•Generates $325m non-oil exports

•Created 24,139 jobs

•Engages Indian consultants to study Nollywood financing

THE Nigerian Export-Import (NEXIM) Bank supported Nigeria’s non-oil sector to the tune of N40.217 billion between 2009 and May 2014, and created over 24,139 direct jobs in the process.

Data available to Financial Vanguard showed that the bank spent N16.35 billion or about 40 per cent of the total amount in support of the manufacturing sector of the economy and N8.61 billion on agro-processing.

The data further showed that the bank, in support of solid minerals, disbursed N2.7 billion and another N12.544 billion on the services sector. A further breakdown of the bank’s intervention in the economy and in pursuit of its core mandate of trade finance showed that between August and December 2009, it financed exports worth N1 billion and sustained 606 jobs while assisting exporters to generate $8.408 million.

In 2010, NEXIM financed export trade valued at about N5.655 billion. It further provided trade guarantee of $21 million to exporters which created about 5,298 jobs and generated $73.406 million at the end of 2010. In the same vein, in 2011, the bank increased its export financing to N7.588 billion and provided a guarantee of $6.3 million to exporters. This resulted in the creation of 5,124 jobs in 2011 and foreign exchange earnings of $68.051 million.

According to the bank’s official figures, in 2012, its trade finance was in the region of N7.3 billion which saw Nigeria earning $58.655 million, with 4,386 new jobs created. According to NEXIM records, in 2013, the bank assisted in financing N9.435 billion worth of exports from Nigeria which resulted again in the creation of an estimated 5, 661 jobs and foreign exchange earnings of $75.746 million. In the first five months of 2014, the bank spent N5.106 billion financing non-oil export and has already provided $27.3 million in guarantee to exporters. It is estimated that about 24,139 jobs have been created this year alone through the bank’s intervention in non-oil exports.

Confirming growth in non-oil exports, the Central Bank of Nigeria said in its 2013 annual report that Nigeria’s non-oil exports that year reached $2.97 billion by year-end, up from $2.56 billion recorded in 2012, a 16 per cent increase. In addition, non-oil exports to members of the Economic Community of West African States (ECOWAS) reported a remarkable improvement of 20 per cent, with a total value of $375.339 million, as against $312.478 million recorded in 2012. This is also a huge improvement from $276.527 million reported in 2011.

Cocoa and cocoa preparations have continued to dominate the top 10 products exported from Nigeria to different parts of the world, according to the report, during the interactive session between the NEPC and Manufacturers Association of Nigeria Export Promotion Group (MANEG). In 2013, for instance, a total of $758,640,303 worth of cocoa and cocoa preparations were exported, translating to 36 per cent of world export. This was followed by sheep, goat skin and leather, sesame seeds, aluminum, rubber, tobacco products, cotton yarn, and woven fabrics. Others included copper, cashew nuts and edible nuts, prawn, shrimps, fish and crustaceans. Nigeria is currently exporting tobacco products, plastics and rubber footwear, noodles and biscuits, poly bags, milk products, iron and steel, insecticides, beverages, tomato paste and fruit juice to African countries like Ghana, Niger, Togo, Benin Republic, Burkina Faso, Guinea, Mali, among others.

Giving insight into the bank’s operations, the Managing Director, Mr. Roberts U. Orya said:

“Arising from numerous challenges faced by traders in moving goods by road within the sub-region, NEXIM Bank, as a trade facilitating agency, initiated and is currently facilitating the establishment of a transnational shipping company in collaboration with the organized private sector associations in West and Central Africa in partnership with the Federation of West African Chambers of Commerce and Industries (FEWACCI) and Transimex S. A Cameroun. The proposed Sealink project is aimed at mitigating current non-tariff barriers and high logistics costs that have hindered the growth of intra-regional trade and competitiveness of Nigerian manufactured exports regionally.

“Though initiated and largely facilitated by NEXIM, the Sealink project is essentially a Public-Private Partnership initiative and the Private Placement for the raising of US$60 million is currently on-going, with application list closing on 30^th June, 2014, while the shipping company is expected to commence operations within the fourth quarter of this year. The offer is being handled by FBN Capital, Nigeria (Issuing House) and SGI, Benin Republic (placement agents). This laudable initiative has been endorsed by the ECOWAS Commission and is being technically supported by the African Development Bank (AfDB), the Directorate of Technical Cooperation in Africa, Maritime Organisation of West and Central Africa (MOWCA) and the Nigerian Shippers’ Council, amongst others.”

NEXIM, between August 2009 and May 2014, through its facilities would facilitate the generation of estimated foreign exchange earnings of $325.25 million annually.”

Orya said: “With the turnaround in the bank’s performance, management ensured an appreciable return on the equity investment of the shareholders. Accordingly, a dividend for the 2010 financial year performance was declared and paid, which was the first time since 2003 when dividend was last paid. Dividend for 2011 has also been declared and paid, while that of 2012 is in the process of being approved by the Board of Directors.

“The bank in the period under review achieved a cumulative loan recovery of N1.96 billion. Loan recovery continues to be a major focus of management, with renewed and aggressive measures put in place to recover delinquent loans. In that regard, a Remedial Management Department has been specifically created to intensify the bank’s debt recovery drive and ensure that its portfolio remains healthy, through timely remedial actions and other measures to address the early warning signals. The ratio of NPL has reduced from 72 per cent in August 2009 to 14.95 per cent as at April 2014.”

He added: “The bank supported Nigerian exporters majorly the small and medium enterprises (SMEs) with some engaged in Greenfield projects, to the tune of N35.46 billion and issued guarantees valued at $27.30 million between August 2009 and May 2014. These interventions were in our target sectors with high growth potentials of Manufacturing, Agro-processing, Solid Minerals and Services [MASS Agenda].

 “Within 16 months of assumption of duty, the management had turned around the fortunes of the bank and ensured that it is a profit rather than a loss–making organisation with an impressive performance in year 2010, with an audited profit of N189.00 million as against the loss of N5.460 billion incurred in 2009. This impressive profit-making trend has continued since then. It is gratifying to note that since inception of the bank in 1991, this is the first time ever that the bank has made profit consistently and consecutively for four years from 2010-2013 and declared dividends for its two shareholders – the Central Bank of Nigeria and Federal Ministry of Finance Incorporated.

Introduction of the ECOWAS Trade Support Facility (ETSF)

He said: “In order to capture the huge informal intra-regional trade, the ECOWAS Trade Support Facility (ETSF) was introduced and designed toward improving the current trade level of less than 12 per cent and deepening the volume of recorded/formal trade within the Sub-region, as well as fostering the implementation of Government’s Trade Policy and regional integration policies like the ECOWAS Trade Liberalisation Scheme (ETLS), among others. Specifically, the ETSF aims at: facilitating formal/recorded trade within ECOWAS sub-region; deepening intra-regional payment system; increasing Nigeria’s trade flows within ECOWAS (as the dominant trading partner) from the current level of 8.5 per cent of total non-oil exports; broadening trade and market access for Nigerian goods and services, especially manufactured goods; promoting the development of SMEs/cross border traders and facilitating their integration into the formal sector of the economy, and in the process, facilitating their access to credit.”

Support for the Creative Arts and Entertainment Industry

According to Orya: “In furtherance of government’s policy initiatives for strengthening the Creative Arts and Entertainment industry, the bank supported the industry through funding intervention with lending commitments of about N1 billion in the industry’s various value chains in the last three years. The bank’s funding intervention in the sector is intended to address issues regarding the establishment of credible structures, attract investment in the development of content and infrastructure as well as facilitate improvement in production standards, distribution, and marketing and exhibition standards.

On its developmental role to support capacity-building, the bank had undertaken the following;

“Commissioned EXIM India to undertake a study to review the industry and recommend best financing programmes in line with global best practices / standards, which led to the development of the operating guidelines for financing projects in the sector.

Sponsorships of various capacity-building programmes, events and film festivals such as Zuma Film Festival, BOBTV African Film & TV Programmes Expo, Eko International Film Festival, Nigeria Music Video Awards, Nigerian Copyright Commission (NCC) Stakeholders’ Forum on review of the Copyright Law, sponsorships of Nigerian Pavilions at Cannes International Film Festival, France in partnership with the Nigerian Film Corporation and DISCOP Africa, South Africa to showcase Nigeria’s creative talent and attract investment capital and partnerships.

Partnerships with Federal Ministry of Culture and National Orientation on the 1^st National Policy Dialogue on the Development of the Creative / Entertainment Industries in Nigeria, British Council on Creative Industry Expo and Mapping of the Industry.”

He said the bank is currently engaged in policy dialogues with development partners, relevant regulatory and statutory institutions in the entertainment value-chain on ways of improving industry framework /structures on issues relating to access to finance monetizing intellectual property/copyrights and risk-mitigating instruments.