CEM REPORT, TRADE | A recent survey has revealed that only 22 percent of export financing requests were approved within one month of application in Nigeria.
The survey also adds that about 42 percent of rejected export finance requests were done without any reason given to the exporters.
The report presented at the 2022 edition of the 3T Impex Consulting Annual Trade Finance Survey, tagged, “Stimulating Export Finance Growth,” at the NECA House, Ikeja, Lagos, explained 94 percent of exporters experienced rejection of their financing requests by Nigerian banks.
According to financial expert and Director, 3T Impex Trade Academy, Bamidele Ayemibo, at the unveiling of the report, noted that 21 percent of the rejected export financing requests were based on lack or inadequate collateral security and that only 11 percent of exporters received approval for their export financing request.
He added 59 percent of exporters were attracted to a bank that has support services for exporters.
Furthermore, the report disclosed that 57 percent of exporters identified access to export finance, port logistics, and delays by government agencies at the port as major challenges hindering export growth.
Underscoring the essence of the report Ayemibo, said varying opinions from different quarters on the reason for the low export volume from Nigeria, and this has made most efforts of the government not to yield the desired results.
“This report has used a scientific methodology to determine the major factors hindering the growth of export volume in Nigeria (particularly non-oil export) and proffers a comprehensive solution to the problems through well-founded recommendations.
“The objectives of the survey include: identifying the challenges of export business in Nigeria, knowing the level of export trade finance rejection, understanding the reasons for export trade finance rejection, understanding the features that characterised approved export trade finance requests, identifying the challenges faced by exporters in getting their export trade finance requests approved, and recommending solutions that will address the identified challenges associated with export trade finance rejection with the positive effect of reducing the trade finance gap.”
Ayemibo also disclosed that SMEs occupied the larger per cent of participants while those in the agric sector accounted for 50 per cent.
He lamented that the country was currently experiencing a very high level of inflation which had resulted in a high cost of living given that Nigeria is largely import-dependent, saying that the consequence of the high rate of exchange of the Naira to major foreign currencies used to pay for imported goods has made the cost of importation to be at an all-time high.
“It is no more news that export is the low-hanging fruit that can help Nigeria increase its foreign exchange generation. It is also important to state that exportation is the only means of generating foreign exchange that the country has control over and this is because other means of foreign exchange inflow like Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), is controlled by investors who want to do business in Nigeria while the foreign remittances are controlled by Nigerians in the diaspora who want to financially support their friends and relatives at home in Nigeria.”
He called on commercial banks to expedite action in making Forex available to exporters in boosting the sector.