Nigeria’s trade with Canada hits $3bn

Nigeria’s trade with Canada hits $3bn

Posted by Metral

Nigeria’s bilateral trade relationship with Canada in 2011 hit $3 billion thus making the country largest economic partner in sub-saharan Africa. Speaking in Toronto at the Canada-Nigeria Investment Conference (CNIC) 2013 with the theme: ‘Canada-Nigeria Synergy Vision 20:2020’, Managing Director of Nigerian Export Import Bank (NEXIM), Mr Robert Orya said that Nigeria presents new opportunities for Canadian businesses to invest in a wide range of key sectors such as telecommunication, transportation, infrastructure, manufacturing, aeronautics, engineering, oil and Gas, Education, ICT, Health, Agriculture, Solid Minerals, Security and Tourism.

The NEXIM chief also took the opportunity to further explore joint collaboration opportunities which his bank     initiated last January with a sister Export Credit Agency, the Export Development Canada (EDC), when the Canadian Minister of International Trade and Minister for Asia-Pacific Gateway, Honourable Ed Fast led an equally powerful team to Nigeria on an investment exploration mission.

Orya explained the mandate and operations of the Nigerian Export-Import Bank to the EDC team, saying that the Bank was established by Act 38 of 1991 as Nigeria’s sole Export Credit Agency with the broad mandate to promote the diversification of the Nigerian economy and deepening the external sector, particularly the non-oil, through the provision of credit facilities in both local and foreign currencies; risk-bearing facilities through export credit guarantee and export credit insurance; business development and financial advisory services, among other initiatives.

According to him, the bank’s current strategic initiatives are targeted towards boosting employment creation and foreign exchange earnings in the MASS sectors of the Nigerian economy which are Manufacturing, Agro-processing, Solid Minerals and Services (Tourism, Transportation and Entertainment) industries adding that the bank is owned in equal proportions by two shareholders namely, the Central Bank of Nigeria (CBN) and the Ministry of Finance Incorporated, and does not derive its subventions directly from the Federation Account, but must operate profitably to pay back dividends to its two shareholders.

NEXIM, Orya said,  is a development finance institution with a commercial orientation and has been buoyantly self-sustaining. “Typically, the bank in fulfillment of its role strategically forays into the key sectors under its mandate that are seemingly unattractive to the commercial banks, ‘derisks’ them, and as soon as they become less risky, moves on to other areas” he said.

He confirmed that  the bank has put in place very dynamic enterprise-wide risk management, and corporate governance frameworks that make it easy to ensure that financing is only provided to companies that promise good return on investments since the funds must necessarily be revolved, as it were.

“ Moreover, in line with the Basle II agreements, NEXIM is taking the lead towards complying with the International Financial Reporting Standards (IFRS) as required by the apex Bank and financial regulator in Nigeria” he added.

Responding,  Regional Manager of EDC responsible for Africa, Europe and Middle East (AEME),, Mrs. Diane Belliveau, noted that the modus operandi of NEXIM Bank is quite similar to that of the EDC.

According to her, the EDC was established as a Crown corporation – an ECA, wholly owned by the Government of Canada with mandate to support and develop Canada’s export trade by helping Canadian companies respond to international business opportunities.

But she noted that  like NEXIM, EDC does not rely on governmental annual appropriations, but is financially self-sufficient and operates much like a commercial institution. “It collects interest on its credit facilities as well as premiums on its insurance products, and also has a treasury department that sells bonds and raises money in global capital markets. It offers insurance and financial services, bonding products and small business solutions to Canadian exporters and investors and their international buyers. It also supports Canadian direct investment abroad and investment into Canada with much of its transactions done in partnership with other financial institutions and through collaboration with the government of Canada” she explained.

In a statement, the  Regional Manager,  stated that since the EDC opened shop in 1944, it has facilitated more than $1,041 billion in exports and foreign investment by Canadian companies.

In 2012 alone, she noted,  the agency helped more than 7,400 Canadian companies to do business in 87 countries, with a majority of the companies being small business, and more than 30 per cent of their operations being in fast-growing emerging markets.

Applying its financial products and services strategically, she further explained, the EDC customers’ export sales and investments totalled an impressive $87.4 billion which helped generate an estimated $52.7 billion of Canada’s GDP, and helped sustain 573,773 jobs.

Source:http://sunnewsonline.com/new/business/nigerias-trade-with-canada-hits-3bn/