Nduka Bulo Nwaede
Recently the Nigerian Export-Import Bank – NEXIM Bank, embarked on a deliberate programme of building partnerships designed to deliver value to its stakeholders and target public as the Nigeria’s sole Government Trade Policy Bank. This development has been applauded by both players and watchers in the Nigerian SMEs, especially those operating in the manufacturing, agro-processing, solid minerals and services sectors.
The world today has gone past the era of the lone-star performer onto the era of coalition building and strategic partnerships. Today, both open and crowd sourcing are becoming major drivers of global commerce; meaning that business networks are increasingly becoming more cross border and more virtual in nature.
It is against this background that stakeholders have described the strong collaboration and interfaces among the NEXIM Bank and such institutions as the Nigerian Export Promotion Council (NEPC), the National Directorate of Employment and Crown Agents Nigerian Ltd as the way forward.
The MD of NEXIM Bank’s, Mr. Roberts Orya and the Executive Director of NEPC – Mr. Olusegun Awolowo, have over the period established a strong working strategic partnership – sharing ideas, valuable contacts etc. These have resulted in beneficial synergies that have linked Nigerian exporters in the non-oil sector with buyers of same abroad further creating jobs and boosting forex revenue for the country.
This initiative indeed, is a major step in the effort towards the diversification of the economy from the dependency on crude oil for exchange earnings. It is also a clear evidence that the crucial nature of their respective mandates is not lost on them.
NEXIM Bank’s recent Corporate Transformation initiative has indeed improved its operations and positioned it as a world class institution that can hold its own among its peers in other fast growing economies, especially among the MINT Nations of Mexico, Indonesia, Nigeria and Turkey.
The plan of the NEPC to increase the level of non-oil exports by at least 30 per cent in the next four years cannot be fully realized without a dynamic credit institution that will supply the needed financing as well as moderate the shocks that are usually attendant upon the vicissitudes of the export market. This partnership is sure to shore up market confidence and improve the level of trade flows and revenue earnings.
It is remarkable that in 2013 the annual earnings from informal trade was $12 billion (N1.9 trillion), a figure which is higher than the contribution from the formal trade sub-sector, which was valued at $3 billion (N477 billion) within the same period. NEXIM Bank and NEPC are concerned that most of the transactions that yielded this revenue did not go through the banking channel nor were adequately captured for statistical and ‘market indicator’ purposes. There is therefore, cause for optimism that the continued collaboration by both institutions would help leverage their huge potentials.
Experts agree that both agencies are now better positioned also to boost Nigeria’s chances of exploring other avenues of trade promotion especially the African Growth and Opportunities Acts – AGOA, designed to provide a leeway for selected African products to access the US market without the encumbrance of trade tariffs.
From the time of his appointment as the MD NEXIM Bank in 2009, it is remarkable that Roberts Orya has since led a strategic transformation of the otherwise moribund institution and returned to a path of sustained profitability by refocusing its objectives to key sectors- Manufacturing, Agro-processing, Solid minerals, and Services, known as MASS Agenda.
Industry watchers are particularly optimistic that the NEXIM Bank-facilitated Sea-Link Project, designed to build regional maritime networks to connect West and Central African ports with a fleet of 3,000 to 5,000-tonne ships, is one of those longed for initiatives that will boost trade within the West and Central African sub-regions. Particularly, it is also anticipated that it will boost Nigeria’s trade and revenue benefits beyond the shores of ECOWAS where our products and services already hold sway.
Another equally strategic move is the Bank’s partnership with the National Directorate of Employment (NDE). This is designed to build capacity, beyond its Corporate Transformation Initiative. Under the arrangement, both agencies are cooperating to train and empower a new crop of entrepreneurs who will become acquainted with SMEs and export of goods and services early in life, as a means of enterprise promotion in non-oil export business.
After the training, successful participants are given loans upon fulfilling some basic criteria such as registrations with the Corporate Affairs Commission (CAC) and the NEPC as well as the provision of minimal guarantees, among tohers.
Without a clear and deliberate effort of this nature, the gains the country is making in transformation of the economy would ultimately prove unsustainable. It is all too well known that Nigeria’s educational curriculum is not where it should be in regard to training employable graduates. Young folks leave schools only to discover that skills and experiences they have acquired do not effectively equip them for engagement or work in most of the sectors and industries. Opportunities such as this, being provided by the NEXIM Bank and the NDE will re-skill the beneficiaries; bridge the skill gaps and provide opportunities for fresh graduates to build capacities in the given areas.
Another significant evidence of its passion for progress and growth is NEXIM Bank’s partnership agreement with Crown Agents, an international development agency that specializes in strengthening operations of various corporate organizations to position them appropriately to deliver on their mandate.
Through this arrangement NEXIM has strengthened its internal capacity and is re-engineering its service delivery architecture for greater effectiveness. Crown Agents is particularly renowned in providing consultancy and training in trade and growth, public private partnerships, public financial management, governance etc. Partnerships of this nature would greatly assist to reinforce NEXIM’s human and technical capacities towards greater efficiency and productivity.
The Managing Director/CEO of NEXIM, Mr. Roberts Orya, when he met with the Chief Executive of Crown Agents, Terence Jagger, at the inception of the partnership in 2013 praised “the expertise and commitment of the agency to help improve good governance and capacity of several public finance institutions, commercial and investment banks, as well as supply chains.”
Mr. Orya observed, and rightly so, that without a sound and technically competent workforce, there is no way NEXIM Bank would be able to remain on track towards becoming the lead export development bank in Africa. Mr. Jagger and his team re-emphasized the commitment of Crown Agents to helping governments to reduce poverty, improve health and increase prosperity for sustainable development.
Indeed, as government’s sole trade policy bank and export credit agency, NEXIM Bank is at a vantage position to generate the critical mass and synergy with relevant institutions to harness the huge opportunities available for economic prosperity in Nigeria’s non-oil trade space.
Such agencies include: the Nigerian Export Promotion Council (NEPC; Nigerian Shippers Council (NPC), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN); Chambers of Commerce, Industry, Mines and Agriculture and Manufacturers Association of Nigeria (MAN) among others.
The relentless drive and strategic leadership focus to transform NEXIM Bank into a world class export credit agency has shown that Mr. Orya is on course to take the financial institution even to greater heights. What is now left is for NEXIM to be strengthened and given the necessary fillip to aggressively begin to offer buyer’s credit facility as an essential product to its customers. This is in line with international best practice and would provide an avenue to Nigerian exporters to overcome issues of cash flow consequences or the risks of extending long-term credit by helping an overseas buyer to secure a long-term financing with a lender. Normally, with this arrangement, a Nigerian exporter would be paid as if he has a cash contract, whilst the overseas buyer has time to pay on the contract through the financing secured from the lender, which would be backed by NEXIM Bank’s guarantee. For Nigeria to fully exercise its position as the largest economy in Africa, this is the next necessary step that must be taken. This will also afford NEXIM Bank the opportunity to consolidate on the gains of its strategic transformation.
Nduka Bulo Nwaede is a Public Affairs Analyst based in Oshodi lagos