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Financal Support for Shea Products: The role of NEXIM

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Financal Support for Shea Products: The role of NEXIM

  1. 1. + FINANCIAL SUPPORTFOR SHEA PRODUCTS- MANUFACTURING AGRICULTURE THE ROLE OF NEXIMA PRESENTATION BY THE NIGERIAN EXPORT -IMPORT BANK (NEXIM) SOLID MINERALS SERVICESAT THE GLOBAL SHEA PRODUCTS CONFERENCE & EXHIBITION HELD AT SHERATON HOTEL, ABUJA 4TH -6TH MARCH, 2013
  2. 2. + 2  INTRODUCTION OUTLINE  ROLE OF NEXIM IN PRODUCT DEVELOPMENT  VALUE PROPOSITION  CONCLUDING REMARKS
  3. 3. + INTROCUCTION Nigeria is predominantly an agrarian economy, with the Agric. Sector contributing about 40% of GDP and employing over 60% of the labour force.  In spite of this, the Oil and Gas sector continues to dominate government and export revenues, accounting for about 70% and 95%, respectively.  Given the challenges of oil dominance, particularly in view of decreasing demand by the United States, and discovery of oil by competing nations, the Federal Government, under  the current Transformation Agenda seeks to diversify the economy through increased production and exports of non- oil products.
  4. 4. + INTROCUCTION Currently, Nigeria’s non-oil export revenue is insignificant. Of the total export revenue of N14.23trillion (US$93.3bn) in  2011, with the oil sector accounting for 96.6% and a paltry 3.4% for non-oil.  Even more disturbing is that although Agricultural products constitute 54% of non-oil exports, only a few agricultural commodities such as Cocoa, Rubber and Cotton featured on  the list of exports. While Nigeria is a major producer of many other crops such as Shea products, the preponderance of trade in the informal sector tends to exclude such products from  statistical data.
  5. 5. + INTROCUCTION In order to develop Shea products, in addition to increasing access to market and finance, there is the need for concerted efforts to put structures in place to  facilitate data generation for planning, and engender industry growth It is against the background of the foregoing that NEXIM is supporting this Global Conference, along with many other partners. 
  6. 6. + THE NIGERIAN ECONOMY –SECTORAL 6 CONTRIBUTION TO GDP Others 2% Services 19% Agric 40% Trade 19% Petroleum 15% Manufacturing 4% Solid Minerals 1%
  7. 7. + SECTORAL DISTRIBUTION OF NIGERIA’S NON-OIL 7 EXPORTS Others Solid Minerals 4% 1% Semi Manufactured 30% Manufactured Agriculture 11% 54%
  8. 8. + AGRICULTURAL EXPORTS BY SECTOR 8 others Cocoa Beans 29.41% 36.41%fish/Shrimp 6.16% Rubber Cotton 14.01% 14.01%
  9. 9. BACKGROUND AND ROLE OF NEXIM The Nigerian Export – Import Bank was established by Act+ 38 of 1991 as Nigeria’s Export Credit Agency (ECA). The Bank is equally owned by the Central Bank of Nigeria (CBN)and the Federal Ministry of Finance Incorporated (MOFI). The Bank’s broad mandate include the provision of the following: Credit Facilities in both local and foreign currencies, o Risk-bearing facilities - Export Credit Guarantee & Export Credit Insurance o o Business Development and Financial Advisory Services o Trade & Market Information
  10. 10. + NEXIM’S ROLE CONT’D  The Bank also complements in attracting foreign investment capital towards the development and growth of targeted industries and strategic sectors of the economy through availment of concessional lines of credit, co-financing arrangements and facilitation of buyers’ / suppliers’ credit for the purpose of adoption and acquisition of new and clean technologies, assess to patents/intellectual properties, etc
  11. 11. FINANCIAL OPTIONS FOR PRODUCERS AND TRADERS+ OF SHEA PRODUCTS Export Credit Finance Rediscounting & Refinancing Facility (RRF) – This is an interbank product designed to liquefy the export credit transactions of banks through the provision of a window to rediscount export bills finance and/or  refinance their export credit portfolio Foreign Input Facility (FIF) – This facility is designed to support banks / exporters with foreign currency loans to import foreign inputs e.g. plant & equipment, raw/packaging materials, spares, etc needed for production for  exports.  Local Input Facility (LIF) – This is the local variant of FIF 11
  12. 12. FINANCIAL OPTIONS FOR PRODUCERS AND TRADERS+ OF SHEA PRODUCTS Stocking Facility (SF) – This is an interbank or direct lending facility designed to enable processors stock adequate raw materials that are seasonal in nature to keep their production at optimal levels during off-  season of inputs. Direct Lending Facility (DLF) – this is a funding window purveyed directly to exporters who meet meets the Bank’s minimum eligibility criteria  ECOWAS Trade Support Facility (ETSF) – This facility is developed to support intra-regional exporters as well as promote formal trade and deepen payment system within ECOWAS, thereby facilitating economic  integration and cooperation under ECOWAS Trade Liberalization Scheme 12
  13. 13. + NEXIM’S VALUE PROPOSITION  NEXIM seeks to work with principal players, including producers, investors and traders to develop the Shea Product industry  In addition to existing services, we are desirous of developing suitable financial products, targeted at the entire value chain of Shea products  We also have relationships with other EXIM Banks, particularly the US EXIM, Indian EXIM and AFREXIM, towards availing concessionary lines, particularly for the purpose of acquisition of modern machinery and equipment for processing and value addition.
  14. 14. + Over the years, NEXIM has embarked on similar SIMILAR INITITIVES BY NEXIM intervention to promote key crops and support government’s initiatives: To enhance its funding intervention and ensure the sustainable development of the cashew  Cashew: industry, the Bank is in collaborative / partnership arrangements with cashew processors under the Nigerian Cashew Cluster Finance Scheme (NCCFS) an initiative of the African Cashew Alliance facilitated by African Investors Management Services Ltd and funded by the West Africa Trade Hub, a USAID funded project. The Bank had disbursed over N150 million under the pilot scheme,  Cumulatively over the years, the Bank has disbursed about $3.1m and over N260m to the sector.
  15. 15. + SIMILAR INITITIVES BY NEXIM NEXIM’s intervention led to quantum leap in processing capacity from 20,000 to over 150,000  Cocoa: tonnes NEXIM has financed over 10 Rubber Processing plants with combined capacity of over  Rubber: 100,000 metric tons NEXIM supported the sector, under the Sesame Seed Merchant Programme through which it  Sesame Seed: disbursed over N1.2 billion
  16. 16. + ACCESSING NEXIM FACILITIES The Bank’s facilities are available to any registered, creditworthy Eligibility export Company/Cooperative Society, incorporated in Nigeria, Criteria registered with the Nigerian Export Promotion Council (NEPC). • Application Form • Certified True Copy of Certificate of Incorporation, • Board Resolution Authorizing Certified True copies of CO2 & Company to borrow and CO7; and Memorandum & Letter of Authorization for Articles of Association; NEXIM to seek information on • Current three year tax Company; clearance; • Registration with NEPC; • Proforma Invoice; Export Documentation • Three (3) year Audited Accounts and most recent Contract or MOU and Evidence Required management accounts, where of past export(s) if any; applicable • Valuation Report of the • Feasibility Study/Business proposed security; Plan including Projected Cash flow, P&L and
  17. 17. + CONCLUDING REMARKS The Bank’s objective is to increase intervention in the underserved, but key sectors of the economy in line with the Federal Government’s Transformation Agenda  NEXIM is particularly interested in working with SMEs and since inception has supported over 900 SMEs, many of which currently rank among the top 100 exporters in Nigeria  We, therefore, welcome applications from bankable projects and exporters of Shea Products  Also, the Bank wishes to invite the informal / small traders as well as large export merchants to avail themselves of the newly introduced ECOWAS Trade Support Facilitate (ETSF),  which is designed to deepen and expand Nigeria’s trade in the ECOWAS sub- region, in addition to helping small exporters to expand their businesses and bring them into the formal sector.
  18. 18. + OUR CONTACTS 18 Plot 975, Cadastral Zone A0,Head Office Central Business District, Abuja Website: www.neximbank.com.ng E-mail: neximabj@neximbank.com.ngLagos Area Office, Calabar Area Office Kano Area OfficeBranches:31D, Thompson Avenue, Calabar Free Trade Zone Fatima House,Off Glover Road, Cross River State Murtala Ikoyi,Lagos State Kano Stateneximlag@neximbank.com.ng neximcepz@neximbank.com.ngneximkao@neximbank.com.ng
  19. 19. + THANK YOU FOR YOUR ATTENTION 19

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