Idle state of N500bn intervention fund frustrating ease of doing business—Exporters
Nigerian exporters have observed that the little or no disbursement from the N500bn Non-oil Export Stimulation Facility established in 2016 to provide single-digit interest loans to non-oil exporters which has forced business operators to contend with high cost of borrowing from regular banks is a negation of the current administration’s ease of doing business campaign after all.
There are indications that several applications for the N500bn Non-oil Export Stimulation Facility meant to provide cheap funding for exporters are piling up at the Central Bank of Nigeria (CBN), thereby frustrating the purpose for which it was set up.
Whereas there are concerns that only N20bn had so far been disbursed from the fund, sources say the apex bank is having cold feet in processing applications so far sent to it by commercial banks on behalf of their customers.
The NESF was initially launched in June 2016 by the CBN, but was repackaged and re-launched in December 2017.
The facility was designed to boost activities in the non-oil sector. The CBN said in its guidelines for operating the fund that it was established to support the diversification of the nation’s economy away from oil, and to expedite the growth and development of the non-oil export sector.
It would also be recalled that according to fund access guidelines given by the apex bank, “The CBN will invest in a N500bn debenture to be issued by the Nigerian Export-Import Bank in line with Section 31 of CBN Act”.
It also stated that the facility was essentially designed to redress the declining export credit and reposition the sector to increase its contribution to revenue generation and economic development.
Government, during the re-launch made it clear that the fund is specifically designed to provide long-term concessionary funds to support existing or new export-oriented projects through the provision of term loans at a single-digit interest rate for tenors up to eight years, with moratorium of up to two years, or as working capital/stocking facility.
The Managing Director, NEXIM Bank, Mr. Abba Bello, had during a one-day seminar on export potential urged operators in the Small and Medium Enterprises sector to access the fund and its counterpart,
The non-disbursement of the fund has forced exporters to return to the traditional mode of borrowing from the banks at high interest rate which is known for stifling the manufacturing sector and non-oil business operators.
The development therefore runs contrary to the CBN’s circular in March this year titled: ‘Circular to All Deposit Money Banks and Development Finance Institutions on the Commencement of the Non-oil Exports Stimulation Facility’.
