Policy somersault: CBN guarantees continuity of Export Stimulation Facility

By Chioma Obinagwam

The Central Bank of Nigeria (CBN) has assuaged concerns from some quarters over the likely collapse of the N500 billion Export Stimulation Facility (ESF) from a policy somersault.

Responding to questions from journalists during a workshop organised by the Finance Correspondents Association of Nigeria (FICAN), Director, Development Finance Department at the CBN, Mudashiru Olaitan noted that the ESF, is a great initiative, which has come to stay.

The N500 billion low interest rate non-oil ESF was established to support the diversification of the economy away from oil and to expedite the growth and development of the non-oil export sector.

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 at a lending rate of 9 per cent, where 1 per cent goes to NeXIM, 2 per cent to the CBN and 6 per cent to the Deposit Money Bank(s), for lending exceeding three years tenure at a maximum tenure of 10 years.

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Although the concerns came from the defunct Export Expansion Grant (EEG), which was introduced by the Federal Government in 1999 to encourage non-oil exports and cushion the effect of cost disadvantages faced by Nigerian exporters due to infrastructural deficiencies, Mr. Olaitan stated that it was suspended because of the report of the Impact Assessment conducted on the project.

“The CBN has funded projects with over N1 trillion. We don’t just stop projects. What we do is an Impact Assessment Report to ascertain the relevance of the project,” the CBN Director said.

“If there’s need for continuity of the project, it will continue. If there’s no need for it, it’ll be halted and if there’s also need for improvement that will be done,” he continued.

So far, Olaitan noted that the project has recorded huge success, particularly, in the Anchor Borrowers’ Scheme, where over 26 states are already partnering with the CBN to grow rice.

“We believe that in the next two to three seasons, we can start exporting rice to other West African countries,” he assured.