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Inside NEXIM Bank’s Handbook Of Investment Opportunities To China Investment Fair

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In this article, MARK ITSIBOR takes a look at the benefits Nigeria stands to gain from the recently held 10th China Overseas Investment Fair in China.

For a nation that is determined on industrialisation of its economy with a focus on attracting foreign direct investments and foreign exchange, it is only a matter of obligation that it aggressively market its potentials, facilitate bilateral economic relationship and commercial exchange. Such marketing is done at international trade fora as the annual Promotional Seminar of China Overseas Investment Fair recently held at the National Convention Centre, Beijing, China. It’s an essential occasion for all participants to develop multilateral investment cooperation.

The fair, with a theme of ‘Explore New Approaches to Overseas Investment and Drive Global Economic Growth’, launched important contents – including high-level dialogue, investment forum, capacity promotion and project matching – to expound on the goal of high-quality development in China and participating countries, like Nigeria. It’s not only a bridge for entities to gain information about going global, but also a window to attract investment from all parties.

For the managing director/chief executive of the Nigerian Export-Import Bank, Abba Bello, the overseas investment fair was an ample opportunity to market not just Nigeria’s huge investment opportunities but the enabling business environment for prospective investors. Bello went to the forum with a portfolio full of products and opportunities for investors drawn from across the world.

Currently, the Bank has about $2 billion under management in collaboration with African Development Bank Group (AfDB), Afreximbank and Exim Bank of India, including special intervention funds of N500 Billion Non-Oil Export Stimulation Facility (NESF) and N50 Billion Export Development Fund (EDF) managed on behalf of the Federal Government of Nigeria. According to Bello, the funds are designed to facilitate the development and promotion of Nigeria’s non-oil export related trade and investments in line with the Government’s trade policy and economic development plans.

The Bank’s strategic focus is to align with the Government’s Development Plans such as the Economic Recovery and Growth Plan (ERGP) which is aimed at stabilizing the macroeconomic environment and revenue diversification by growing the agricultural potentials and achieving food security, ensuring energy sufficiency, improving infrastructure and driving industrialization of SMEs.

Opportunities for Investments and Partnerships

The NEXIM boss highlighted the fact that Nigeria has infrastructure deficits in virtually all sectors (power, transport, etc). According to experts, addressing Nigeria’s infrastructure challenges will require sustained expenditure of almost $14.2 billion per year over the next decade. However, like Vice President Prof. Yemi Osinbajo had said “Nigeria’s infrastructure deficit is not a problem but rather an opportunity for investors to exploit”.

To bridge the trade infrastructure gap, Mr Bello said NEXIM Bank is promoting the establishment of a Transnational Maritime Shipping Company (Sealink) that will connect seaports within the West & Central African regions, in order to ease trade and promote integration within and between the two regions. Opportunities for investments in infrastructure include power (renewable energy solutions), seaports, rail linkages to seaports and development of road infrastructure for regional trade to mention a few.

Nigeria also has the National Mining Roadmap designed to encourage the development of steel, energy minerals and industrial minerals as well as promote beneficiation. The Government’s Economic Development Plans are largely targeted towards diversification of earnings, promoting SMEs development and employment generation amongst others. The Bank focuses its interventions in four key non-oil export sectors of Manufacturing, Agro-processing, Solid Minerals and Services.

Agriculture and Agro-Processing

Over 70 per cent of Nigeria’s Non-Oil exports comes from commodities, which suggests that there is need to increase value addition through agriculture, especially in the areas of plants and machineries.

Light Manufacturing

There is also a big market in the Light Manufacturing sector in Nigeria presents a $10.29 billion opportunity in import substitution. With over 182 million people out of which over 40 million are in the growing middle class and access to the regional markets, Nigeria presents a large market and is geographically located to service the regional markets with manufactured consumer goods. Bosch Group, a leading global supplier of technology and services had testifies that opening a location in Nigeria was a decisive step forward in expanding its presence in West Africa. But that is not all. He also spoke to the fact that there are investment opportunities in auto components, textile, footwear, ICT equipment, electrical and electronic equipment etc.

Solid Minerals

Nigeria remarkably has 45 exploitable minerals in proven commercial quantities ranging from crude oil, construction minerals, metals and other ornaments. As many of you may be aware, among these minerals, only crude oil has been substantially exploited. That was also NEXIM’s selling product to the world. With the Government’s current drive of diversification from crude oil and support for the non-oil sector, the solid minerals sector presents opportunities for investor to explore along the entire value chain in line with the Government’s policy on the sector.

Value Proposition to Investment Partners

NEXIM Bank presents partnership with Chinese investors and their Nigerian trading partners in the areas of facilitation of Buyers’/Suppliers’ Credit arrangements for equipment and provision of complimentary project financing for local components of project costs to investors seeking to establish industries in Nigeria; provision of Investment Guarantees of up to $100 million to investors to protect foreign direct investments (FDIs) against political and non-commercial risks.p and provision of Guarantees/Counter Guarantees to Lenders/Guarantors to facilitate exports of Chinese capital goods to Nigeria in collaboration with any financier/guaranto from China. There is also the issuance of Certificate of Capital Importation to investors engaging in non-oil export related activities for repatriation of profits, payment of dividends and divestment, in line with Government policy on FDI flows.

Services

To reflect the dominance of the services sector which currently contributes over 50 per cent to Nigeria’s GDP, Bello said the Bank is developing a strategic framework for deliberate funding to the services sub-sectors such as information and communication technology (ICT), healthcare services (to reverse medical tourism in Nigeria) and the creative economy. Investors are therefore encouraged to take advantage of this vibrant sector.

The sectors highlighted have high growth potentials for trade and investments, as well as foreign exchange earnings and employment generation. They also align with both the Government’s development plans and NEXIM Bank’s strategic focus. Foreign investors in these sectors of the economy will gain numerous investment incentives especially from the Nigeria Investment Promotion Commission (NIPC) to encourage their investments. They will also qualify for funding and advisory services from NEXIM Bank.

He did not come home dry. At the end of the Programme, memoranda of agreements were signed, with many investors showing interest of either expanding their investment foothold or coming in to open new businesses in the Africa’s business hub – Nigeria.

 



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