The National Bureau of statistics reports , NBS, is a pointer to the emerging trend in the Nigeria’s external sector, principally the export sector, and specifically the non-oil exports. Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele Exports from Nigeria for the first quarter 2019 was N4.54 trillion, up 1.8 percent against N4.45 trillion in the corresponding period of last year.
But what was outstanding in the NBS Foreign Trade Report was that at a total balance of trade value of N831.6 billion, export contributed 59.2 percent, meaning that Nigeria exported more than it imported in the first quarter of 2019. Moreover, while other exported trade items contracted exports grew for agricultural goods (74.5%) and manufactured goods (353.6%). In the broader perspective Nigeria shipped US$52.9 billion worth of goods around the globe in 2018. That dollar amount reflects a -46.7% drop since 2014 but a 29.9% uptick from 2017 to 2018. A report by the Central Bank of Nigeria (CBN) in December last year recorded non-oil export earnings at $382.24 million in October 2018, indicating a rise of 46 per cent from the previous month’s N262.35 million and 69 per cent from the previous year’s (October 2017) N225.78 million.
According to a report by the Centre for the Study of Economies of Africa, “Improvements in proceeds from agricultural products as well as mineral exports impacted the total export earnings – both accounting for 13 per cent and 59 per cent respectively during the full year 2018 performance. “The improved mineral exports followed important tractions in the sector: at the state level, Ebonyi State launched the combined lead, steel and copper processing plant; and at the federal level, the government renewed commitments to incentivise non-oil exporters. “With recent strides made in the mining sector such as issuing the first gold refining license, mineral exports and by extension non-oil exports, are expected to continue rising.”
First is the rising exports, second is the diversification in the export base in favour of non-oil. These developments were coming on the heels of the stepping up of actions by the CBN on its N500 billion low interest rate non-oil export facility, the Non-Oil Export Stimulation Facility (ESF). The move, which was a fallout of series of engagements CBN had with exporters and banks where the apex bank, in the first quarter of 2018, set out to boost exports of value added products in the non oil sector including cocoa, cashew nuts, palm produce, sesame seeds, solid minerals and rubber, as well as manufactured goods. CBN Governor, Godwin Emefiele, announcing the measures in 2018, said that while the apex bank would be working with new management of the Nigeria Export-Import Bank (NEXIM), it is part of strategies to create other means of survival for the country rather than just rely on the oil. Consequently, the CBN announced to all participating financial institutions and organisations that its implementation of the Non-oil Export Stimulation Facility (NESF) has commenced.
The CBN revealed this in a circular addressed to all commercial banks and Development Finance Institutions (DFIs) posted on its website. The CBN had in 2016 introduced the NESF to engender growth in the non-oil sector of the economy as well as to drive its foreign reserve accretion. It urged interested institutions to channel enquiries on the NESF to its Director, Development Finance Department. The facility attracts low interest rate and was specifically designed for operators in the non-oil export business.
In accordance with the guidelines for operating the fund, the CBN invested N500 billion debenture issued by Nigerian Export-Import Bank (NEXIM) in line with section 31 of CBN Act. It 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. With the improved export financing, increased access of exporters to low interest credit and offer of additional opportunities for them to upscale and expand their businesses in addition to improving their competitiveness, the subsequent trade reports by NBS began to show the positive trends. The Nigerian Export â€” Import Bank (NEXIM) is the managing agent of the Non-Oil Export Stimulation Facility. NEXIM is responsible for the day-to-day administration of the Facility and rendition of periodic reports on the performance of facility to the CBN.
Under the CBN arrangement export loan facilities with a tenor of up to three (3) years, would be granted at a maximum all-in interest rate of seven and half percent (7.5%) per annum; Facilities with tenor of over three (3) years, would be granted at a maximum all-in interest rate of nine percent (9%) per annum.
The guidelines gave eligibility for the facilities as, “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.” Furthermore, it stated, “the facility shall not exceed 70per cent of the total cost of the project or transaction subject to a maximum of N5 billion shall be for a maximum tenor of one year with the option of roll-over not exceeding twice.”