bank which replaced the Nigerian Export Credit Guarantee & Insurance Corporation earlier set up under Act 15 of 1988, has the following main statutory functions:- provision of export credit guarantee and export credit insurance facilities to its clients.
- provision of credit in local currency to its clients in support of exports.
- establishment and management of funds connected with exports.
- maintenance of a foreign exchange revolving fund for lending to exporters who need to import foreign inputs to facilitate export production.
- maintenance of a trade information system in support of export business.
- provision of domestic credit insurance where such a facility is likely to assist exports.
The Bank 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.
Source: leadership.ng/news/120913/special-cassava-export-credit-facility
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