CBN investing N500b debenture to drive export, diversification
The Central Bank of Nigeria (CBN) has said it is investing N500b debenture to be issued by Nigerian Export-Import Bank (NEXIM) in line with section 31 of CBN Act to deepen export sector in other to facilitate diversification as a way out of recession.
The Non-Oil Export Stimulation Facility (ESF) was established by the CBN to diversify the economy away from oil and to expedite the growth and development of the non-oil export sector.
It would be recalled 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 upgrade and expand their businesses in addition to improving their competiveness.
Guideline for the investments as contained in the Act describes and outlines the operational modalities of the ESF. 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 upgrade 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.
Currently, the Nigerian Export – Import Bank (NEXIM) is the managing agent of the Non-Oil Export Stimulation Facility. It is for the day-to-day administration of the Facility and rendition of periodic reports on the performance of ESF to CBN. “Facilities with a tenor of up to three (3) years would be granted at a maximum all-in interest rate of seven and half per cent (7.5%) per annum; Facilities with tenor of over three (3) years would be granted at a maximum all-in interest rate of nine per cent (9%) per annum.
“Export of goods wholly or partly processed or manufactured in Nigeria; Export of commodities and services, which are permissible and excluded under existing export prohibition list; Imports of plant and machinery, spare parts and packaging materials, required for export oriented production that cannot be produced locally; Export value chain support services such as transportation, warehousing and quality assurance infrastructure; Resuscitation, expansion, modernization and technology upgrade of non-oil exports industries and; Stocking Facility/Working capital,” the guidelines added.