The Acting Managing Director of the Nigerian Export-Import (NEXIM) bank, Bashir Wali, has said that the country’s annual domestic export credit has declined by N400 billion.
Speaking at a business summit for the North West Zone held in Kano, Wali said that domestic export credit dropped from an annual average of N525 billion to current level of about N125 billion.
On the need to finance the value chains in agriculture and solid minerals, the NEXIM boss decried that the banking system has crowded out these sectors of the economy due to increased risk aversion, high-risk perception and dearth of long terms funds.
“A common problem to both sectors is poor access to credit, given that the sectors require long term funds at concessionary interest rates,” he said.
He told participants at the summit that as part of efforts to arrest the declining trend in the non-oil export revenues and boost investments in the non-oil export sector, the Central Bank of Nigeria (CBN) recently approved two funding schemes and appointed NEXIM as the Fund Manager.
The funding schemes are the newly introduced N500 billion Export Stimulation Facility (ESF) and the N50 billion Export Rediscounting and Refinancing Facility (RRF), which is an enhancement of the existing N1.225 billion RRF being operated by NEXIM from inception in 1991.
The financing schemes are designed to redress the declining domestic export credit, boost the level of non-oil export earnings, currently under 5 percent of total export earnings and attract plus incentivize new and additional investments to the non-oil export sector towards diversification of the economy and broadening export basket.