NEXIM Bank, Vision 2020 and beyond

In Nigeria, the unsettled question of integrity is to some extent a scarce resource, with a negative trade and business consequence on Nigerian businessmen and women. Our once sprouting integrity and business trust is seeking a rebirth. Men and women are on the fast lane and in the process crucifying the values upon which international […]

In Nigeria, the unsettled question of integrity is to some extent a scarce resource, with a negative trade and business consequence on Nigerian businessmen and women. Our once sprouting integrity and business trust is seeking a rebirth. Men and women are on the fast lane and in the process crucifying the values upon which international and even domestic businesses grow. Although “rebranding” may be doing some damage control, the process of reviving international confidence is too slow for our 2020 destination.    

Of late, joint ventures between Nigerians and foreign partners are becoming rare occurrences. It is clearly the case that, at the moment, joint ventures are still sprouting as usual mostly within the petroleum industry. The reason is simple: ventures in the petroleum sector are mostly entered into with official consent of government through the Nigerian National Petroleum Corporation. The implication of this development on the nation’s economy prospects is grave. One institution that can reconstruct this partnership and indeed stimulate a favourable international and domestic trade is the Nigerian Export – Import (Nexim) bank.

Minister of Finance Dr Mansur Mukhtar clearly understands the strategic position NEXIM Bank occupies in any significant step towards economic development of the country. The Bank he admits is the “arrow head in government’s drive to boost exports and diversify the economy”. Diversifying the economy in a country where about 90 percent of revenue inflow comes from a depleting source like oil is a must, for the economic health of the nation

Established by the provisions of an Act of parliament Act 38 of 1991, Nexim bank is enlisted to drive the foreign trade policy of the federal government of Nigeria. It is also expected to create jobs and to help drive the export chain towards achieving favourable balance of trade for the country.

So far, Nexim bank Managing Director/Chief Executive Officer Mr. Roberts Orya, revealed recently that the bank has granted loans to the tune of about N56 billion and created 20,000 jobs since inception in1991. For a bank that is expected to boost the nation’s foreign trade and granting the enormous economic and trade opportunities existing within the African continent, Europe, Asia and America , among others, that loan portfolio is grossly inadequate.

It is this contentious disconnect that raises doubt over the propriety of the charge by Finance Minister when he said “Nigerian export – import bank must wake up to its responsibilities and show itself as a strong instrument of government and a dependable partner to individual and corporate bodies desirous of taking advantage of the abundant opportunities in export trade.”

The inability of the country to lend financial muscle to its entrepreneurs to quickly rise to the challenge and take over the viable markets and opportunities on the African continent clearly questions our commitment and vision for growth. It is equally worrisome in the face of unending unfavourable balance of trade between Nigeria and both developed and developing nations. The fact is that poor financing has created a situation where Nexim Bank’s plan to mobilize resources to support a minimum of 40 % growth rate in export financing on a year-on-year basis is under the circumstance unrealisable.

This development has led to a situation where our raw materials in the agricultural sector, for instance, have continued to waste or are being carted away at cheap prices while we continue to spend billions of naira on importation of finished products extracted from these raw materials. For instance, between 2006 and 2007 (one year) Nigeria imported 28,000 tonnes of fruit juice concentrates worth N150 billion.     

Recently, Chairman Board of Trustees National Agricultural Foundation of Nigeria (NAFN) Alhaji Abdullahi Adamu lamented that another N450 billion is also spent annually on food importation into the country. Rice importation alone costs the Nigeria more than N60 billion annually. These are disturbing signals for a nation that wants to be more of an exporter than importer.    

International trade, commerce and investments are open to various kinds of risks and other frustrations. Demands on most transactions are also often stringent. Some, often expose exporters to commercial or political risk. There is also a tendency for some buyers to simply default. The Export-Import Bank provides support, offers insurance and other guarantees that offset risks including those of non-payment by buyers.

Policies of commercial banks on export finance have been notoriously fickle. Federal government policy implementation strategies have also failed to instil deterrence. In the face of all these manufacturers and exporters are facing an ever growing need for financial support, which Nexim bank was primarily established to provide. This support knows no bounds. It is open to small, medium and big time businesses. Without it, the nation may as well forget prospects of any meaningful growth in its industrial, commercial, business and trade opportunities.

There is the need to learn from the astronomical growth in the Chinese development process. At the heart of this growth is the effective utilization of the China Exim bank. The bank is an important force in promoting foreign trade and economy and a significant component of the financial system. it has been acting as a key channel of policy financing for both Chinese import and export. This priority accorded Exim bank of China explains the fast growth of the Chinese economy that is threatening America’s status as the world’s biggest or strongest economy.

Atavti wrote this piece from Abuja