The African Export-Import Bank (Afreximbank) and the Nigeria Export-Import Bank (NEXIM) have expressed readiness to mobilise 50 million dollars as Joint Project Preparation Fund for investments in Nigeria.
The organisations said this in a joint statement issued in Cairo, Egypt and Abuja on Wednesday.
According to the statement, both organisations signed a Memorandum of Understanding (MoU) to establish the fund.
”The fund will provide early project preparation financing and technical support services to public and private sector entities operating in Nigeria’s trade sector.
It added that under the terms of the MoU, they would collaborate through the preparation fund to unlock investments into sectors such as export manufacturing, agro-processing and solid minerals development.
Others are beneficiation services, healthcare, Information and Communications Technology and creative industries.
The fund expected to support public and private sector investors by providing technical and financial support services would result in a steady pipeline of well-structured, bankable projects that Afreximbank, NEXIM and other financial institutions could readily finance.
It would also assist the early development process of projects from concept stage to bankability by covering the preparation of feasibility studies, project development and advisory services and related costs.
In the statement, Prof. Benedict Oramah, President of Afreximbank, said the execution of the MoU marked yet another significant milestone in Afreximbank’s collaboration with NEXIM.
He added that he was pleased that both banks were boldly venturing upstream to help investors develop well-structured projects that met market standards.
“This intervention is timely as the fund will play a catalytic role in accelerating the diversification of the Nigerian economy by ensuring a steady flow of bankable projects in priority tradable sectors in a timely manner.
“In addition to enhancing bankability, the fund will, on a case-by-case basis, undertake feasibility studies to assess the viability of accessing markets in the sub-region, thereby promoting intra-African trade under the AfCFTA.
“We are pleased to be replicating a similar initiative we pioneered in Malawi in partnership with Malawi Export Development Fund (EDF) and look forward to more opportunities across the continent,” the statement read.
Mr Abba Bello, Managing Director of NEXIM, also said he was pleased by the opportunity to partner with Afreximbank in proffering a solution to one of the major challenges that have limited the flow of credit to the Nigerian export sector
He said the fund was designed to mitigate the project selection challenges, particularly amongst the SMEs, towards boosting their contribution to formal exports.
“This technical expertise will therefore enhance NEXIM’s implementation of its export development programme, especially with regards to the State Export Development and industrialisation initiatives.
“This partnership strongly aligns with NEXIM’s mandate and strategic plan and will no doubt facilitate its intervention towards attracting critical investments in trade enabling infrastructure and the promotion of value-added exports.”
The statement added that the fund constitutes a direct response to complement Nigeria’s initiatives to address the twin challenges of the COVID-19 pandemic.
It would also address existing economic difficulties associated with the country’s dependence on crude oil revenues, which account for 50 per cent of consolidated government revenues, 30 per cent of banking sector credit and 90 per cent of export earnings.
“The partnership aligns with Afreximbank’s broader mandate to develop, facilitate and accelerate intra-African trade, it added.