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N14.6bn bad loans: NEXIM Bank sends EFCC after defaulters

By Oscarline Onwuemenyi
The Nigerian Export-Import Bank, NEXIM, has invited the Economic and Financial Crimes Commission to help in its efforts to recover about N14.6 billion owed the bank by some customers who are mainly export-oriented companies and individuals.

The Managing Director and Chief Executive Officer of NEXIM, Mr. Roberts Orya, who disclosed this in an interview with the media in Abuja, prior to his visit to Berlin, Germany as part of the Nigeria @ 50 celebrations on the invitation of the Nigerian embassy, noted that the new management of the bank was committed to revamping the fortunes of the institution and reposition it for greater efficiency.

He said, “Since we came in August last year, we have had to grapple with a lot of challenges including accumulated losses and a depleted share capital. This has affected the bank in the pursuit of its mandate, which is to support businesses in the production and export of non-oil goods.”

According to him, the bank has resolved to engage some debt collecting agencies and the EFCC to collect some of the debt that is owed it.

“We resolved to engage the EFCC to collect more than N4.5 billion of such bad and non-performing loans that we consider have a criminal element,” he stated.

He added that, “So far, we have been able to recover about N450 million of the bad debts. We have resolved to work closely with the EFCC to ensure that the debts are recovered and those involved in abuses are punished.

He, however, noted that the board of NEXIM was careful in its approach to collecting the debt because of the political sensitivity attached to the process. “We have engaged all relevant agencies including the Ministry of Finance, the Central Bank of Nigeria and the Ministry of Justice and the EFCC, but as a government institution, we are cautious that our efforts are not misconstrued as political vendetta against some elements.

“Indeed, we have got some good judgments against some of the debtors, but the poor market conditions have not made it possible for us to dispose some of the assets we have seized,” he added.

According to the NEXIM boss added that the bank has lost N10.03bn following the inability of its debtors to pay back loans.

Orya said, “The bank’s total loan portfolio as at August 20, 2009 was N14.6 billion out of which 72 per cent was non-performing and within that category, N10.03bn or 69.09 per cent was classified as completely lost.”

He added that there had been a depletion of the bank’s shareholders’ funds from N15.85bn to about N9.33bn as a result of accumulated losses, adding that the bank’s misfortunes had been marked by significant decrease in income, high cost and poor record keeping.

“This has resulted in increased provision for bad and doubtful debts and in turn a significant rise in the bank’s loss position. The increasing loss, when added to the negative reserves of N2.2bn carried forward from December 2008, also resulted in the depletion of shareholders’ funds from N15.85bn to N9.3 billion,” he added.

Orya, however, informed that the management of the bank was re_organising its structures to put it on a better footing in facing the challenges before it, adding that the bank would fresh require injection of at least N50 billion for it to be able to carry out its functions effectively.

According to him, plans are underway to cut the size of its workforce to make it manageable and productive. He further noted that the Federal Government had provided N3bn in the 2010 budget to strengthen the capital base of the bank.

On his mission to Berlin, Germany on the invitation of the Nigerian Embassy there, Orya observed that it would “avail us the opportunity to let the world know the emerging investment climate in Nigeria, even as we hope to engage our partners in Germany and Europe on various issues as affects our mandate.”

He added that the visit would equally present an opportunity to engage Nigerians in the Diaspora on investment opportunities in the country, especially in trade and export, adding that there were enormous resources among the Diaspora that needs to be channeled back into the country as investments.

He said, “We are dedicated towards channeling the immense energy and resources of Nigerians in the Diaspora, in Germany and Europe, towards the economic development of the country.

“We are aware that remittances by Nigerians living abroad continue to rank among some of the highest globally, and our plan is to channel those into more effective use in the effort to expand our national economy.”

NEXIM, he said, would continue to collaborate with development promotion and financing institutions in enhancing the capacity of Nigerian businesses to compete in the global market.


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