“The mandate of the Nigeria Export-Import (NEXIM) Bank, as an agency of the Federal Government, is to grow the non-oil export by participating in its financing.”
This mandate, as stated above by its Managing Director/Chief Executive, Mr. Abba Bello, received a fillip when the Central Bank of Nigeria (CBN), last December, reinstated the ₦500 billion Export Stimulation Facility (ESF) as well as NEXIM’s ₦50 billion Direct Intervention Fund (DIF) to boost the non-oil export.
At Beloxxi Industry Limited, Agbara, and Multi-Trex Integrated Foods Ltd, Wawa, both in Ogun State, last week, Bello gave hints on how the fund would be deployed to boost non-oil export in the country.
He explained: “With the dearth of biscuit manufacturing in Nigeria, it meant that most biscuit consumed in Nigeria was imported. So, Nexim came in to support Beloxxi from the outset of the business. First for import substitution, and then to facilitate the export of Beloxxi biscuits. What we’re doing today is expansion of the plant and finance.
“NEXIM’s contribution is in the region of ₦1 billion, and as we are talking now, Beloxxi has even paid up the facility and we are having discussions on granting further enhancement and new facilities. We wish this could be multiplied a thousand times across the length and breadth of this nation for creation of employment and value addition, as well as export from the same axis and manufacturing plant. That is what we are campaigning for, that we should produce, add value and export”.
When NEXIM team and members of the House of Representatives Committee on Banking and Currency visited Multi-Trex at the weekend, the NEXIM boss said:
“This is one of the best projects we have supported under the ESF because the equipment are there. What they need is just working capital, which means, whatever we lend will be turned around. Maybe every 180 days. By the end of the second quarter, we should be able to finance the project.”
Recall that at a meeting with the export stakeholders last December, the CBN Governor, Godwin Emefiele, had said they were planning to introduce an initiative called PAVE, meaning Produce; Add Value and Export for various products in the non-oil sector such as cocoa, cashew nuts, palm produce, sesame seeds, solid minerals and rubber.
He added: “Like we all agreed at the meeting, that there was a time we were exporting, but up till recently, the export we really conduct now is more of raw agricultural produce. We are saying that in order to create jobs for our people, there is a need for us to advance further to value addition and begin to talk about processing of exportable items. Rather than exporting raw cashew, we are thinking of exporting processed cashew. Rather than exporting raw cocoa, we are thinking of giving support to companies that process cocoa to cocoa butter and cakes and all that. We also know that there are some of the Nigerian companies that have benefited from some of our export stimulations facilities in the past and some of them still remain moribund. And we have also told our development finance department to take a look at companies like Multi-Trex. There is also another company that is into cocoa processing somewhere in Ibadan. We are going to be working with them to see that we really get their production back on track. By doing this, we are going to be creating more jobs for our people. Other than just creating jobs, we will see that it will afford opportunity to increase our export earnings for the good of the country because those export earnings are also necessary.”
The Vice Chairman/Managing Director of Multi-Trex, Mr. Dimeji Owofemi, explained to the visitors that if the company is revived, it could create 1,500 jobs and process 65,000 tonnes of cocoa at full capacity. He stated that what is needed to bring it back to life is between N4 billion and N5 billion working capital.
He added: “The CBN is also making efforts. They have addressed exporters that they are going to set up a N500 billion fund and also another N50 billion for NEXIM to help exporters like us. The CBN Governor sounded very serious on December 8 when he called all of us to his office and was particularly interested in Multi-Trex. At Multi-Trex, we add value to a major agricultural commodity in the country, cocoa.”
On how the company became moribund, he said: “We were forced to finance the expansion with loans, whereas at the beginning, we set out to raise equity. But it was during 2008 when our private placement had a technical failure because it was beyond our control to force those who underwrote the facility to pay up. We erred on the side of perfection by obtaining a cheque against their underwriting. For that reason, we couldn’t force them to go beyond 50 per cent of what they underwrote. At the time we did the N6 billion, we would have been sufficient. But because we started when the exchange rate was N114 to the dollar, and finished it at N140, N155. Even at that, it has become a goldmine for an investor that has a discerning mind. But most investors want reward for yesterday while the investment is done today. Unfortunately, in practical terms it doesn’t work that way. That is how we got to where we are today.”
In his comment , the Chairman of the Committee, Jones Onyeriri, pledged his committee’s support to encourage the private sector.
He said: “We are excited that we visited Multi-Trex today for the simple reason that it is part of our oversight function because we oversee the operations of NEXIM. But more importantly because of our belief that we need to encourage the private sector. My committee has been on this drive for more than six years. We believe that the middle class in Nigeria is completely extinct. And the only way to recreate the middle class will be to encourage the private sector. It is very annoying that we pride ourselves as the biggest conomy in Africa and yet, our private sector contribution to GDP is next to nothing.
“The machinery is on ground, as I said earlier on; we must encourage the private sector. That is the only way to grow the economy. If we don’t grow the real sector of the economy, we are just joking.”
Bello, corroborating Owofemi on how to revive the plant, said:
“The N500 billion ESF is ready for disbursement. Right now, we are ready to start processing Multi-Trex application. What we are waiting for is the terms of settlement, the resolution between them and AMCON because AMCON should be able to release them for them to be able to borrow. So once AMCON gives them the approval, then we are good to go.”