By virtue of its human and natural resources endowment, Nigeria has the potential to become a major player in the global economy. However, this potential has remained relatively untapped over the years.
After a shift from agriculture to crude oil and gas in the late 1960s, Nigeria’s growth had continued to be driven by consumption expenditure and high oil prices.
Previous economic policies had left the country unprepared for the recent collapse in crude oil prices and production. The structure of the economy remains highly import dependent, consumption driven and undiversified.
Oil accounts for more than 95 per cent of exports and foreign exchange earnings while the manufacturing sector accounts for less than one per cent of total exports.
The current administration recognised that the economy was likely to remain on a path of steady and steep decline if nothing is done to change the trajectory.
It is in this context that the management of the Nigerian Export-Import Bank led by its Managing Director, Mr. Abubakar Bello, recently unveiled strategies to boost the contribution of the non-oil sector to Gross Domestic Product.
Established by Act of Parliament 38 of 1991 as an export credit agency, the bank is saddled with the responsibility of providing export credit guarantee, local currency, management of funds and export credit insurance facilities to exporters.
The bank had since May last year commenced a strategic action plan to retool existing export financing support programmes and developing new ones to boost confidence of international partners.
To achieve this, NEXIM has entered into a partnership with the National Inland Waterways Authority and Sealink Promotional Company Limited to bridge waterways infrastructure gap and enhance the country’s trade in the ECOWAS sub-region.
The tripartite memorandum of understanding, which was sealed in Abuja would enhance Nigeria’s annual non-oil exports revenue to between $500m and $1.2bn annually.
The NEXIM managing director signed the MoU on behalf of his bank, while the Managing Director, NIWA, Senator Olorunnimbe Mamora, and the Chairperson of Sealink Implementation Committee, Mrs Dabney Shallholma, signed on behalf of their agencies.
Speaking on the framework, Bello said the agreement was a public-private partnership, which is primarily designed to attract private sector investments under government agencies’ facilitative support at no cost to government.
The MoU, he added, was intended to bridge infrastructure gap that will promote and enhance trade connectivity as well as spur Nigeria’s regional and global trade competitiveness.
Bello described the agreement as a significant milestone in the bank’s on-going collaborations with all key national and regional maritime stakeholders, noting that it would be catalytic to the realisation of one of the priority projects under the ECOWAS Community Development Programmes.
The NEXIM bank boss said the effective implementation of the Sealink project and the safe utilization of the inland waterways, would no doubt bridge logistics gaps that will attract and facilitate investment inflows.
This, he noted, would contribute to the realisation of one of the broad strategic objectives of the Economic Recovery and Growth Plan, which is building a globally competitive economy.
He said that the bank was working towards enhancing Nigeria’s export to ECOWAS that had muted over the years at about 15 per cent.
In the quest to facilitate the realisation of its strategic objectives, he said that the bank introduced the ECOWAS Trade Support Facility that was specifically designed to increase Nigeria’s trade flow within the ECOWAS sub-region, especially trade in manufactured goods to broaden national export basket.
He said, “As a trade policy bank, NEXIM strategic interest and partnership in the regional Sealink Project is to promote and diversify exports as well as enhance trade connectivity in line with government’s objective to diversify the economy.
“Also, the bridging of maritime infrastructure gap is expected to significantly enhance exports of bulk solid minerals, thereby enhancing the Gross Domestic Product contribution of both shipping and solid minerals sectors from current levels of about 0.2 per cent.
“In value terms, it is projected that the signing of this Memorandum of Understanding would promote waterway operations for hinterland, transit and coastal trade, especially for bulk cargo.
“It is noteworthy to highlight that it is projected that this development would enhance non-oil exports annual revenue receipts to between $500m and $1.2bn annually on bulk solid minerals exports.”
The NIWA boss said during an interview that the pact was necessary to ensure full integration of the potential of Nigeria’s resources.
Mamora said, “For too long, our economy has been dependent on oil and its derivatives.
“Efforts to diversify are on-going and our agricultural produce has been mostly landlocked, while the vast mineral resources have remained untapped until lately when attention is being paid to solid minerals.
“Our inland waterways system is underfunded hence we are denied the benefits of the potential offered unlike a number of developed nations that have utilised their inland waterways as the mainstay for their industrialisation and economic prowess.
“This event marks another major step in the journey to reverse the dependence of our economy on oil and to open up the vast untapped opportunities that the inland waterways can offer.”
He said the realisation of inland waterways transportation would ensure safer roads for Nigeria.
The NIWA boss said the move would also ensure that the huge sums of money spent on road maintenance could be saved and used to develop other areas of needs including health, education and job creation.
He said NIWA’s endorsement of the MoU with NEXIM bank and Sealink Consortium was a testimony to the viability of the inland waterway transportation network in Nigeria.
Shallholma said NEXIM’s developmental, facilitative and supportive roles in the Sealink Project have been exemplary and typical of the roles of export credit agencies all over the world, who not only provide export finance but also work to mitigate challenges that impact sustainable trade.
She explained that the Sealink project was a public-private-partnership initiative that was initiated by NEXIM on the prompting of the Organised Private Sector through a Special Purpose Vehicle, the Sealink Promotional Company Limited with nominal promotional shareholding and sponsorship framework.
Shallholma said Sealink was fundamentally conceptualised and designed to bridge maritime transport infrastructure gap within ECOWAS and other regions as well as promote inland waterways operations towards facilitating regional integration and bulk cargo trade.
The project is also intended to facilitate reduction in logistics cost and mitigating unnecessary transit arrangements on regional trade.
She said, “As an SPV that would soon transmute to a public commercial shipping company with regional and international shareholding structure, the operation of the SPV is being midwifed by the Sealink Implementation Committee with strategic operational partnership support of the Sealink Consortium members who are collectively part of the MOU framework.
“It is significant that as we are all collaborating and strengthening cooperation, especially at this time when African Union is finalising arrangement for a continental free trade area to foster integration, investment and trade, the time has come for Nigeria to be bullish in its non-oil export trade to diversify the economy.”
On the part of Sealink, she assured that the consortium would be a key driver in both the national and regional trade and logistics value chain.