In this report, MARK ITSIBOR writes on the N500 billion non-oil export intervention fund
While many exporters complain of finding it almost impossible to access the N500billion non-oil export intervention funds in the non-oil export segment of the economy by the CBN, the bank says it is not an all-comers affair. At the epicenter of the crisis that hit the Nigerian economy from 2016 down to earlier this year were the multidimensional indices of cash crunch, unemployment and skyrocketing headline inflation that would later throw it into recession and weak economy the International Monetary Fund (IMF) said is still fragile, last week. While the economy was in the doldrums, the Central Bank of Nigeria (CBN) introduced a N500 billion Non-Oil Export Stimulation Facility (NESF) loan facility as lifeline to the non-oil segment of the economy. The aim was to stimulate production of locally manufactured products for export, diversify revenue base of the economy, attract new investments and encourage reinvestments in value-added nonoil exports production and nontraditional exports and expedite the growth and development of the sector. “The Facility will help redress the declining export financing and reposition the sector to increase its contribution to economic development,” the bank said in a guideline to operating the loan facility. The debenture is issued by the Nigerian Export-Import (NEXIM) Bank. It is a single digit loan. There are of course requirements to qualify to access the funds. This include that the applying company must be duly incorporated in Nigeria under the Companies and Allied Matters Act, with verifiable export off-take contract(s) and satisfactory credit reports from at least two Credit Bureau in line with the provisions of CBN Circular BSD/ DIR/GEN/CIR/04/014 dated April 30, 2010. The banks also have the guidelines. “Exporter wishing to access ESF applies to the bank by executing the application form and complying with its terms and conditions. The PFI reviews application to assess eligibility under ESF and viability for the applicants project/business.
The PFI submits ESF loan application on behalf of eligible export-oriented enterprise to NEXIM. NEXIM reviews and submits the appraised ESF application to CBN for reviews and approval/decline,” the CBN said in a circular on its website. Curiously, there have been reports of many operators in the sub-sector expressing concerns over the process for accessing the loans which they describe as too cumbersome. Many of the affected exporters say it is almost impossible for them to obtain the long-term concessionary loans. Part of their complain is that they are being frustrated with stringent conditions that make it literarily difficult for most of them to access the loan. One of them who wouldn’t want to be name because of fear that he could be exempted by the authorities if his name is mentioned in print says “this is very, very frustrating. They keep pushing you back and forth. I have been processing my application through my bank for almost 3-months now. I’m forced to now think that government does not actually want to give us the loans.” Our correspondent gathered reliably that so far, only N20 billion of the special fund has been disbursed between 2016 when it was first launched. Spokesman of the central bank, Mr Isaac Okorafor confirmed this. How is the disbursement done? CBN notifies NEXIM of its approval/decline, NEXIM advises approval/rejection of application to PFI.
Upon approval by CBN, NEXIM advises PFI and the fund is made available to PFI under advice to NEXIM. The loan is then disbursed to the customer within three working days of receipt of funds from CBN. Repayment from customer (principal and interest) is remitted to CBN on quarterly basis along with appropriate returns/reports. However, many of the applicants whose applications have not yet got the anticipated approval said they do not know exactly what is wrong with the process. Some are pointing accusing fingers at the deposit money banks which they accused of insincerity and sharp practices. On the other hand, others put the blame on the central bank and the approving NEXIM Bank. Those who belong to this league say the CBN intervention has been reduced to mere rhetoric and not more paper statements. But Mr Okorafor said: “This is not an all-comers thing. It’s open to every Nigerian business person who is engaged in the exportation of goods. But people can’t just come and want to take money and go away. You must meet the criteria. “People who complain are those political exporters that want to access the money and go away without doing anything. The banks must be convinced because they take the risks. The banks must be convinced that this person is engaged in the production of (or) exportable commodity. Okorafor said to qualify, one must be an established exporter; and must have a business running noting “You must have importers in other countries who import your items. There has to be evidence to ensure that you are doing that. What you are exporting must be things that are produced in Nigeria – raw materials, add value and then export.” What measures have been put in place to ensure that the process is at least easy for the exporters to access the facility? Okorafor said “We have provided the funds, we have sensitized exporters and we continue to sensitise them. We have asked the banks to apply. But like I said, every person accessing that facility must have a business that is engaged in export.”
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