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The Nigeria Export Import (NEXIM) Bank plans to spend about $40
million (N6 billion) within the next two years to support potential buyers of
Nigerian products in order to boost the country’s export market.

Managing director and chief executive, Roberts Orya, told
reporters in Abuja on Wednesday that the aim is to make Nigerian products more
competitive within the sub region.

“As part of our mandate to facilitate and promote Nigeria’s
trade, NEXIM has engaged consultants in the region to develop a sea-link
project, which is expected to culminate in the establishment of a company to be
owned by investors from all ECOWAS sub-region, to facilitate sea transportation
of goods across the region,” Mr. Orya said.

Potentials and opportunities

According to him, the bank has set an ambitious target on how to
deepen cross border trade and payment system within the Economic Community of
West African States (ECOWAS) sub-region and Africa, to make it the traditional
market for exporters, as is the practice in most EXIM (Export Import) banks
around the world.

“What we have in the ECOWAS or the Central African region is a
non-traditional market, which nobody wants to go and do business, while we
allow other countries’ EXIM banks to take advantage of the huge potentials and
opportunities.

“If trade in the sub-region is deepened, it will help create
jobs and halt capital flight within the region, while every benefit that go
with deepening of trade would come to the region,” he said.

In order to discontinue the current scenario of huge non
performing loans among its clients, he said the institution has resolved to
follow stringent conditions in approving fresh facilities to prospective
beneficiaries.

Out of a total portfolio of over N10 billion recorded in its
books as non-performing loans to various groups since 2009, the bank has been
able to recover less than N1billion.

Tackling non performing
loans

“Loan recovery is usually a challenge in Nigeria. As at August
2009, the total amount of non-performing loans that had 100 per cent provision,
based on the grading of the prudential guidelines, was only N10.03 bilion.
NEXIM was able to recover about N540 million that year; less than N300 million
was recovered between January and December last year,” Mr. Orya said.

A special remedial management department, he said, has been
established charged with the responsibility of following up on customers on a
daily basis to help reduce the high level of non-performing loans, while
stricter conditions are to be adopted in approving future loans facilities.

“We have decided to carry on this transformation, knowing that
going forward, any credit to be created must be of good quality. Apart from the
one per cent general provision that the prudential guidelines require the bank
to make, we do not want to create any bad loans. We have taken time to
establish the pillars necessary to ensure that the bank does not go the same
way in the next two to three years, in terms of bad loans.

“We have learnt from our mistakes. We must ensure that any money
that is given is judiciously used. Any exporter that is not prepared to comply
with our conditions would not be attended to, as there are no political loans
in NEXIM. Any project that the bank must support must be bankable and viable.
Such projects must not only be able to pay back itself, but must also be seen
by all that the capacity is there to do so,” he declared.

He said the bank would henceforth be more concerned with its
ability to generate more foreign exchange for the country as well as facilitate
jobs creation, pointing out that only businesses with healthy balance sheets as
well as those with proven capacity to make sufficient returns to their
shareholders and those in a position to approach the international capital
market to raise money and have good relationships with other EXIM banks around
the world enjoy its patronage.

According to him, Nigeria, with a population of over 150
million, is well-placed to control the political and economic advantages within
the ECOWAS sub-region, pointing out that NEXIM, as Nigeria’s trade policy bank,
is poised to take up the challenge.