Government gets $1b debt offer from Afreximbank

Denies targeting manufacturers in new fiscal regime
The African Export-Import Bank (Afreximbank) has reiterated its cooperation with Nigeria in its quest for development, as well as willingness to arrange financing of up to $1 billion to support the government’s investments in trade enabling infrastructure.

The bank also invited President Muhammadu Buhari and the government to the Afreximbank’s yearly meetings scheduled to take place in Abuja from July 11 to 14, as well as the Intra-African Trade Fair in Cairo slated for December 11 to 17, in efforts to promote trade among African countries.

In the yet to be signed 2018 national budget, there is a planned N1.95 trillion deficit, which would be funded by the usual mix of local and international debt.

However, with rising oil prices in the international market, increased oil benchmark and the current huge debt overhang at more than N20 trillion, this year’s debt consideration is sure to raise more argument despite its merit.

Already, the bank has approved financing up to $17 billion for Nigerian entities between its commencement of operations in 1994 and December 2017, Afreximbank President, Dr. Benedict Oramah, disclosed.

Oramah, who had last week, led a delegation of the pan-African multilateral lender to Abuja said that the bank’s facilities had made major impact on critical sectors of the Nigerian economy, while the institution now has loans outstanding of about $3.5 billion in the country as at 31 December 2017.

He identified the sectors benefiting from the bank’s facilities to include financial institutions, transport, hospitality, manufacturing, agro-allied, oil and gas, power, and telecommunications.

According to him, the support to Nigeria had included provision of liquidity and trade finance lines of more than $800 million during the banking consolidation when many international banks cut credit lines to the country and the provision of $1.8 billion to support the economy during the recent oil price shock between 2015 and 2016.

He enumerated that the bank’s current initiatives in Nigeria to include the development of testing and inspection centres across the country in collaboration with the Standards Organization of Nigeria; establishment of a Centre of Excellence for Tertiary Healthcare/Medical Park; potential participation in the Nigeria SEZ Investment Company Limited being promoted by the government.

Others include the support for industrial projects through loans to strategic banks; arrangement and disbursal of $750 million to the Bank of Industry in June; provision of trade and letter of credit lines to all Nigerian banks, in close coordination with Central Bank of Nigeria, in order to ensure access to trade finance; and development of an Afreximbank Africa Trade Centre in Abuja.

He said the trade fair, being promoted in collaboration with the African Union and the Egyptian government, would be the continent’s single largest trade fair and the first of its kind.

It will feature a seven-day trade show where Nigerian businesses could join others to showcase their capital goods and service offerings to a large market, including private sector corporates and government institutions from up to 55 African countries.

Meanwhile, the Federal Ministry of Finance has debunked the reports making the rounds that the new excise duty rates on alcoholic beverages and tobacco, approved by government, were targeted at local manufacturers.

In a statement signed by the ministry’s Director of Information, Hassan Dodo, noted that the new fiscal regime which came into effect since June 4, 2018, only seeks to achieve a dual benefit of raising the government’s revenues to support the nation’s growth and reducing the health hazards associated with tobacco-related diseases and alcohol abuse.

According to him, the excise is currently a 60 per cent duty rate imposed on imported alcoholic beverages and tobacco as part of measures by the government to encourage local production and protect local manufacturing industry.

“It should also be noted that beer and stout are currently under import prohibition to protect the industry from unfair competition from foreign brands.

“In addition, other locally excisable products such as non-alcoholic beverages, cosmetics, perfumes, corrugated papers or paper boards and cartons have no excise duties,” he said.