Yemisi Izuora
The Bankers Committee has offered a N200 billion credit facility to support different stages in the value-chains in export businesses in the country, boost production and export of five cash crops.
The fund is specifically targeting cash crops like Cocoa, Oil Palm, Shea Butter, Sesame Seed and Cashew.
It is also the intention of the Committee to commit a credit facility to support the creative industry with the aim of creating 300,000 jobs in the industry.
The Director, Banking Supervision Department, Central Bank of Nigeria (CBN), Mr. Ahmed Abdullahi who made the disclosure said that the Committee noted the stability in the economy especially improved foreign investors confidence in the nation’s economy which reflected in the $6 billion foreign portfolio investment inflow in the first quarter through the Investors and Exporters (I&E) window.
The Committee however decided to focus on initiatives that will consolidate the pro growth stance of the CBN, via the recent reduction the Monetary Policy Rate (MPR) to 13.5 percent from 14 per cent.
He further said the economy had recorded positive development in spite of the headwinds before the 2019 election period.
Abdullahi said lending to the private sector and the economy generally had increased.
The Director said the committee decided to consolidate on the gains and continue with those initiatives that brought about the growth.
He identified such initiatives as import substitution programme and the anchor borrowers’ programme, among others.
In his explanation, the Managing Director of UBA, Kennedy Uzoka said that the development has led to the decision to set up the fund to boost production and export of cash crops.
He said the N200 billion will be extended as loans to companies producing any of the five cash crops, at single digit interest rate for up to ten years tenor.
“As you know we have always talked about Nigeria been a mono economy, oil only, and many seminars have happened with so many resolutions. But the committee believe we have not made much progress in this direction hence that was the theme of the retreat.
“And in terms of the policies that drive exports, we believe that a lot of them have to be changed. And we know about the congestion at the port. So we looked at all these things and we broke them into immediate, medium and long term because some we cannot address within a short period.” he explained.
Udoka said the committee in 2018 had set up a sub-committee to look into those challenges confronting the nation in diversifying its economy from the stand-point of export.
Some of the challenges identified by the sub-committee included initiatives, logistics, and policy implementation, among others.
According to him, a lot of policies driving export in the country needed to be changed; adding that some had been broken down into immediate, mid-term and long-term.
He acknowledged that some of the challenges were beyond the control of the bank community, as they could not be addressed within a short time, however, the Central Bank of Nigeria (CBN) has different funds supporting export businesses:
“We look at the existing funding structure to know which can address the current challenges.
“Also, we look at the viability of the product in terms of helping export, addressing employment issues and creating the necessary economic activities to boost foreign exchange.”
Also, the Managing Director of Access Bank, Mr Herbert Wigwe, said the committee revisited the agreed facility support for the creative and Information and Communication Technology (ICT) sector.
Wigwe said the four verticals considered in the creative sector were the movie, music, IT and fashion industries.
He also said that the committee had decided to take the industries to the next level and basically revisit the entire value-chain of each of the verticals.
According to him, this will be from the production facilities to the last man in terms of capacity building.
Wigwe said that whatever was being produced along each of the vertical should be of global standard.
He also noted that there would be some advertorials by next week for eligible people to participate in the facility.
The Access Bank chief, however, did not disclose the amount to be disbursed for the sector, but added that the specific amount would be determined by each of the strata the beneficiaries fell into.
According to him, the loans are for maximum of 10 years and also at single digit rate:
“They are reflective of the fact that in this specific industry, what is required is long-term financing at single digit funding and for collateral which is flexible.
“It is a big initiative which will do a couple of things for our country.
“As a starting point, it will lead to about 300, 000 employment in five years’ time.
“It will lead to a significant accumulation of foreign exchange and significant savings.”