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Diamond Bank, NEPC seek financing solution for exports

By on November 7, 2014

With the increasing need to diversify the economy away from crude oil exports, Diamond Bank Plc, in collaboration with the Nigerian Export Promotion Council, has highlighted the need for appropriate financing solutions for non-oil export trade in the country.

Industry stakeholders including the former Director-General, Nigerian Association of Chamber of Commerce Industry Mines and Agriculture, Dr John Isemede, and the Vice President, Ship Owners Association of Nigeria, Mrs. Margaret Onyema, who spoke at a workshop in Lagos on Tuesday, organised by Diamond Bank and NEPC, also stressed the need to address the lack of adequate financing for non-oil export trade.

The Head, Retail Banking, Diamond Bank Plc, Mr. Jude Aniele, said, “This is the most auspicious time to talk about non-oil export. The reason Diamond is putting efforts in this direction is that we recognise the potential of non-oil export in Nigeria. The sector is going to expand significantly in the next few years, going by what we have seen so far. What is required is support. The banks, government, exporters and the regulators have roles to play. We need to provide funding solutions for export trade.”

The Assistant Director, NEPC, Mrs. Evelyn Obidike, noted that Nigeria’s export trade had increased in volume and value.

“Trade finance is critical to our competitiveness, and that is why we are partnering Diamond Bank to ensure that available solutions are made public and also fashion out solutions to meet the needs of exporters,” she said.

“This will enable our exporters to compete not only in ECOWAS, but also in the global export market,” Obidike said.

According to the Head, Trade Products, Diamond Bank, Mr. Idoko Sylvester-Onoja, products from the country are in various markets in Africa, Europe, Asia and the Americas, with cocoa and its preparations accounting for $758.64m in 2013, representing 26 per cent of the total exports.

Netherlands emerged as the top importer of Nigeria’s non-oil exports with a total of $583.334m in 2013, he said.

He said key non-oil sectors that contributed remarkably were manufacturing, agro-processing, solid minerals and services, with products including bathroom slippers, glass wares, cosmetics and care products, food and beverage, steel, aluminum and chemicals.

According to him, the issues bedeviling the non-oil export segment include lack of incentives, distribution gridlocks, poor business environment and poor financing.

He said documents required by the Central Bank of Nigeria to be submitted before any legal export could take place comprised a completed original NXP form, a copy of NEPC licence, a valid proforma invoice, a completed original Cobalt RFI form and certificate of incorporation.

Sylvester-Onoja said most export contracts often secured by exporters in Nigeria were predominantly on open account basis, least secured, adding that a letter of credit was rarely utilised.

“Cash in advance is often given by desperate importers or importers who have confirmed the exporter’s ability to deliver good quality products on time. Documentary collections are most suitable option for small-scale exporters,” he said.