African Development Bank (AfDB) has signed an agreement to provide two sovereign-guaranteed multi-tranche lines of credit (LoCs) of $700 million to support export-oriented small and medium enterprise expansion in Nigeria.
A statement issued by Mr Chinedu Muoghalu, Head of Corporate Communication Department, Nigerian Export-Import Bank (NEXIM), in Abuja has disclosed. Muoghalu said the credit would be provided through the Bank of Industry (BOI) and NEXIM bank, which would receive 500 million dollars and 200 million dollars respectively.
“Through this integrated financing package, the AfDB is supporting Nigeria’s effort to diversify her economy away from oil and gas. The LoCs will allow local SMEs’ to be more competitive, scale up their operations and ultimately create more jobs in Nigeria,’’ he said.
According to the statement, the LoCs will include a technical assistance package to strengthen institutional capacity at both BOI and NEXIM as well as at their SME clients.
“The LoCs will supply multi-sector financing to address the challenge that SMEs face in accessing finance in the country. Therefore, export-oriented SMEs will be able to become more competitive, ensure sustainable growth of their operations and generate employment in the Nigerian productive sectors,’’ the statement said.
During the agreement signing ceremony, Dr. Ousmane Dore, AfDB’s Resident Representative in Nigeria, said the bank’s combined programme would contribute to mobilising significant financial resources for Nigerian export-oriented SMEs.
He said it would ultimately contribute to economic development, employment opportunities, foreign exchange and regional trade integration. Also, NEXIM Bank Managing Director, Mr Robert Orya, thanked AfDB for its support and promised that NEXIM bank would continue to support programmes that would help boost the Nigerian export system.
“NEXIM seeks important economic development achievements, including approximately 55,000 new jobs for its SME clients. NEXIM also seeks 1.6 billion dollars in foreign exchange and an overall contribution of almost 7 per cent to non-oil exports, including a 10 per cent share in Economic Community of West African States (ECOWAS) exports. The AfDB facility will provide a great opportunity for NEXIM to make available concessional long-term funding in pursuance of its strategic objectives of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings,’’ Orya said.
The BOI Managing Director, Ms. Evelyn Oputu, said AfDB’s contribution would go a long way in supporting SMEs to help in the growth and development of the economy.
“The AfDB’s operating contribution to capital market development and government revenue is likely to generate significant additional lending to our export-oriented SME clients. This, at a time, when it is sometimes difficult for commercial banks to finance this important sector of the Nigerian economy,’’ Oputu said
