This facility, given in local currency, is to
enable manufacturers of exportable goods procure adequate quantities of
local raw materials (which may be seasonal in nature) needed to keep
production at optimal levels during periods of scarcity. The duration of
this facility is 12 months. Documents required for SF application would
include the following:
A filed copy of exporter�s application form;
A project brief (available);
An evidence of export credit (Bill of
Exchange);
A copy of export contract/letter of intent (if
available);
A copy of letter of hypothecation Copy of an
Insurance policy Copy(ies) of warehouse warrants
Undertaking on stock reconciliation.
Local Input Facility (LIF)
Under this facility, NEXIM extends medium and
long-term loans in local currency to banks for on lending to their clients.
This facility is aimed among others, at providing medium and long term local
currency resources for the following purposes:
establishment of new export projects;
modernization/revitalization/expansion of
existing production lines for export;
acquisition/rehabilitation/expansion
plantation/farms for the production of exportable commodities and
acquisition of spare parts and packaging
materials for manufacture of export products.
The facility complements the RRT and SF which
are short term trade finance facilities in local currency and the FIF which
is a medium/long term facility in foreign currency.
Among the documents that should accompany an
LIF applications are
Feasibility study report for a new project or a
project brief for an on-going concern;
Certified true copy of perform invoice from
reputable supplier;
Evidence of export commitment or any other
arrangement acceptable to NEXIM;
Exporter's Audited Statement of Accounts for
the past three years (where applicable).
Direct Lending Facility (DLF/SDLF)
In an attempt to create wider means of
accessing NEXIM facilities and reduce observed lapsed in the participating
banks arrangement, the Bank in the third quarter of year 2002 introduced
both the short-term and long-term Direct Lending Facilities (DLF) for
exporters. The short-term DLF is applicable for Trade financing, for primary
products experts. The Direct Lending Facility is available to all
creditworthy companies engaged in marketing and production of exportable
goods and is made available for a maximum duration of 180 days and 365 days
respectively. However, the facility has been suspended with a view to
redesigning it based on the experience so far gathered.
RISK BEARING FACILITIES
One of the cardinal functions of NEXIM is the
provision of risk mitigating services. Among the facilities NEXIM has
developed and introduced are the export credit guarantee facility, the
Export credit insurance facility and the ECOWAS Inter-state Road Transit
scheme.
Export Credit Guarantee Facility (ECGF)
This facility is operated as a guarantee
provided by NEXIM to banks in respect of credit given to exporters in
support of the export of goods and services from Nigeria. The facility is
the usual guarantee, which a lender receives from a suitable party as
security to protect it against a borrower's default. It is hoped that this
facility will encourage banks to provide credit to exporters
Export Credit Insurance Facility (ECIF)
This facility insures exporters against risk of
non-payment by buyers where such default is ascribable reasons are covered
separately by NEXIM for the account of the federal Government of Nigeria.
ECOWAS Inter-State Road Transit Scheme (ISRT)
In line with ECOWAS protocol on free movement
of persons, goods and services, NEXIM was appointed the National Guarantor
under the ECOWAS Inter-state Road Transit Scheme to guarantee goods
transiting Nigeria to other ECOWAS countries. The scheme, which is designed
to eliminate free flow of goods among member states, seeks to eliminate the
time wasting escort system and diversion of goods consigned to specific
destinations in the ECOWAS sub-region. The Scheme was launched on August 7,
2000 and has since been operational.
PROVISION OF TRADE INFORMATION AND ADVISORY
SERVICES
One of the aspirations NEXIM is to become a
repository of trade and financial information as well as a reliable source
of market and product intelligence. Nixie's strategies to attain this
position include the establishment of working relationships with other
Export credit Agencies around the world, the creation of linkages with major
financial, commodity and product markets, as well as subscription to current
and reputable markets and economic developments journals.
NEW INITIATIVES
AGOA Support Facility
As has become the trend with ACAs the world
over, the Bank is gradually moving away from off-the-shelf,
one-size-fits-all financial retailing to the provision of tailor made export
development solutions which are targeted at creating local capacity to meet
the identified needs of high value, niche markets. In this regard the banks
wealth of expertise and network of partners are brought to bear to grow
business profitably from conception through to the production.
One area, which the Bank has focused on in the
recent past, has been the development of industrial clusters for the
production of apparel in Nigeria under AGOA. The Bank is currently in
discussion with equipment suppliers, project promoters, financiers and
reputable companies in US to draw up the relevant MOUs for its
implementation. We believe that Nigerian firms which can quickly position
themselves to produce for the US market under the preferential tariff terms
offered under AGOA will enjoy strong income streams taking advantage of
export in contrives to further increase compositeness and profitability.
NEXIM Expert Bills Programme
The Bank will soon be floating the NEXIIM
EXPORT BILLS (NEB) to assist it source funds in foreign and local currency
from the Nigerian Money market. The main objective of NEXIM BILLS is to
expand the funding base of the Bank, with a view to goods and services from
Nigeria. The Export Bills will represent a secure, liquid investment
instrument guaranteed by the Central Bank of Nigeria that offers superior
returns over and above Treasury Bill Rate.
CONCLUSION
The importance of finance in all stages of the
export cycle has been highlighted in this paper and virtually all countries
put in place diverse systems for the provision of such finance. The paper
has also shown that NEXIM is currently active in the provision of finance,
trade information and advisory sevices, as well as risk bearing facilities.
It is the intention of NEXIM bank to use its facilities to reinforce other
incentives targeted at the development of a viable non-oil export economy in
Nigeria.
In conclusion, let me reiterate to this august gathering that
the export potentials of this country are far from being fully developed.
Arising from the intricacies of the export business, exports and potential
exporters require considerable and continuous schooling both on what to
export and how to export it, appropriate mode of `payment, and the
management of risks involved. I believe this seminar will help a great deal
in this enlightenment process. Distinguished Ladies and Gentlemen, while
wishing you an illuminating seminar, permit me to thank you for your
attention.
