The road to economic diversification

However, through the years various Administrations have made concerted efforts to reduce the dominance of oil earnings in the foreign trade sector by encouraging growth in other sectors through strengthening the financial capacity of local exporters to access the foreign market.  This becomes very necessary given that some developing nations, like Malaysia, which were assisted […]

However, through the years various Administrations have made concerted efforts to reduce the dominance of oil earnings in the foreign trade sector by encouraging growth in other sectors through strengthening the financial capacity of local exporters to access the foreign market.  
This becomes very necessary given that some developing nations, like Malaysia, which were assisted by Nigeria to develop certain primary products like palm fruits  are today realizing huge export earnings from those crops, to the point that Malaysia today is in the league of the world’s largest exporters of palm oil. Nigeria is blessed with abundant agricultural and mineral resources which when properly harnessed can compete with oil as export earners.  What has been lacking is political will, appropriate policy regime and institutional frameworks.
It is against this background that the Nigerian Export Import (NEXIM) Bank comes readily in mind and needs be commended for the great work the Bank is doing to ensure that Nigeria raises its profile in the international export market by leveraging its potentials in the non-oil sector.
The Bank has been a major source of encouragement to both exporters and importers as it works assiduously to ensure that Nigerian businessmen are strengthened to compete with their counterparts among the developing nations. This becomes urgent when viewed against the background of the competition among developing countries to exploit the opportunities that abound in the international markets, especially under the African Growth and Opportunities Act (AGOA) by which the US has given incentives of access to its market for a range of primary products from the Africa.   
To achieve its mandate, the NEXIM Bank offers an array of products such as its Direct Lending Facility (DLF), Export Credit Insurance (ECI) , Stocking Facility (SF) and Export Credit Guarantee Facility (ECGF), among others.
ECGF is designed to protect Banks in Nigeria and foreign suppliers of credit and goods against the risk of non-payment of loan advances granted to exporters to meet short-term export contracts as well as to encourage banks and other financial institutions to finance export business without fear of default from exporters.
Types of guarantees available under the Facility include the Pre-Shipment Guarantee which covers credits and advances granted by banks for the purpose manufacture, purchase, processing and packaging of goods to be exported under a confirmed export order.  Others are the Post-Shipment Guarantee covering export bills or receivables and Advance Payment Guarantee designed to protect foreign buyers against payment risks in respect of payments advanced to exporters in Nigeria to finance exports.    
On the strength of the foregoing, the commitment of the Bank to giving the necessary protection to Nigerian exporters to alleviate their fears of swimming with the sharks in the seas of export business is evident. Mr. Robert Orya, the Managing Director of NEXIM Bank has become the exponent of the push to give the non-oil sector a pride of place in the efforts to diversify the economy. His leadership of the Bank has witnessed the signing MoUs with various institutions and agencies geared towards boosting export trade in the country.  One such is the MoU with the Nigerian Institute of Pharmaceutical Research and Development (NIPRD) aimed at encouraging the commercial production of certain range of drugs.
A few years ago the Bank concluded arrangements to spend 3.7 billion naira to finance local industries aiming to export their products, while placing NEXIM Bank in the forefront of the efforts to empower SMEs as well as building the capacity of budding exporters to leverage foreign markets. The current leadership of NEXIM Bank needs all the political support it deserves to continue to move forward if Nigeria, must attain its goal of joining the rank of 20 largest economies by the year 2020.
Osigwe wrote in from Abuja