The Central Bank of Nigeria (CBN) at the weekend announced to all participating financial institutions and organisations that its implementation of the Non-oil Export Stimulation Facility (NESF) has commenced.
The CBN revealed this in a circular addressed to all commercial banks and Development Finance Institutions (DFIs) posted on its website.
The CBN had in 2016 introduced the NESF to engender growth in the non-oil sector of the economy as well as to drive its foreign reserve accretion.
It stated: â€œThe CBN hereby informs all participating financial institutions that implementation of the NESF has commenced.â€
It urged interested institutions to channel on enquiries on the NESF to its Director, Development Finance Department.
The facility attracts low interest rate and was specifically designed for operators in the non-oil export business.
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.
It further stated that the facility was essentially designed to redress the declining export credit and reposition the sector to increase its contribution to revenue generation and economic development.
It is expected to improve export financing, increase access of exporters to low interest credit and offer additional opportunities for them to upscale and expand their businesses in addition to improving their competitiveness.
The Nigerian Export â€“ Import Bank (NEXIM) shall be the managing agent of the Non-Oil Export Stimulation Facility. It shall be responsible for the day-to-day administration of the Facility and rendition of periodic reports on the performance of facility to the CBN.
â€œFacilities 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.
â€œExport 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, modernisation and technology upgrade of non-oil exports industries and; Stocking Facility/Working capital,â€ the guidelines added.
Furthermore, it stated that the facility shall not exceed 70per cent of the total cost of the project or transaction subject to a maximum of N5 billion shall be for a maximum tenor of one year with the option of roll-over not exceeding twice.