AfDB boosts export-oriented SMEs in Nigeria with N11bn LoCs to BOI, NEXIM

Posted: February 6, 2013 in general

The African Development Bank (AfDB), Tuesday, signed a landmark agreement to provide two sovereign-guaranteed multi-tranche lines of credit (LoCs) worth $700 million (about N11billion) with US $500 million to the Bank of Industry (BOI) and of US $200 million to Nigerian Export-Import Bank (NEXIM), respectively in order to support the modernization and expansion of export-oriented small and medium enterprises (SMEs).

The LoCs will allow local SMEs to be more competitive, scale up their operations and ultimately create more jobs in Nigeria, just as it will also include a technical assistance package to strengthen institutional capacity of both  BOI and NEXIM as well as their SME clients.

Remarking in Abuja, Ousmane Dore, AfDB’s Resident Representative in Nigeria, said that with the LoCs, the export-oriented SMEs will be able to become more competitive, ensure sustainable growth of their operations and generate employment in the Nigerian productive sectors.

“This AfDB combined program will contribute to mobilize significant financial resources for Nigerian export-oriented SMEs, ultimately contributing to economic development, employment opportunities, foreign exchange and regional trade integration,” said Dore.

Through this integrated financing package, the AfDB said it was supporting Nigeria’s efforts towards a more diversified economy away from oil and gas, as the LoCs are expected to supply multi-sector financing to address the challenge that SMEs face in accessing finance in the country.

Also commenting, Robert Orya, NEXIM Managing Director, added: “Thanks to AfDB’s support through this programme, NEXIM seeks important economic development achievements, including approximately 55,000 new jobs for its SME clients, US $1.6 billion in foreign exchange and an overall contribution of almost seven per cent to non-oil exports, including a 10 per cent share in Economic Community Of West African States (ECOWAS) exports. This 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.”

On her part, Evelyn Oputu, BOI Managing Director, said: “The AfDB’s operation, contributing to capital market development and government revenue, is likely to generate significant additional lending to our export-oriented SMEs client at a time when it is sometimes difficult for commercial banks to finance this important sector of the Nigerian economy.”

Bank of Industry (BOI) is the leading catalyst for industrial development resources in Nigeria and one of the oldest development finance institutions in Africa. It was established in 1964 and reorganized in 2001. In line with its mandate to finance industrial development projects, BOI provides term finance and advisory services primarily to indigenous SMEs, to which it devotes at least 85 per cent of its resources.

Nigerian Export-Import Bank (NEXIM) is the national export credit agency of Nigeria. It was established by Act 38 of 1991 with a mandate to provide export credit, export guarantee and export credit insurance as well as export advisory services to export oriented companies, particularly SMEs in the non-oil sector.

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