Presentation on theme: "“THE ROLE OF NEXIM BANK IN (NON-OIL) EXPORT DEVELOPMENT IN NIGERIA”"— Presentation transcript:
1“THE ROLE OF NEXIM BANK IN (NON-OIL) EXPORT DEVELOPMENT IN NIGERIA” MANUFACTURINGAGRICULTURESOLID MINERALSSERVICESA PRESENTATION BY THE NIGERIAN EXPORT IMPORT BANK (NEXIM)AT THE NEXIM AND NCAN FINANCE FORUM 2013HELD AT IKEJA, G.R.A., LAGOSON TUESDAY, 23RD APRIL, 2013
2OUTLINE THE NIGERIAN ECONOMY EXTERNAL SECTORPROBLEMS OF NON-OIL EXPORTS IN NIGERIAROLE OF NEXIM IN TRADE FACILITATION, EXPORT PROMOTION AND DEVELOPMENT IN NIGERIAMANDATE AND FUNCTIONSOWNERSHIP STRUCTUREOFFICE LOCATIONSPRODUCT OFFERINGSHOW TO ACCESS NEXIM FACILITIESINDICATIVE TERMS OF NEXIM FACILITIESCONCLUSION
3THE NIGERIAN ECONOMYAccording to CBN, Real GDP growth increased to 7.9% in 2010 from 7.0% in 2009Average Annual Growth rate over the last 5 years ( ) was 6.7%Growth was largely driven by non-oil sector which grew by 8.5%Of the 8.5%, the relative contribution of different sectors include:Agric %Services %Trade - 2.0%Building/ Const %
9THE ROLE OF NEXIM BANK IN TRADE FACILITATION IN NIGERIA. TRADE FACILITATION MAY BE SIMPLY DEFINED AS “THE SIMPLIFICATION & HARMONIZATION, AS WELL AS TIME & COST REDUCTION OF TRANSACTIONS”.NEXIM BANK’S CRITICAL ROLE IN TRADE FACILITATION, IS BEST ILLUSTRADED IN “TIME & COST REDUCTION OF TRANSACTIONS”. THIS IS ACHIEVED THROUGH THE PROVISION OF FINANCE, RISK BEARING FACILITIES & ADVISORY SERVICES TO THE NON-OIL EXPORT SECTOR.COMPETITIVE COST OF FUNDS, LONGER TENURED FACILITIES & QUICK TURN AROUND TIME ARE KEY.
10PROBLEMS OF NON-OIL EXPORTS IN NIGERIA Production problemsAgricultural production still characterised by poor farming system / limited adoption of improved technologyLimited knowledge / technology for Processing and packaging of semi-manufactured goods to meet international standardsGlobal market is moving away from primary productsPoor InfrastructurePoor access to finance at all stages across the export value chain i.e. from Production to delivery of goods abroad.
11ISSUES IN EXPORT FINANCE Credit and Finance is the life and blood of any business, whether domestic or internationalExport finance is important due to peculiarities of export trade:Export trade is sensitive toQuality of productPriceDelivery schedulesPayment terms (must be flexible)Production and manufacture of goods for export take time and there is need for long term funds at reduced costMerchandise exports require finance that satisfy most of the above criteria
12WHAT IS EXPORT FINANCEExport Finance is the total fund available to an exporter to execute an export order/contractThis includes the exporters net worth, debts, subsidies, grants, etcExport Finance is also an avenue to offer to buyers important competitive advantage so as to gain businessWhile export finance takes various forms and types, its categorisation may be done according topurposeStage of export operationTenorAn exporter may need a combination of the different types of financial assistance, hence must be mindful of cost
13EXPORT FINANCE (CONT’D) Export Finance constitute critical ingredient in international tradeIn general, tariff/ non-tariff barriers and absence of transport infrastructure are regarded as barriers to tradeHowever limited access/ high cost of finance as well as lack of guarantees or insurance covers are likely to hinder trade and export potentials of any country.
15NEXIM’S ROLE IN TRADE FACILITATION & EXPORT FINANCE NEXIM MANDATE:NEXIM was established by Act 38 of 1991 to provide finance, risk mitigating facilities and trade information as well as advisory services in support of exports to the Nigerian export community. The main statutory functions of the Bank include the:Provision of export credit guarantee and export credit insurance facilities to its clients;Provision of credit in local and foreign currency to its clients in support of exports;Establishment and management of funds connected with exports;Provision of trade information and export advisory service in support of export business; andProvision of investment guarantees and investment insurance facilities.
16NEXIM’S ROLE IN EXPORT FINANCE: OWNERSHIP:NEXIM is wholly owned by the Federal Government of Nigeria, with shareholding equally subscribed to by the Central Bank of Nigeria (CBN) and Ministry of Finance Incorporate (MOFI) as followsCentral Bank of Nigeria (CBN) N25.00 billionMinistry of Finance Incorporate (MOFI) N25.00 billionN50.00 billion
17NEXIM’S ROLE IN EXPORT FINANCE & TRADE FACILITATION: OFFICE LOCATIONS:HEAD OFFICE:NEXIM House, Central Business District, Abuja.AREA OFFICES:Lagos Area OfficeCalabar Area OfficeKano Area OfficeThe Bank’s offices are adequately staffed and equipped to meet customers’ demands for its products and services.
18NEXIM’S ROLE IN EXPORT FINANCE: OUR TARGET SECTORS NEXIM Bank will aggressively pursue business opportunities across the key sub-sectors within the Manufacturing Sector.…
19NEXIM’S ROLE IN EXPORT FINANCE: OUR TARGET SECTORS (CONT’D) NEXIM Bank will aggressively pursue business opportunities across the key sub-sectors within the Agriculture Sector..…
20NEXIM’S ROLE IN EXPORT FINANCE: OUR TARGET SECTORS (CONT’D) NEXIM Bank will aggressively pursue business opportunities across the key sub-sectors within the Solid Minerals Sector..…
21NEXIM’S ROLE IN EXPORT FINANCE: OUR TARGET SECTORS (CONT’D) NEXIM Bank will aggressively pursue business opportunities across the key sub-sectors within the Services Sector..…
22NEXIM’S ROLE IN EXPORT FINANCE: PRODUCT OFFERINGS A) EXPORT FINANCERediscounting & Refinancing Facility (RRF): designed to assist banks to provide pre and post-shipment finance in local currency to their export clients.Stocking Facility (SF): Provides financing in local currency to enable manufacturers stock seasonal inputs required to keep production at optimal levels of production throughout the year.Local Input Facility (LIF): Supports manufacturers of export products with medium to long term finance for the acquisition of new plants; expansion of existing capacity; and procurement of spare parts, as well as packaging raw materials amongst others.Direct Lending Facility (DLF): is a funding variant that allows for direct provision of short to long-term export credits to eligible exporters. The loan obligor in this case is the exporter.
23NEXIM’S ROLE IN EXPORT FINANCE: PRODUCT OFFERINGS (CONT’D) A) EXPORT FINANCE (CONT’D)ECOWAS Trade Support Facility (ETSF): This was developed to assist Exporters take advantage of the huge potentials that exist within the ECOWAS corridor. Ultimately, ETSF will promote formal trade, deepen payment system, economic integration and cooperation amongst countries in the ECOWAS Sub-region.Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS): is intended to address issues regarding the institution of credible structures, attract investment in the development of content and infrastructure in the media and entertainment sector as well as improvement in production standards, distribution, marketing and exhibition standards
24NEXIM’S ROLE IN EXPORT FINANCE: PRODUCT OFFERINGS (CONT’D) B) IMPORT FINANCE:Foreign Input Facility (FIF): provides manufacturing exporter with foreign exchange for the importation of raw materials, packaging materials and capital equipment needed for production of goods specially designed for export. It is a facility made available to exporters in foreign currency through their banks and is therefore repayable in foreign currency.Medium-Term Export Credit Guarantee Facility: This is available as Medium-term Export Credit Guarantee which provide effective tool for the management of risks associated with export financing.24
25NEXIM’S ROLE IN EXPORT FINANCE: PRODUCT OFFERINGS (CONT’D) C) RISK BEARING SERVICESExport Credit Guarantee Facility (ECGF): designed This is designedfor the acquisition of industrial plant and machinery on determined payment terms and the obtaining of proceeds of exports in advance by exporters such as Advance Payment Guarantee (APG).Export Credit Insurance Facility (ECIF): This is designed to protect exporters in Nigeria against the risk of non-payment for goods and services exported on credit terms.Risks covered include commercial, economic or political riskECOWAS ISRT & THE SEA LINK PROJECT
26NEXIM’S ROLE IN EXPORT FINANCE: PRODUCT OFFERINGS (CONT’D) D) EXPORT SUPPORT SERVICESBusiness and Financial Advisory Services: NEXIM offers export and general business advisory services to existing and potential clients of the Bank. Through this service, NEXIM sources Lines of Credit (LOC) for qualified projects in Nigeria from multilateral institutions (such as the African Export Import Bank), Export Credit Agencies and other financial institutions. It also arranges loan and/or guarantee syndications with other financial institutions for specific projects.Trade and Market Information: To enhance the profitability of export transactions, the Bank also provide trade and market information and advice on export-import markets, products, pricing, etc. based on enquires received.26
27NEXIM’S ROLE IN EXPORT FINANCE: HOW TO ACCESS NEXIM FACILITIES ELIGIBILITY CRITERIAThe Bank’s facilities are available to any registered, creditworthy export Company/Cooperative Society, incorporated in Nigeria, registered with the Nigerian Export Promotion Council (NEPC).REQUIRED DOCUMENTATION INCLUDE:Application FormCertified True Copy of Certificate of Incorporation, Certified True copies of CO2 & CO7; and Memorandum & Articles of Association;Current three year tax clearance;Three (3) year Audited Accounts and most recent management accounts, where applicableFeasibility Study/Business Plan including Projected Cash flow, P&L andBoard Resolution Authorizing Company to borrow and Letter of Authorization for NEXIM to seek information on Company;Registration with NEPC;Proforma Invoice; Export Contract or MOU and Evidence of past export(s) if any;Valuation Report of the proposed security;
28NEXIM’S ROLE IN EXPORT FINANCE: HOW TO ACCESS NEXIM FACILITIES TENOR: Short < 12 months Medium > 12 months < 60 months Long > 60 months INTEREST RATE: NEXIM provides all its facilities/products at below market rates but, on the average, the applicable rates are between 10% per annum and 15% per annum for the short-term Inter-bank and Direct Lending facilities.
29ROLE OF NEXIM IN EXPORT PROMOTION AND DEVELOPMENT ANNUAL STATISTICAL DATA OF NEXIM INTERVENTION IN THE EXPORT SECTOR FOR THE PERIOD COVERING JANUARY 1, 2005 TO OCTOBER 31, 2011
30CONCLUSIONThe Nigerian Export-Import Bank has since inception been deeply involved in Trade Facilitation through the provision of Finance, Risk Bearing Facilities, Financial Advisory Services & Trade Information. The Bank understands that Trade Facilitation is actualized through Simplification & Harmonization, as well as Time & Cost Reduction of Transactions. Going forward, NEXIM Bank shall continually improve its products and services in order to ensure more efficiency in the Bank’s contribution to Trade Facilitation in Nigeria. However, it is pertinent to note that Nigeria’s non-oil export potentials are far from being significantly tapped/explored . We therefore implore you to avail your selves of NEXIM facilities and take advantage of the numerous business and investment opportunities that abound in our dear Nation.
31OUR CONTACTHead Office Plot 975, Cadastral Zone A0, Central Business District, Abuja Website: Branches: Lagos Area Office, Calabar Area Office Kano Area Office Old Niger House, 163/165, Calabar Free Trade Zone Fatima House, Broad Street, Cross River State Murtala Mohammed Way, Lagos State Kano State