CBN Asks Banks to Support Companies to Drive FX Inflow
The Central Bank of Nigeria (CBN) has urged Nigerian banks to support indigenous companies in order to increase foreign exchange inflows and boost economic growth.
A CBN team on inspection of projects funded through Deposit Money Banks in Lagos, gave the advice late on Friday.
It noted that the apex bank was counting on these companies to expand export earnings and achieve the goal of 200 billion dollars in foreign exchange repatriation in three to four years.
At the weekend, the CBN team visited the Pinnacle Oil and Gas FZE, Candel Company Ltd., Lagos Free Zone and Sana Building Systems, all in Ibeju-Lekki, Lagos State.
The Head, Legal Services Department of CBN, Mr Kofo Salam-Alada, during a visit to Candel Company Ltd., called on banks to support Nigerian companies to grow production in the country.
“With what the company is doing I believe that bankers should actually start coming for them; it’s not just the Central Bank’s Intervention Funds, Nigerian banks should actually seek them to see how they can partner with them to drive it forward.
“The key thing that Nigerians must also know is that we need to support our own, not just in terms of employment generation; for the CBN that is interested in increasing foreign exchange in this country, it is something that needs to be supported,” he said.
Director, Banking Supervision Department, Haruna Mustapha, said what the company was doing was quite complementary to the apex bank’s RT200, designed to boost the non-oil sector.
“Candel stands at two critical junctures; it is a manufacturing outfit. CBN recently introduced the RT200 designed to boost the non-oil sector and what Candel is doing here is quite complementary to that policy.
“Again, it is providing the needed support to the agricultural sector, which will feed into the policy of the government to diversify the productive base of the Nigerian economy.
“Ultimately we expect to see a solid impact, especially when you consider the various value chain this business touches.
“So, we need more support for companies like Candel and if we can have them in sufficient critical mass, the future looks great for Nigeria,”Mustapha said.
Director of Development Finance, CBN, Yila Yusuf, noted that the bank, under its Commercial Agro Credit Scheme, disbursed N2 billion to Candel, adding that they were impressed with what the funds were used for.
“Candel is a company that we are aware of, we have given them N2 billion under our Commercial Agro Credit Scheme, fully paid through First Bank.
“We came here to see, essentially the manufacturing line; they have new products and we are impressed with what we have seen.
“The Central Bank will continue to support and work with them, quiet a number of jobs, both direct and indirect that we have seen on the floor line,” he said.
Charles Anudu, Chairman, Candel Company Ltd., who noted that manufacturing companies suffered a lot of difficulties doing business in Nigeria, urged banks to be development-oriented as CBN.
“We suffer a lot of disadvantages manufacturing in Nigeria; our cost profile is very prohibitive. You know in Nigeria you have to generate your own power and do everything, everything is expensive.
“Yet, we are still competing against countries, exporting to Nigeria, whereas my competitors elsewhere are getting export rebates.
“When somebody exports from China, for instance, he already makes a profit because he gets the 15 per cent paid to him or her by his government, I get no such support.
“Meanwhile, here all sorts of regulators are on our neck; the exchange rate is a bottleneck because we still have to import a lot of the materials we use, and the interest rate is prohibitive,” he said.
The CBN team was also impressed with developments at Sana Steel Company.
Members of the team said they were happy that some of the finished materials were bound for export to neighbouring countries, which according to them would increase foreign exchange inflow.
They were also delighted that most of the workers at the factory were all Nigerians operating advanced welding machines, different types of computers and machines.
The CBN team, therefore, said with what it had seen on the ground, it was possible to meet the objectives of the real sector support facilities.
The team stressed the need for private sector involvement to grow and develop the economy.
President of Sana Building Systems, Ken Krieger, appreciated the team and pleaded for more funds for his company to do more.
“This factory is the result of the funding that we have received. Without that support, honestly, we could not have made it happen.
“So, we are very grateful that the CBN is diligently rebuilding the economy, we appreciate and we look forward to some more loans,’’ he said. #CBN Asks Banks to Support Companies to Drive FX Inflow