Cairo, 10 February 2016 – The African Export-Import Bank (Afreximbank) and the Nigerian Export-Import Bank (NEXIM) are to implement an intervention programme in the Nigerian cocoa sector to revive and help it reemerge as the country’s top non-oil export foreign exchange earner, the two institutions have announced in Cairo.
Afreximbank and NEXIM said in a communique after a two-day strategy meeting held in Cairo on 5 and 6 February that the programme would make funding available to support working capital requirements in order to enhance production capacity and the utilisation of idle capacities of shut down productive assets. It would also provide medium to long term finance for upgrade of existing production facilities and establishment of new processing and manufacturing facilities while enhancing market access to processors for higher value added products.
Afreximbank will also work with other Nigeria development finance institutions and commercial banks to support the country’s cocoa sector.
To ensure sustainable production in the entire cocoa value chain, Afreximbank and NEXIM would collaborate with relevant institutions and key stakeholders to facilitate issuance of cocoa bonds to help improve yields by supporting import of agro inputs and replanting with high yielding varieties in order to make the sector more competitive, they said.
Afreximbank would, in addition, structure its Africa Cocoa Initiative (AFRICOIN) to redress the current challenges impacting the Nigerian the cocoa sector, they added.
Nigeria, which used to be among the world’s top cocoa producers, has seen its percentage production share go down, with a corresponding slump in earning from exports of the commodity, due to a number of factors affecting the ability of the country’s cocoa firms to maintain production levels and value-added exports.
“This intervention will help the Nigerian cocoa sector to regain its place as a leading foreign exchange earner for the country, revamp value-adding activities in the sector and contribute to Nigeria’s economic stability, particularly in the current difficult economic environment occasioned by foreign exchange liquidity challenges,” said Dr. Benedict Oramah, President of Afreximbank.
Roberts Orya, Managing Director of NEXIM, said that his bank was concerned about the declining value of Nigeria’s non-oil exports, particularly the low cocoa processing capacity, at about 25 per cent despite a combined annual installed capacity of over 250,000 tonnes, and the inability of processors to avail working capital needs. He expressed optimism that the intervention programme would enhance value-added exports and improve foreign exchange receipts from the sector in the short term, with potential for high end value-chain production in the long run.
Afreximbank and NEXIM also announced plans to support the pilot scheme of the regional Sealink project aimed at fostering intra-regional trade in West Africa as well as the Nigerian solid minerals sector through collaboration in the provision of financial advisory services and funding programmes to support investments in key logistics and ports infrastructure to encourage the scaling up of mining operations.
The two institutions will also partner to conduct a diagnostic study towards designing and developing a mining sector funding intervention programme, the financing of mining infrastructure and the provision of equity advisory services, they said.
Media Contact: Obi Emekekwue (oemekekwue@afreximbank.com; Tel. +202-2456-4238)
——–
Follow us on Twitter: @Afreximbank
Like us on Facebook: Afreximbank
About Afreximbank: The African Export-Import Bank (Afreximbank) is the foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organization, and the Charter, which governs its corporate structure and operations. Since 1994, Afreximbank has approved almost $35 billion in credit facilities for African businesses, including about $4.5 billion in 2014. Afreximbank is headquartered in Cairo. For more information, visit: www.afreximbank.com