NEXIM and Nigeria’s non-oil exports drive

In broad terms, the Bank has the responsibility of facilitating the diversification of the country’s export and revenue base and invariably the country’s over dependence on a mono product – oil. This is undertaken through the provision of finance, risk bearing, as well as trade information and value-added business advisory services to companies engaged in […]

In broad terms, the Bank has the responsibility of facilitating the diversification of the country’s export and revenue base and invariably the country’s over dependence on a mono product – oil. This is undertaken through the provision of finance, risk bearing, as well as trade information and value-added business advisory services to companies engaged in the production of goods and services for export.

Pursuant to its mandate, NEXIM Bank is poised to become the leading African Export Development Bank with the target to operate in four critical sectors of the Nigerian economy namely, Manufacturing, Agriculture, Solid Minerals, and Services whose acronym is known as MASS agenda of the NEXIM Bank

NEXIM takes developmental rather than a purely financial-return maximisation approach. It has consistently focused on the identification, development and financing of projects that leads to national objectives being met through encouraging private sector development. NEXIM has consistently provided financial products not readily provided by other financial institutions e.g. equity, longer-term finances, venture capital, etc. It has also undertaken and managed a higher risk profile while playing a catalytic role, thereby encouraging export-oriented investments which move the economy in the desired direction

More recently, NEXIM took its commitment to deepen trade within the region to a higher level with the introduction of dedicated sea-going vessels. The first board meeting of The Sealink Promotional Company Limited took place on Saturday 10th December 2011 at Transimex Headquarters in Douala Port, Cameroon. Prior to the meeting, a Special Purpose Vehicle (SPV) was registered in Nigeria with the original Memorandum and Articles of Incorporation of the company filed at the Corporate Affairs Commission, Abuja, on 10th November, 2011. The Sealink project will help Nigerian manufacturers and exporters to have a structured access to the West and Central African markets in the short term. In the medium and long term, it would guarantee regular exports of Nigeria’s goods and services as the majority of consumer products and raw materials for production in the ECOWAS markets originate from Nigeria. More importantly, the initiative will give added impetus to Nigerian traders to access regional markets, thereby boosting manufacturing, forex earnings and job creation at home. The coordinating consultant of the project, Mr. Tidiane Traore, said the Sea Link Feasibility Study had been presented to the Gambian Port Authority, the Compagnie Beninoise de Navigation Maritime (COBENAM) – Benin and Nigeria Shippers Council. Also presentations have been made to the ECOWAS Commission, ECOWAS Parliament, CBN, Nigeria Maritime Authority, World Bank, African Development Bank, and the Union of African Shippers Council.

He told the board members that proposals have been sent out to donors for funding and that discussions are ongoing with the UNDP-funded African Training and Management Services (ATMS)/African Management Services Company (AMSCO) which assists in providing professional management and related services to selected private companies and commercially operated public enterprises. Current members of the SPV Board are drawn from the Federation of West African Chambers of Commerce and Industries (FEWACCI), TRANSIMEX CAMEROUN which is a logistics company created in 1998 to complete logistics services for national and international clients. NEXIM Managing Director, Roberts Orya, during his presentation of the project to ECOWAS Parliament a few days ago, precisely on December 7, said the Sealink Project would be a public-private partnership (PPP) initiative to realise the objectives of the Protocol on the Free Movement of Persons, Goods and Services as well as Right of Residence and Establishment signed on 29th May 1979. NEXIM Bank aims to deepen trade among West African states and reduce the present high cost of shipping goods by sea along the ECOWAS and Central African coastlines. Orya’s vision on Nigeria’s economic drive was captured when he was invited to the ECOWAS Parliament presided over by Nigeria’s Deputy Senate President and Speaker of the ECOWAS Parliament, Ike Ekweremadu, to present the strategic initiative of the bank through the Regional Sealink Project.

He said, “Our vision is to ensure millions of our people have decent employment opportunities and better living conditions. We deserve an ECOWAS which has modern infrastructure, vibrant economy and where the quality of life is high.” The project has been embraced by the ECOWAS Commission and the Federation of West African Chambers of Commerce and Industries (FEWACCI) as a platform to realise the objectives of the Protocol on the Free Movement of Persons, Goods and Services as well as Right of Residence and Establishment which was signed on 29th May 1979. Mr. Orya said presently the cost of shipping goods by sea along the coastline is prohibitive. Consignments that would ordinarily take one to three days by road between West African destinations often take three to eight weeks, due to trans-shipment arrangements through Europe or South Africa because of the non-existence of direct coastal sea links. This is beside freights and other costs that are geometrically increased as a result of excessive transit time, which makes Intra-ECOWAS trade non-competitive. These constraints make costs of West and Central Africa transport and logistics one of the highest in the World. The Sealink Project would complement the ECOWAS Trade Liberalization Scheme (ETLS) for which NEXIM Bank is the national guarantor. Under the scheme, goods produced within an ECOWAS Member State were to be granted duty free treatment in all other Member States. Goods entering or exiting the ECOWAS should receive duty free treatment, while in transit, and only to be assessed for duties upon entering the country of destination.

The NEXIM MD prayed the ECOWAS Parliament to endorse the proposed regional Sealink project and provide financial contribution/grants to the promotional company (SPCL) to support the funding of its activities in line with projected funding costs / requirements. NEXIM Bank has also presented its scorecard for 2011. Amongst other milestone achievements, its interventions to support the non-oil export sector are on track to reach N37b by end of Q4 2011, an impressive increase of 147% over 2010.

Nwam, a financial analyst, wrote from Abuja