Post by Trade facilitator on Feb 15, 2013 20:48:47 GMT 1
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.
Source: thenationonlineng.net/new/editorial/letters/nexim-and-nigerias-non-oil-export/
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.
Source: thenationonlineng.net/new/editorial/letters/nexim-and-nigerias-non-oil-export/
