Barely eight months after the Federal Government announced the institution of N500bn Export Stimulation Fund (ESF), a number of manufacturers and business operators who had made failed attempts to access the fund have raised issues on whether the facility does exist really.
It would be recalled that Federal Government had in June last year through the Central Bank of Nigeria (CBN) launched the N500 billion non-oil Export Stimulation Fund (ESF) to deepen diversification of the economy away from oil and boost the growth of the non-oil export sector.
The purpose of the fund is to provide concessionary finance to non-oil exporters; provide long-term fund at single digit interest rates to non-oil exporters and aid non-oil export productivity and create more jobs.
Other objectives of the fund include expanding the diversification of the Nigerian economy in the non-oil export sector, boosting contribution of non-oil exports for sustainable economic development; increasing foreign exchange (forex) earnings as well as broadening the scope of export financing instrument.
The facility is driven by the CBN who has invested a N500 billion debenture to be issued by the Nigerian Export-Import Bank (NEXIM) in line with Section 31 of CBN Act. This makes the apex bank the sole investor, having invested half a billion naira for the purpose of funding non-oil export; it determines the lending limit and applicable rates and also reviews the operating guideline as may be deemed fit.
NEXIM, on the other hand, is the ESF managing agent in charge of the day to day management and administration of the fund and renders periodic returns to CBN.
Participating Financial Institutions (PFIs) are selected amongst the commercial banks, and the Development Finance Institution (DFI) in charge of liaising directly with interested customers and reviewing and appraising applicants’ eligibility, who then forward eligible applications to NEXIM for disbursement.
In terms of eligibility, the key condition is that only an export oriented company registered in Nigeria with verifiable export off take contract agreement with an importer overseas will be eligible.
Besides, the company must have satisfactory credit report. An AMCOM debtor may also be eligible only with special clearance of the CBN. The eligible transactions, according to CBN, cover 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, modernisation and technology upgrade of non-oil exports industries and stocking facility/working capital.
A number of the loan applicants said the volume of documentation and rigorous processes before the loan is accessed are unbearable and moreover, some of the applicants have lost faith in their ability to manage the loan in an economy that is riddled with hyper inflation and forex crisis.
