IN order for Nigeria’s non-oil ex-port sector to grow and contribute meaningfully to the Gross Domestic Product (GDP), the Federal Government may need to increase access to finance for export activities, the Nigerian Export Promotion Council (NEPC) has said.
The NEPC said that the Nigerian non-oil export sector witnessed an impressive growth recording over $2 billion in 2012 as against $1 billion recorded in 2011.
The Acting Executive Director, NEPC, Aliu Lawal, said the growth represented an increase of more than 50 per cent.
He explained that access to finance remains a big challenge in spite of efforts of the government in providing some interventions to some sectors insisting that it was a common knowledge that accessing financial facility from specialised and commercial banks by exporters had not been easy, due to lack of sufficient collateral for the loans; high cost of borrowing and lack of basic knowledge about alternative funding sources.
Lawal said: “The export sector could do better with appropriate financing. Most often, the bankers perceived export business as high risk largely due to lack of knowledge about alternative funding sources. The bankers therefore chose to concentrate more on financing the import sector.”
Lawal, at a practical session and workshop on access to finance for export, said the sector has been growing very fast in the last five years, adding that the country currently exports about 117 products to more than 103 countries.
“With the abundant resources at our disposal, Nigerian export could do better if the financing requirements are provided,” he pointed out.
He stressed that the objective of the programme was to create a platform that will further facilitate the creation of a synergy that will fast-track a better understanding and cooperation between bankers and the exporting community that requires financial facilities.
He noted that the Nigerian Export Import Bank (NEXIM)’s intervention in the non-oil export sector from 1991 to 2012 under various interventions stood at N89.7 billion but stressed the need to do more in order to encourage the sector.
“On our part, the council is fully committed to collaborating with the bankers and exporters in the promotion and development of Nigeria’s non-oil exports.
“As you are aware, the NEPC is the apex agency of government charged with the responsibilities of developing and promoting non-oil exports with the aim of diversifying the economic base of the country,” he stressed.
Also speaking at the event, the Acting Zonal controller, NEPC Lagos, Mrs. Evelyn Obidike said one of the critical determinants for businesses to succeed in export trade is access to finance, adding that finance has hitherto become a major constraint that needs to be addressed.
She said it was as a result of this, the NEPC in tandem with its mandate of facilitating non-oil export is organising capacity building and training workshop to offer tremendous support to exporters by bringing into limelight an array of available financial options and tools.
“To ensure practicability, this workshop has been designed to feature export finance institutions, commercial banks, specialised financial institutions such as the Bank of Industry (BoI) and Central Bank of Nigeria (CBN). These institutions are here to advise exporters on available funding options, export trade finance tools and train them on how to create business plans that are bankable,” she stated.