$60mn West, Central Africa Sealink Project by NEXIM Generates 24,0000 Jobs in 4 Years

Private placement offer for the $60 million (N9.5 billion) West and Central Africa Sealink Project promoted by the Nigeria Export/Import Bank (NEXIM) will finally take off by the end of this year.
The Sealink Project dream came as a solution to most of the non-tariff barriers to trade within the West African sub-region but was later expanded to accommodate Central African countries in order to further integrate the 26 countries with a consumer base of about 440 million people and a combined GDP of over $700 billion.
Following the launch of ECOWAS Trade Support Facility in 2010, which gave Nigerian traders access to N2 billion with generous terms to serve as encouragement, it was discovered that transportation was still a major barrier because “the major way we move our goods is by road which has obvious challenges like multiple check points, harassment by security agencies, bad roads.
NEXIM Managing Director, Roberts Orya in an interview with Economic Confidential said: “That means that if I give you like $5 million or N1 billion and you produce goods which are in 20 containers, you have to put 20 trucks on the road with all these challenges that we have mentioned. It was at that point that I realised why our traditional trade was very low because we need to move goods in international trade by sea.
“My conclusion was that transportation is a non-tariff barrier. NEXIM is the trade policy bank of Nigeria. Within the ECOWAS sub-region, we have about 318 million people and Nigeria controls over 50 percent of that”, says
“Unfortunately, for you to move your goods from here to Ghana, it will take you about six days by road with all the impediments that we have mentioned but for you to move your goods from the same Lagos to Ghana by sea will take you between 45 to 60 days. Under that kind of scenario, how do you trade among yourselves? They will first take our goods to Europe and then do a transhipment of goods to Ghana.”
The NEXIM Bank boss said even before forms for the private placement offers were distributed, investors had deposited over N60 million and that everywhere across the regions that road show for the placement had taken place, government officials and private businessmen showed great enthusiasm.
At the close of offer on June 30 and collation and allotment by September, “we will have some ships coming in because we don’t buy ships on the shelf. We are having a two-prone approach. The first one will be some kind of leasing for us to commence and then new ones can come in later.”
“The kind of ship that we will have within the ECOWAS sub-region is the type that will carry both passengers and cargo because our people are used to travelling with their own goods. There is another one that will start from Congo Brazzaville docking at the major ports down to Dakar”.
Orya emphasised that NEXIM is only the facilitator for the project because it is a purely private sector arrangement and that already, a technical partner has been sourced from Greece.
He expressed satisfaction at the performance of the development finance institution since he took over four years ago because it has moved far away from a loss making institution to a profit making one.
“We met a bank whose financial and operational performance had deteriorated to alarming proportion in addition to several other issues. One of these was the status of the loans that we met. We met a total loan portfolio of N14.6 billion out of which 72 percent was non-performing and within that category, N10.03 billion or 69.05 percent was classified lost in line with the prudential guidelines of the Central Bank of Nigeria (CBN).
“The bank had no funds because our authorised share capital was N50 billion but as at the time I came in, only N17.26 was contributed for almost 20 years cumulatively. We had an outstanding of N32.37billion, so it was very difficult for the bank to even create new loans, create new risk assets. It was difficult for them to operate profitably.
“Out of this amount, central bank has just given about N6.7 billion for 20 years and I think there was some kind of reluctance from central bank to give more money because the one that they had given, there was no return. The money they give us is equity”, he explained.
“On financial performance, in the history of this bank, this is the very first time that the bank is making profit year one, year two, year three, year four and paying dividend to Central Bank and MOFI for three years. The fourth year is still under auditing which is the year ended December 2013.
“In terms of the financial intervention; the support that we are giving to non-oil sector, we have been able to give about N35.46 billion from that August up to date and then we have given guarantees of $27.3 million. If you convert everything, it has come to N39.5 billion. This has created over 24,000 direct jobs for Nigerians and that is capable of generating estimated foreign exchange earnings of $320.12 million annually to the economy of Nigeria”, Orya enthused.
He expressed surprise at the an allegation from Secretary of the Conference of Nigeria Political Parties (CNPP) that NEXIM misapplied N200 billion Stabilisation and loan Guarantee Fund advanced to it by the CBN.
“That is a shocker for me too and a shocker for everybody because in the 23 years of the existence of this bank, we have not received money from CBN up to N200 billion for stabilisation and for guaranteed fund as they are alleging or from any other government agency. In fact, let me say that all the funds that have come into NEXIM Bank in and out if we aggregate it for these over 23 years is not up to N200 billion whether as loans or anything.
“We have been appearing before National Assembly committees and are very much aware of our financial standing. There has been nothing like that. It is just some kind of concoction from somebody that wants to create mischief for reasons we don’t know”, he insisted.

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