President Muhammadu Buhari has insisted that his comments on the economy of Nigeria are based on the true position. Aside from this position that Mr President has expressed, there are empirical fiscal indicators around the country that all is not well with the nation’s economy.
Chris Alu writes that, This is not the first time that the country is experiencing a sprain in its economic system. In the twilight of President Goodluck Jonathan’s administration, the economy of the country almost wobbled into a condition of anomie where 21 out of 36 states of the federation were not able to pay staff salaries. This was the position that gave rise to the bailout policy that the present administration adopted so as to put on tract the machinery of governance in the country.
The reason for the national revenue decline is not farfetched. Ours is an oil economy. For some time now, Nigeria has depended on petroleum as a mainstay of its economy. Unfortunately, a decline in the oil prices is taking a toll on the economy. For example, the price of crude oil has slumped from $107.89 per barrel in June to $105.61 in July last year. Between August, September and December last year, the prices have shrink from $100.75, $95.98, $86.86, and $60 per barrel, respectively. This anxiety about the falling price of crude oil as dwindling revenue threatens economic and social development and raised concerns over the overall health of the Nigerian economy and the need to diversify the economy.
Therefore, the main focus of Mahammadu Buhari’s administration, aside from the fight against corruption, should be on how to drive a mono-economy amidst dwindling oil fortunes. In doing this, government should leverage on existing institutions and agencies whose mandates are veritable instruments of economic diversification. One of such institutions is NEXIM Bank.
NEXIM Bank was established with a core mandate to promote diversification of the Nigerian economy by deepening the external sector, particularly the non-oil through the provision of credit facilities. Its areas of interest include Manufacturing, Agro-processing, Solid Minerals and Services, which the Bank has labeled it with an acronym, MASS agenda. Towards this direction, among other activities, the Bank acts as an interbank discount window designed to assist commercial banks provide short-term finance in local currency at preferential rates in support of exports; grant short, medium and long term fixed rate loans in foreign currency to participating banks on behalf of their export clients and to assist manufacturing exporters to have adequate working capital to stock local raw materials. In the whole, the targets sectors that have high employment and foreign-exchange generation potentials in the non-oil sector of the Nigerian economy.
Already, the Bank, through the Roberts Orya led management has demonstrated that it has the capacity to deliver on its mandate. For many years and still counting, the Bank has being in the vanguard of promoting export diversification and deepening the value added non-oil exports.
Sources from the Bank reveals that three years down the line, Nexim Bank, through its various operational interventions, has generated or sustained direct jobs of over 14,358 as at August 31, 2012. Between August 2009 and August 2012, its facilities have enhanced the potentials of beneficiary projects to generate estimated foreign exchange in the sum of US$189.20 million annually. Accordingly, the Bank supported Nigerian exporters, majorly the small and medium enterprises (SME’s), with some being Greenfield projects, to the tune of N23.33 billion and issued Guarantees valued at US$27.3 million between 2009 and August 2012. These interventions were in the Bank’s target sectors mentioned earlier.
In its quest to provide funding interventions to loan beneficiaries and developmental support through strategic alliances for capacity building and event sponsorship, NEXIM Bank funded the premiering of
Doctor Bello, a world class movie. The event took place in Kennedy Centre, Washington DC, in 2012. This event is one of the most proactive steps in promoting the local content of the country’s creative and entertainment industry. Apart from showcasing the artistic endowment of our local artist on a global stage, it has broaden the intellectual horizon of artists; create a healthy competition between Nollywood stuffs with other internationally recognized creative and Entertainment bodies across the globe. This is aside from meeting its targeted objective of exploiting both the local and foreign markets for optimum economic gains. No gain stating the obvious that entertainment industry, has a tremendous capacity to create employment, build wealth, which in turn will strengthen the nation’s economy.
Sources in the Bank also reveal some intervention efforts in the entertainment industry. Some of the events, as enumerated, include the Zuma Film Festival, the 10th Nigeria Video Music Awards, 9th African Film & Television Programme Expo and African International Film Festival. Others include: 1st National Policy Dialogue on the Development of Creative/Entertainment Industries in Nigeria, as well as the 1st Annual Nollywood Edition of the Hollywood Black Film Festival, inter alia.
Available statistics on the potentialities of the industry are inspiring. It is revealed that the global film and entertainment industry generated about USS90.6 Billion revenue in 2010. The revenue from the industry was projected to hit USS102.7 billion in the previous years. In this revenue, records available have it that North America is contributing the largest market share of 40%, Europe, Middle East and Africa, is accounting to 24%, Latin America, 20% and Asia pacific, 3%. In the statistics, it is reported that Nollywood is ranked third globally in revenue. Its receipts over the years showed a range of between USS300m to USS800m.
In transportation, the Bank has introduced an initiative aimed at easing access for the transportation of goods and services within the shores of West Africa. Known as Sea Link project, the project will deepen payment system and improve the access of traders and exporters to credit facilities.
In a media interaction sometimes last year, Robert Orya, the Managing Director of NEXIM Bank said the project is geared towards setting up a Maritime Shipping Company that would link seaports on the West African coast in order to facilitate trade and ensure smooth transportation of goods among ECOWAS member states. The initiative, it is believed, will aid Nigerian Traders and manufacturers to gain access to regional market, thereby boosting manufacturing foreign exchange earnings and job creation in the country (back home). Prof Wilson Attah, former chairman, Ghana National Chamber of Commerce is grateful to NEXIM for the long awaited and desired initiative. He said the initiative will help reduce West Africa from 45percent lost of it cargoes to European Shipping lines because of poor Maritime services. The project, according to NEXIM Bank’s sources, will cost 61.5 million dollars.
These efforts, which the Bank is carrying out in the non oil sector of the economy, will facilitate the needed diversification of country’s economy. But these can only come to fruition when government boosts the capacity of the Bank so that it can deliver on its mandate.
Wherever there is a success story, challenges will picket the gateway like striking workers. In the entertainment industry, for example, government can create an enabling environment for the industry to thrive by the enforcement of intellectual property rights among other things.