He noted that high-interest rates by banks and low disbursement of credit facilities to finance non-oil export trade remained a major challenge for the nation’s non-oil export business sector.
The Chief Executive Officer of the Nigerian Export Promotion Council, Dr Ezra Yakusak stated this on Thursday while speaking with export desk officers from 29 financial institutions.
Yakusak was speaking during a capacity-building event organised for bankers on non-oil export commodities at the council headquarters in Abuja.
Recall that the Monetary Policy Committee of the Central Bank of Nigeria recently increased the benchmark interest rate to 18.75 per cent from 18.5 per cent in May.
He stressed that the lending institutions’ high-interest rates and low disbursement of credit facilities to finance non-oil export trade adversely affect the nation’s non-oil exports.
The event themed, “Enhancing non-oil export growth through effective export procedures, documentation and logistics” was part of the Council’s effort at strengthening collaboration in promoting export competitiveness to achieve the economic diversification agenda of the federal government.
The NEPC boss in his welcome address, explained the role of the non-oil export sector in the economic development of Nigeria, stressing that the sector presents excellent opportunities for more Nigerians to participate in the global market space to earn more forex.
According to him, most exporters lack the financial muscle required to set up modern export-related industries and production of high-quality products.
As a result of this need, banks must provide financial support to increase the issuance and processing of NXP forms, which led to an export value of $4.8 billion in 2022, he noted.
He stated, “As you are aware, the non-oil export sector plays a very important role in the economic development of our nation. The sector presents excellent opportunities for more Nigerians to participate in the global market space. It is on record that Nigeria is endowed with immense potential in some of the world’s most traded products such as; cocoa, ginger, cashew, soya bean, sesame seed, palm oil, rubber, shea, gum arabic, etc.
“However, statistics have shown that the country is not benefiting maximally from its vast export potential because of a number of issues such as; the knowledge gap, access to finance, cumbersome procedures and documentation, and poor packaging among others.
“These factors constitute significant challenges being faced by exporters. As a matter of fact, access to bank financial services by exporters is one of the major challenges stifling the smooth growth of non-oil export. This is due to high-interest rates and low disbursement of credit facilities to finance non-oil export trade.
“This has ultimately affected the nation’s non-oil export performance because most exporters lack the financial muscle required to set up modern export-related industries and ensure the production of high-quality products.
Further, Ezra asserted that bankers emphasize how banks are an important part of non-oil export trade and need to acquire export knowledge and expertise in order to be able to complement each other more efficiently as they promote export business.
He added, “While I commend some financial institutions for their continuous support to non-oil export business in the country, I also wish to solicit for increased support, through the creation of an export-tailored financial structure that offers greater flexibility and resources to support exporters, especially SMEs in order to increase their capacity to export and diversify their export baskets.”
