Emefiele...happy with sector's stability

BY CHINYERE OBIORA, LAGOS – In a move seen by experts as a big boost for export financing in the country, the Central Bank of Nigeria (CBN) has released operational guidelines for Non-oil Export Stimulation Facility (NESF).

According to the apex bank, the facility will remedy declining export funding and re-position the sector for enhanced contribution to Nigeria’s economic growth and development.

It also explained that NESF’s introduction aims at diversifying the revenue base of the economy while expediting growth and development of the nation’s non-oil export sector.

Similarly, the guidelines described NESF as a tool to enhance exporters’ access to concessionary funds that will expand and diversify the non-oil export baskets as well as shore up non-oil export sector productivity and create more jobs in the polity.

Other reasons advanced by the apex bank for instituting NESF include; attracting new investments and encouraging re-investments in value-added non-oil exports production and non-traditional exports; supporting export-oriented companies to upscale and expand their export operations as well as capabilities; and broadening the scope of export financing instruments across board.

On eligibility to participate in and benefit from NESF, the apex bank said the window is open to export-oriented enterprise duly incorporated in Nigeria under the Companies and Allied Matters Act (CAMA); companies that have verifiable export off-take contract(s); and satisfactory credit reports from at least two Credit Bureau in line with the provisions of CBN Circular of April 30, 2010.

Also listed as eligible transactions that qualify for funding under NESF as: Export of goods processed or manufactured in Nigeria; Export of commodities and services which are allowed under the laws of Nigeria; Imports of plants and machinery,  spare parts and packaging materials required for export-oriented production that cannot be sourced locally.

Others are resuscitation, expansion, modernization and technology upgrade of non-oil export industries; export value chain support services such as transportation, warehousing and quality assurance infrastructure; working capital/stocking facility; and structured trade finance arrangements.

The CBN said term loans under the facility shall not exceed 70 per cent of verifiable total cost of the project subject to a maximum of ₦5,000,000,000.00, adding that the NESF shall have about 10 years tenor and shall not exceed December 31, 2027.

Furthermore, the guidelines said that working capital/stocking facility shall be for one year with the option of roll-over once, subject to CBN’s approval, stressing that the Facility shall be granted at an all-inclusive interest rate of nine (9) per cent annually, while interest charges during Project Implementation/Construction; and Interest charges during implementation/construction phase of the project shall be dependent on the status and transactional structure of the projects.

The guideline stated that capitalization of interest – interest payable during the implementation and construction period shall be added to the total facility, subject to the 70 per cent limit on total cost of project.

On loan repayment, the guidelines stated that; repayments of principal and interest shall be quarterly and in line with the agreed repayment schedule, including a one year moratorium while in case of construction, option of roll over for a period of up to one year may be allowed, subject to approval by the CBN.

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