The Nigerian Export Import Bank (NEXIM), which was almost moribund and had nearly disappeared from the consciousness of many Nigerians and businesses, has resurged from the crypt, roaring to live up to its billing as the nation’s export development bank. SULAIMON OLANREWAJU reports.
FROM a financial institution enmeshed in insolvency and battling with irrelevance, the Nigerian Export Import Bank (NEXIM) Bank has become a profitable enterprise, posting impressive returns.
As an export credit agency established in 1991 to facilitate non-oil export, NEXIM started on a promising note. But along the line, the company headed south, piling up non-performing loans and posting losses. This got to a head in 2016 when the bank recorded a loss of N8.03bn. The following year, 2017, the loss was reduced to N567 million.
But the tide changed when Mr Abba Bello was appointed the bank’s Managing Director as the financial institution moved from being in the red to being in the black within a year, posting a profit of N1.09 billion in 2018. This rose to N2.23 billion in 2019. In 2020, as a result of the COVID-19 pandemic, the bank’s profit slid to N1.28 billion.
According to Bello, during an interactive session with journalists recently, “The profit decline in 2020 was due to the impact of COVID-19 on businesses, which necessitated the interest rebate and moratorium extension granted by the bank to its customers.”
Bello added that he and his colleagues had plans to grow the bank’s balance sheet to N1.2 trillion by 2022. He noted that the balance sheet grew from N67.73 billion in April 2017 to N158.84 billion as of January 31, 2021.
Speaking on how he and his management team changed the fortune of the bank, Bello said the current leadership came up with a strategic plan to reposition the bank shortly after it took over its management on May 2, 2017.
According to him, “The strategic plan was articulated towards improving operational performance, achieving the bank’s mandate and contributing to meeting the objectives of the Federal Government of Nigeria under the economic Recovery and Growth Plan.
“With the strategic plan came the introduction of aggressive debt recovery. The introduction of aggressive debt recovery and proactive loan work out measures led to increase in overall recoveries from only N200 million in December 2016 to N4.76 billion and $750,000 between January 2018 and January 2021. In addition, assets worth about N7 billion are currently up for sale.
“We have continued efforts to clean up the balance sheet and ensure improvement in risk management practices with new loans granted from 2018 performing 100 per cent, a major departure from the huge non-performing loans in the past.
“We have also enhanced operating model through restructuring of regional offices for the bank to maintain presence in each geo-political zone of the country for better market penetration and nationwide coverage.”
The NEXIM boss said the bank undertook some special interventions which sustained over 11,000 jobs between 2018 and January 2021 and generated exports of about $200 million, which came largely from trading of Nigerian exports. He added that the $200 million generated within the three-year period was significant because in its 30 years of existence, the bank had only generated $1.3 billion from exports.
Bello, who said the bank was determined to make the support of Small and Medium Enterprises (SMEs) its major focus, added that “Following effective stakeholder engagements and high level of confidence in the current management, the Central Bank of Nigeria (CBN) released N50 billion to the bank in February 2018 to implement the Export Development Programme (EDP). The Fund was further enhanced to N100 billion in December 2020 following effective utilisation.”
He added that “the bank is also collaborating with the CBN to manage the N500 billion Non-oil Export Stimulation Facility, which has been introduced to provide long-term funds to export- oriented projects.”
Bello explained that under the EDP, the bank had processed 227 applications worth N159.27 billion and $37.67 million, out of which N98.87 billion had been approved. He also stated that 68 beneficiaries had received N68.01 billion, while approvals totaling N30.86 billion were in the process of meeting pre-disbursement conditions.
The NEXIM bank boss said that “So far, $182.31 million and €203,018.42, translating into N70.4 billion, have been received as export proceeds from projects that have repatriated their income, while others are yet to complete the transaction circle.
“Many of the institutions supported now feature on the list of top 100 exporters published annually by the Central Bank of Nigeria.”
The Managing Director said NEXIM, being the country’s export development bank, has the statutory responsibility of developing key exportable commodities, unlocking opportunities and de-risking key non-oil export sectors to facilitate investments and increase the flow of credit, towards achieving the diversification objectives of the federal government of Nigeria.
Towards achieving this, Bello said the bank had over the past three years operated under the philosophy of Produce, Add Value and Export (PAVE) to change the current situation of the dominance of primary products in the country’s export basket.
“Hence, in addition to supporting start up projects, a lot of emphasis was placed on providing working capital to resuscitate many industrial projects, which have hitherto become moribund or operated below capacity towards boosting our value-added exports and enhancing job creation,” he said.
The MD added that the interventions cut across sectors such as manufacturing, agriculture, solid minerals and services.
Giving highlights of the bank’s intervention in the hides and skin industry, Bello said, “The bank’s objective is to harness opportunities in the global leather industry. Hence, the bank is working with the leather cluster in Kano, having funded about three companies and assisted them to acquire new machines and retool their operations towards becoming major players in the global value chain.”
On Shea industry, Bello said, “The bank is currently supporting various projects in Lagos, Ogun and Niger states. NEXIM’s intervention and support for the acquisition of Shea processing plants led to the first major export of Shea butter from Nigeria in March 2018. Prior to NEXIM’s intervention, Nigeria had no significant footprint in the export of Shea products due to low processing capacity and high incidents of smuggling/informal trade. This is in spite of Nigeria’s ranking as the world’s largest producer of Shea, with annual production of 364,000, accounting for 45 per cent of global output.”
According to him, as a result of the bank’s intervention in revitalising existing cocoa processing plants, Nigeria is poised to maximally benefit from the global cocoa value chain put at $130 billion.
Similarly, the bank’s intervention in the solid minerals sector through the provision of machinery, equipment and working capital has positioned the country for reaping unprecedented benefits from the exportation of over 34 solid minerals.
The MD said concerning the pharmaceutical industry, “Against the background of the COVID-19 pandemic and the opportunities in the regional market, the bank is supporting major pharmaceutical companies with equipment and working capital finance towards retooling and upgrading their operations to World Health Organisation’s (WHO) standard towards the production and exportation of pharmaceutical products.”
Bello said in consonance with NEXIM Bank’s trade facilitation role and towards enhancing Nigeria’s readiness under the African Continental Free Trade Agreement (AfCFTA), the bank spearheaded some initiatives such as The Sealink Project, the Inter-State Road Transit Scheme and Factoring Services.
Speaking further on these, he said, “The Sealink Project is aimed at fostering regional trade connectivity and facilitating inland waterways operations to support hinterland trade and bulk commodities exports, especially of solid minerals. Efforts are being intensified with NIWA, Nigerian Navy and other private sector partners to ensure commencement of operations within Q2, 2021.
“Inter-State Road Transit Scheme is designed to facilitate the transportation of goods by road across Customs territories free of duties, taxes and restrictions while in transit in line with ECOWAS protocol. NEXIM is the National Guarantor under the scheme whose role is to issue insurance bond to mitigate the risk of division.
“Factoring services is being promoted to engender financial inclusion and provide alternative trade financing support for MSMEs.”
Bello, speaking about the future of the company, said, “To mitigate the adverse impact of COVID-19 pandemic on the export sector and position Nigerian exporters to increasingly benefit from the opportunities provided by AfCFTA, as well as the increasing focus of Russia and European Union (EU) on Africa, the bank in the next two years will continue to implement its key intervention programmes.”
According to him, the programmes include export basket/market diversification programme, which is made up of three components towards the promotion/support of processing of primary agricultural produce for value-added exports. Others are bridging key export facilitating infrastructure, regional industrialisation for exports, improving export packaging/handling and export value chain financial inclusion strategy.
The managing director expressed confidence that with these interventions and the commitment of the management to see them through, the bank is set on an irreversible growth trajectory.
Abba Bello and his management team have shown that the basic requirement for putting an organisation on the path of growth is emplacing the right leadership. By coming up with a compelling vision, a well articulated strategy and its penchant for execution, the Bello-led administration has not only justified the confidence reposed in it by the federal government, it has also brought NEXIM back from the crypt to the delight of many Nigerian businesses and the benefit of the whole country.
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