African Export-Import Bank (Afreximbank) and Nigeria Export-Import Bank (NEXIM) have signed a memorandum of understanding to establish a $50 million joint project preparation funds for investments in Nigeria.
The organisations collaboration through the Joint Project Preparation Fund aims to “unlock investments into sectors such as export manufacturing, agro-processing, solid minerals development and beneficiation services, as well as healthcare, Information and Communications Technology, and creative industries.”
According to a statement by Afreximbank, the $50 million “will assist the early development process of projects from concept stage to bankability by covering the preparation of feasibility studies, project development and advisory services and related costs.”
The Joint Project Preparation Fund is a direct response to enhance Nigeria’s initiatives to address the twin challenges of the COVID-19 pandemic and existing economic difficulties associated with the country’s dependence on crude oil revenues.
Commenting on the development, Prof. Benedict Oramah, President of Afreximbank, said: “The execution of this Memorandum of Understanding marks yet another significant milestone in our collaboration with NEXIM.”
“I am particularly pleased that Afreximbank and NEXIM are boldly venturing upstream to help investors develop well-structured projects that meet market standards.
“This intervention is timely as the Fund will play a catalytic role in accelerating the diversification of the Nigerian economy by ensuring a steady flow of bankable projects in priority tradable sectors in a timely manner,” he added.
“In addition to enhancing bankability, the Fund will, on a case-by-case basis, undertake feasibility studies to assess the viability of accessing markets in the sub-region, thereby promoting intra-African trade under the AfCFTA.
“We are pleased to be replicating a similar initiative we pioneered in Malawi in partnership with Malawi Export Development Fund (EDF) and look forward to more opportunities across the continent,” Oramah said.
In the same vein, the Managing Director of NEXIM, Mr. Abubakar Abba Bello, said: “We are quite pleased by this opportunity to, once again, partner with Afreximbank in proffering a solution to one of the major challenges that have limited the flow of credit to the Nigerian export sector.”
He added that: “The Fund is designed to mitigate the project selection challenges, particularly amongst the SMEs, towards boosting their contribution to formal exports.
“This technical expertise will therefore enhance NEXIM’s implementation of its export development programme, especially with regards to the State Export Development and industrialization initiatives.”