The Central Bank of Nigeria (CBN), has unveiled the Export Facilitation Initiatives (EFI) targeted at boosting commodity exports in the non-oil sector of the Nigerian economy.
This is contained in the circular just published by the apex bank on Friday, 14th June, in line with the approval by the bankers’ committee at its 343rd meeting, for the commencement of the EFI to complement the government’s efforts to foster growth in the non-oil sector of the economy.
Under the initiative, as highlighted by the Central Bank of Nigeria, the focal commodities for value chain development would be cocoa, cashew, palm oil, Shea and sesame seed.
#CBN issues Circular to all Banks on the Commencement of the Export Facilitation Initiative (EFI) https://t.co/rdYLBAgrHu
— Central Bank of Nigeria (@cenbank) June 14, 2019
Funding: The apex bank stressed that the commodities are to be funded under the approved guidelines of the Agri-Business small and Medium Enterprises Investment Scheme (AGSMEIS), The Non-oil Export Stimulation Facility (NESF), and the Real sector Support Facility-Differentiated Cash reserves requirement (RSSF-DCRR) in line with the approved limits in the EIF Funding Framework.
Why this matters: As was earlier reported by Nairametrics, top of the agenda for the apex bank is to halt the smuggling and dumping of banned products into Nigeria. Meanwhile, President Muhammadu Buhari had, in the earlier hours of Friday, directed the Central Bank to blacklist any firm, its owners, and top management caught smuggling or dumping any of the banned 43 items into the country.
What this new development means for the Nigerian economy is that local manufacturers will be encouraged to produce more of these commodities so as to enhance foreign exchange earnings. Also, it is a move to protect the domestic health and safety of the nation’s economy, rescuing it from becoming a dumping ground for imports.
Analysis of the funding framework: The funding for the initiative shall have a 9% interest rate cut across all categories in cocoa, oil-palm, cashew, Shea and sesame seeds productions and exports. The tenors vary for all categories of facility A and B while the funding shall come from AGSMEIS, NESF, and DCCR.
The baseline is that the initiative will seek to bolster the productions and export of these items in the country. It is an attempt to protect local producers while discouraging the importations of items that can be locally produced in Nigeria.