Crude petroleum and natural gas Nigeria - Figures released by the Central Bank of Nigeria Indicated that the estimated aggregate output in the fourth quarter of 2012 measured by Gross Domestic Product at 1990 basic prices grew by 7.1 per cent, compared with 6.9 per cent recorded in the preceding quarter.
While real non-oil GDP was estimated to have grown by 8.2 per cent and accounted for 87.4 per cent of the total GDP in the review quarter. Real oil GDP, comprising crude petroleum and natural gas was estimated to have declined by 0.17 per cent, compared with the growth of 16.7 per cent in the preceding quarter and accounted for 12.6 per cent of the total real GDP
The facts would indicate that there is a silver lining in Nigeria's quest to reduce her dependence on oil. But it is efforts such as the agreement signed by The African Development Bank (AfDB) with NEXIM and BOI to provide two sovereign-guaranteed multi-tranche lines of credit (LoCs) of 700 million dollars to support export-oriented small and medium enterprise expansion in Nigeria that's leading this initiative.
According to a statement released by Chinedu Muoghalu, the head of corporate Communications department of NEXIM, the credit would be provided through the Bank of Industry (BOI) and NEXIM bank, which would receive 500 million dollars and 200 million dollars respectively.
During the agreement signing ceremony, Dr. Ousmane Dore, AfDB's Resident Representative in Nigeria, said the bank's combined programme would contribute to mobilising significant financial resources for Nigerian export-oriented SMEs.
He said it would ultimately contribute to economic development, employment opportunities, foreign exchange and regional trade integration.
Managing Director, NEXIM, Mr. Robert Orya, described the facility as a great opportunity for NEXIM to make available concessional long-term funding in pursuit of its goal of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings
"This facility will provide a great opportunity for NEXIM to make available concessional long-term funding in pursuance of its strategic objectives of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings," he said.
Many countries of the world recognise that the private sector has the capacity to drive economic growth given the right conditions. At an empowerment summit for small and growing business, Minister of Trade and Investment, Mr. Olusegun Aganga mandated the Bank of Industry and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to create five million jobs within the next two years (2013 and 2014).
Recent data provided by the National Micro, Small and Medium Enterprises (MSME) collaborative survey undertaken by SMEDAN and the National Bureau of Statistics put the number of MSMEs in Nigeria at 17.3 million, with total employment put at 32.41 million. If each of these SMEs is empowered to create one job each, this makes about 17 million jobs; if 50 per cent of these figures create one job each.
But these SMEs would need to be stimulated with the right incentive to drive this kind of growth. That is why it is interesting to note that the LoCs has as its core objectives to boast the ability of local SMEs' to be more competitive, scale up their operations and ultimately create more jobs in Nigeria. Already SMEs are pining under the weight of poor access to funds, uneven access to markets and poor infrastructural facilities.
Another exciting feature of this agreement is that the LoCs will include a technical assistance package to strengthen institutional capacity at both BOI and NEXIM as well as at their SME clients.
However, for technical assistance arrangements to be effective it must be backed by a Technical assistance agreement that gives clear permission to discuss and share regulated technical knowledge and data. It should indicate the appropriate recipient, the purpose of the assistance and what kind of knowledge that would be shared. Most TAAs are written in such a way that it precludes production rights or manufacturing know-how but to benefit maximally SMEs should have capacity development as their goal.
NEXIM's drive to shift the focus of the economy on non oil exports is the reason the bank seeks 1.6 billion dollars in foreign exchange and an overall contribution of almost 7 per cent to non-oil exports, including a 10 per cent share in Economic Community of West African States (ECOWAS) exports.
The AfDB facility will provide a great opportunity for NEXIM to make available concessional long-term funding in pursuance of its strategic objectives of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings believes Orya.
If the giant strides already taken by the bank are anything to go by, then there are good reasons to share in the bank's optimism.
By Nseobong Okon-Ekong