New export items have emerged in the Nigerian export market as a result of the encouragement given exporters by the depreciation of the naira through the Second-Tier Foreign Exchange (SFEM).
This was disclosed by the director of Exchange Control, Central Bank of Nigeria, Mr. Victor Odozi at a symposium organised recently by the Lagos Chamber of Commerce and Industry, banking and finance houses trade group.
He gave the list f such new export items as yams, fruits and vegetables, baskets, cotton print, lager beer, plastic products, bitumen, scrap metal, columbite, crude glycerine etc.
This he said was made possible as a result of the boost SFEM has given to export through increased earnings from export commodities.
Realising the current cash squeezes facing the economy as a result of the introduction of SFEM and in order to make fund readily available to exporters, the Central Bank started the operation of an export bill finance scheme. It is called refinancing and rediscounting facilities in1987. The scheme provides credit for banks which fund export. Such banks receive credit from the CBN after the receipt of a promissory note.
The Central Bank gives 75 per cent cover of the value of banks export financing holdings (portfolio) for non-oil exports of no less than N5 million in turn over. Such export must be insured by the Nigerian Export Credit Guarantee and Insurance Corporation, NEXIM.
The scheme is similar to Britains Credit Guarantee. Department and the Export Import Bank of United States.
This facility, it is hoped, will help banks shed off much of the short term load of export financing.
The refinanced bank is only asked to pay the principal and interest on the promissory note when it is matured and is presented by the Central Bank.
The scheme of course, is not an insurance against loss by a bank but a safety device against liquidity crisis.
The Central Bank, under the rediscounting aspect of refinancing and rediscounting facility undertakes to offer direct rediscounting of export bills for banks through acceptance of inland bills of exchange. Individual bank that funds export assumes liability in respect of possible exchange losses when the Central Bank presents the bills for repayment of principal and interest.