Posted on October 4, 2017
Since oil revenue started dwindling, “everybody now sings one song: non-oil export; non-oil export,” to drive home the import of diversifying the economy.
This seems to have resonated with the feeling that Nigeria is paying for the sins of relegating export to the background. And now, it must either diversify to survive or face more dire consequences.
Lack of funding has long been identified as the clog in the wheels of the non-oil exports.
For instance, credit to the export sector dropped from N855billion in 2008 to N122billion in 2014. This negatively rubbed off on the steady growth in the non-oil exports, which stood at $2.97billion in 2013 from $2.561billion in 2012. It then tumbled to $2.714 billion in 2014 and $1.624billion in 2015.
As part of efforts to arrest the situation, the Central Bank of Nigeria (CBN) recently approved two funding shemes and appointed Nigeria Export-Import(NEXIM) Bank as the fund manager.
The schemes are N500billion Export Stimulation Facility(ESF) and the N50 billion Export Rediscounting & Refinacing Facility(RRF).
The purposee of the latter is to create a liquidity window for banks that have supported exporters to ensure continuous flow of credit to the export sector and in the process reduce the cost of funds to the exporter.
To take care of the exporters’ complaints, that it’s too difficult to get financing for export, banks such as Fidelity Bank, NEXIM and Bank of Industry (BoI) came out to advance credit to the exporters.,
One of the banks, Fidelity Bank, said it has so far committed about N30 billion of its loan portfolio towards export.
The bank has also been assissting in the exporters’ capacity development via its Export Management Programme (EMP)-a collaboration with Nigeria Export Promotion Council(NEPC) and Lagos Business School (LBS).
At the launch of the series five of the EMP, Wednesday in Lagos, the CBN Deputy Director, Development Finance, Dr. Adebisi Adeleke, said export is the only means to raise the country’s foreign reserves and strengthen the value of the naira.
He also urged Nigerian exporters to raise their game by complying with the international standard and specification as well as embracing value addition to their products.
His words: “The promotion of export is the only thing that can actually help to beef up our foreign reserves; beef up the exchange rate and strengthen the currency over a long period of time. Everybody should take advantage of the export initiatives right now. The present situation is supposed to be a core advantage for exporters. It simply means that at the present exchange rate, whatever you are exporting can compete favourably with others across the world. It also translates to the fact that when you convert your earnings in foreign exchange to naira, you would be earning more money.
“The biggest problem we have in Nigeria is the lack of standardisation. Certain countries have not been accepting agricultural produce from Nigeria because of this factor. Take cocoa, for instance, several countries have not been accepting Nigerian cocoa because of chemicals and additives, which have been banned across the world which Nigerian farmers are still using. You must try as much as possible to ensure that you meet international standard and specification. As long as we encourage export, we also want you to add value. We don’t want you to keep exporting raw materials, that is where the big difference is.”
Explaining the achievements of the EMP, Mr Mohammed Balarabe, the Deputy Managing Director of Fidelity Bank, said there was a very huge gap that Nigeria needed to fill in terms of knowledge of export.
“I could remember very well, my colleague, Mrs Chijioke Ugochukwu, started the debate with NEPC and LBS to see how we could come together and make our contribution towards diversifying the economy away from over-dependence on oil revenue. That was how we came about the EMP.
“And today, I think it remains the only flagship on export capacity develpment platform in Nigeria.
“As I said earlier, we saw that there was a gap; people didnt understand the processes to go through in export business;So the goal of this programme is to provide impactful world class export management qualification for the Nigerian SMEs, MSMEs in such a way that they would compete effectively globally.I think we have achieve that.
“And today about 300 participants have benefited fom the programme.This is something we are committed to and we will continue to do so until that gap is filled,” he added.
The Dean, LBS, Dr Enase Okonedo, who spoke through Dr Uchenna Uzor said the institution “is very keen on ensuring that we prepare managers who will lead social and economic development in Africa, not just Nigeria. The EMP offers the opportunity to do just that because we are preparing people who will not just be interested in exporting products and services, but people who will export products and ervices that are competitive within the Africa landscape.
“And not even just competitive products, but products that, hopefully, will also make a social impact. We believe in social impact. We beleive that whatever any business you are doing, it should not just provide profit, but also provide something that will change the social level of the community where people are.
“For us, the EMP offers the us that opportunity to offer that social impact , that is very important,” he said.
Mr Tunde Faleke, the NEPC Zonal Head, Lagos & South west, who stood in for Mr. Segun Awolowo, the CEO of NEPC, lamented that the nation neglected export to its detriment.
Hear him: “Everybody now sings one song; non-oil. Many a time, nobody recognises export. And then we chose to g monoculture in terms of the economy when God never put us in monoculture. We have 774 local governments in the country. I have not seen a local government without a product that can be pushed for export. But in the usual way of liking something that is sweeter, that is not challenging we neglected export. I have not attended any programme where they would say export is easy. It is not easy. “Export business will yield very well, but, at a point, you meet challenges, especially when it comes to knowledge gap. A lot of people go into this venture without knowing what it means.”
“And NEPC, not properly funded could not do it alone.But here we have a partner in Fidelity Bank and LBS and the outcome has been very positive.”
It is one gap that we are filling . To run a programme like this cost a lot of money but Fidelity Bank came to support by funding it, while NEPC came around to solve technical issues.
Why is cbn is directly invlved in programme like this? The truth is that it is part of the core function of cbn apart from price stability.We almost always have to go beyond that to be able to establish monatary stability as well.And by monetary stability,we are talking about ensuring sound financial system. And this can only be done when you ensure that there is access to credit by virtually every sector of the economy.By now we know that some certain sectors of the economy can not compete with others for credit, like griculture for instance.Agriculture contributes about 65 per cent to GDP of the country. But if you look at credit to the sector for several years now, it is always less than 3 to 4 per cent’.And this is the primary reason CBN is involved in all of these.
On facility for the export sector we have the Export Stimulation Facility(ESF) which is N500 billion debenture stock that is specifically for the export sector of the economy.We also have the Export Rediscounting & Refinancing Facility.and that is rediscounting and refinancing which is N50billion that geared towards facilitating export