Central Bank of Nigeria, CBN, has introduced what it called Non-Oil Export Stimulation Facility, ESF, with the aim to diversify the economy away from oil and to expedite the growth and development of the non-oil export sector. This was contained in a statement obtained from the apex bank’s website, weekend.
CBN said that the recent fall in global prices of crude oil triggered a sharp decline in the country’s revenue and foreign exchange earnings. The facility is essentially designed to redress the declining export credit and reposition the sector to increase its contribution to revenue generation and economic development.
It will improve export financing, increase access of exporters to low interest credit and offer additional opportunities for them to upscale and expand their businesses in addition to improving their competiveness.
To implement the facility, CBN will invest in a N500 billion debenture to be issued by Nigerian Export-Import Bank, NEXIM, in line with section 31 of CBN Act. This Guideline describes and outlines the operational modalities of the ESF.
According to the statement the objectives of the Facility are to: Improve access of exporters to concessionary finance to expand and diversify the non-oil export baskets; Attract new investments and encourage re-investments in value-added non-oil exports production and non-traditional exports; Shore up non-oil export sector productivity and create more jobs; Support export oriented companies to upscale and expand their export operations as well as capabilities; Diversify and increase the level of contribution of non-oil exports revenue towards sustainable economic development; and Broaden the scope of export financing instruments.
The apex bank further clarified that the Nigerian Export – Import Bank NEXIM shall be the Managing Agent of the Non-Oil Export Stimulation Facility ESF. It shall be responsible for the day-to-day administration of the Facility and rendition of periodic reports on the performance of ESF to CBN. Speaking on eligible borrowers/beneficiaries, the statement explained that only export-oriented enterprises shall be eligible under the ESF, such shall include be: a company duly incorporated in Nigeria under Companies and Allied Matters Act, CAMA, an Enterprise with verifiable export off-take contracts. Etc.
Other conditions include; Enterprise with satisfactory credit reports from at least two Credit Bureaus in line with the provisions of CBN Circular BSD/DIR/GEN/CIR/04/014 dated April 30, 2010. Eligible Bank Asset, EBA, purchased by Asset Management Corporation of Nigeria, AMCON, that may by special approval of the CBN Management, be allowed to participate with respect to acquired projects of national economic importance, proven potentials to export, good prospects to attract new investors and ability to repay EBA obligations to AMCON.