•CBN Governor Emefiele
In its bid to diversify the country’s economy away from oil, in line with the Federal Government’s economic plan, the Central Bank of Nigeria (CBN) has announced a revamp of the N500 billion Export Stimulation Fund for the promotion of non-oil exports in the country using the Anchor Borrowers’ Programme model. This is even as the bank has introduced a N50 billion direct intervention funding for the Nigeria Export Import Bank (NEXIM).
CBN Governor, Mr. Godwin Emefiele, disclosed this on Friday while addressing the media following a meeting in Lagos with banks and exporters operating in the non-oil sector. He explained that the intervention was in furtherance of the country’s efforts to diversify the economy and develop sources of foreign exchange in addition to earnings from crude oil. He said that this effort was expected to increase the volume of non-oil exports, which will subsequently increase the amount of foreign exchange inflow into the economy.
“We want to encourage exporters with the N500 billion Export Facility to increase the volume of export earnings that is routed back to the economy to help us grow the economy,”
Emefiele identified the agricultural sector as critical and one that should be developed in the country’s effort to diversify the economy because that was the sector that historically sustained Nigeria’s economy before the advent of oil. He said the new programme would encourage a policy of value addition to agricultural produce before export rather than the current situation of exporting raw unprocessed produce.
Accordingly, he said a team comprising of NEXIM, the Development Finance Department of the CBN and the Office of the Special Adviser to the CBN Governor on Agriculture had been constituted to review the existing framework for the Stimulation Fund on how it will be disbursed, to make it all-encompassing.
He added that the current effort was hinged on a policy of Produce, Add-Value and Export (PAVE) aimed at encouraging exporters to advance beyond merely exporting raw materials to adding value to the products through processing exportable items. Explaining the rationale for this approach, the Governor noted that the processing of agricultural produce before export would create jobs for Nigerians and generate revenue for the country.
Speaking further, the Governor identified some of the agricultural produce that would be supported with the funds to include cocoa, cashew nuts, palm produce, sesame seeds and rubber. He added that the solid minerals sector would also benefit from the facility. As an additional means of both creating jobs and increasing exports, he added that the CBN would provide needed support to revive erstwhile exporting companies of processed agricultural produce that are now moribund.
While acknowledging that some incidences of undocumented export transactions in the system, he called on the exporters to desist from such adding that only documented export transactions would be funded by the intervention.
Mr. Emefiele further stated that before the funding is provided to the exporters, they would have to commit, through their banks and NEXIM, the volume of export earnings to be routed back to the country to support economic activities and other foreign exchange commitments.
A detailed framework for the disbursement of the funds is expected to be released shortly.