The Nigerian Export Promotion Council (NEPC), government agency responsible for the promotion of non-oil export sector, has been urged to establish rapport between commercial banks and the Nigerian Export-Import Bank (NEXIM) to facilitate credit to micro, small and medium enterprises (MSMEs) at low cost.
Ijeoma Ezeasor, branch consultant, Manufacturers Association of Nigeria (MAN) – Anambra, Enugu and Ebonyi states, who made the plea at a business round table, tagged ‘Export Business/Bankers’ Round table,’ organised by the Enugu zonal office of the NEPC, said that access to finance was crucial for the survival of any business.
Ezeasor in her paper titled, ‘Minimising barriers to non-oil export financing in Nigeria – the way forward,’ said MSMEs face numerous obstacles in procuring financing resources, even when the economy was booming, because financial markets were averse to risk taking.
She said that most Nigerian commercial banks were only interested in facilitating importation and were reluctant to finance exports.
In her words, “there is generally poor access to credit at pre-shipment and post-shipment stages. Typically, loan financing is characterised by high cost of interest rate and low volume of credit disbursement.
“High cost of finance does not allow the firms to modernise operations, which results in poor quality goods or low value addition to commodities for export.”
Ezeasor also observed that banks lacked effectiveness in handling small, medium or long-term credit risk of exporters, resulting in entrepreneurs being burdened with very high credit requirements.
Chike Obidigbo, chairman, Hardis and Dromedas Limited, who presided over the forum, urged the Federal Government to increase its export within Africa, stressing that intra-African trade could be the panacea for Nigeria’s economic development.
According to him, “export is all about stiff competition on a global scale. As such, a country and its manufacturing industries can only profitably enjoy vast export markets in products it enjoys competitive and comparative advantages.
“It can help local firms establish and strengthen product value chains and facilitate the transfer of technology and knowledge through spill-over effects.”
He regretted that the volume of Nigeria’s trade with neighbouring African countries was very low, saying that most of Nigeria’s exports were targeted at advanced economies from most of which, she sources imports, while Asian countries were engaged in active trade with their neighbours.
Esther Ikporah, controller, NEPC, Enugu zonal office, organisers of the forum, said the council hosted the business round table, second in the series, to create an avenue for dialogue between the financial institutions and exporters towards addressing the challenges of finance in export business.
She expressed gratitude to Segun Awolowo, executive director/CEO of NEPC, for his unflinching support and passion to move the non-oil export sector to enviable heights.