The Central Bank of Nigeria (CBN) has unveiled a N500 billion low interest rate credit fund designed to boost non-oil exports. Announcing the introduction of the facility, the CBN said that “The Non-Oil Export Stimulation Facility (ESF) was established to diversify the economy away from oil and to expedite the growth and development of the non-oil export sector.”
According to the guidelines for operating the fund, “the CBN will invest in a N500 billion debenture to be issued by Nigerian Export-Import Bank (NEXIM) in line with section 31 of CBN Act. The Nigerian Export – Import Bank (NEXIM) shall be the Managing Agent of the Non-Oil Export Stimulation Facility (ESF). It shall be responsible for the day-to-day administration of the Facility and rendition of periodic reports on the performance of ESF to CBN.
On the interest rate to be charged on the loans, the guidelines stated, “Facilities with a tenor of up to three (3) years, would be granted at a maximum all-in interest rate of seven and half percent (7.5%) per annum; Facilities with tenor of over three (3) years, would be granted at a maximum all-in interest rate of nine percent (9%) per annum.
The fund can be accessed to fund export oriented activities including: “Export of goods wholly or partly processed or manufactured in Nigeria; Export of commodities and services, which are permissible and excluded under existing export prohibition list; Imports of plant and machinery, spare parts and packaging materials, required for export oriented production that cannot be produced locally; Export value chain support services such as transportation, warehousing and quality assurance infrastructure; Resuscitation, expansion, modernization and technology upgrade of non-oil exports industries and; Stocking Facility/Working capital”.
On the duration and limit of loans accessed through the fund, the guidelines stated, “The Facility shall not exceed 70 percent of the total cost of the project or transaction subject to a maximum of N5 billion.
“The ESF shall have a tenor of up to 10 years and shall not exceed the 28th of December, 2025. Stocking facility shall be for a maximum tenor of one year with the option of roll-over not exceeding twice. However, this shall attract an additional fee of 0.25 percent per annum of the loan amount and is subject to approval of CBN. Working capital facility shall be for a maximum tenor of one year with the provision of roll-over not exceeding twice. However, this shall attract an additional fee of 0.25 percent per annum of the loan amount and is subject to approval of CBN.”
Meanwhile, the CBN has also extended the Export Rediscounting Facility of the Nigeria Exim Import Bank (NEXIM) by N50 billion. This according to the apex bank is to “To ensure continuous flow of credit to the export sector at competitive rates, especially against the background of declining export loans and the need to promote sustainable non-oil exports, and also to support the Deposit Money Banks (DMBs) in the provision of pre- and post-shipment finance to exporters to undertake export transactions.”
