Within that category, N10.03 billion or 69.05 percent was classified as completely lost resulting in a decline in the bank’s income.
NEXIM Bank was established by Act 38 of 1991 as an export credit agency with the broad mandate to promote the diversification of the Nigerian economy and deepen 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 & export credit insurance; business development and financial advisory services etc.
The net effect was a depletion of the bank’s shareholders funds as a result of accumulated losses, significant decrease in income and tolerance of excessive and escalating overheads. In addition to these were the issues of non-adherence to corporate governance tenets, non-existent risk management framework, lack of strategic focus and digression from core mandate, lack of visibility of the bank, etc.
Under the leadership of its former Board Chairman Dr. Kingsley Moghalu, the management received approval in 2010 to reposition the bank to effectively deliver on its statutory mandate and become an effective enabler of Nigeria economic transformation.
The outcome of the exercise was the Corporate Transformation Project (Project Spring) which led to the re-definition of the bank’s mission, vision and strategic objectives targeting four sectors namely: manufacturing, agro-processing, solid minerals & services, which have high employment and foreign exchange earning potentials in the non-oil sector of the Nigerian economy. This has become the MASS Agenda of the NEXIM Bank.
Subsequently, the management set out a transformation implementation activity which include: a five-year strategic plan marshalling out the following areas: clearly defined market penetration action plans with responsibilities and timelines; robust corporate governance and risk management architecture/frameworks in line with international best practice; brand strategy and brand engagement strategy to improve visibility and project the Bank’s image among others.
Recently, the Association of African Development Finance Institutions (AADFI) has rated the NEXIM Bank as Best Performing African DFI. The decision was an outcome of the ‘2013 Annual AADFI CEOs Forum of African Development Banks and Finance Institutions on the theme “Strengthening African DFIs with Appropriate Standards and Guidelines: 3rd Peer Review & Rating of African DFIs” held at the Serena Beach Hotel & Spa, Mombasa Republic of Kenya from 13-15 November, 2013.
Managing Director of NEXIM Bank Mr. Roberts Orya sees the A rating by AADFI as a well-deserved reward for all the hard work, painstaking commitment and dedication that his executive management team and staff have put in to rebuild the institution over the past four years.
“The bank is now better repositioned to deliver on its mandate through more capital injection and other institutional support from our two shareholders – CBN and Federal Ministry of Finance in terms of supervisory, regulatory oversight and guidance functions. This has increased our capacity to support the growth of the non-oil exports and complement the export boosting activities of commercial banks. In all, we have consistently maintained a robust strategy, efficient operations through sustenance of highly skilled and motivated personnel.”
Between August 2009 and December 2013, the bank supported Nigerian exporters, mainly Small and Medium Enterprises (SMEs) in the MASS sectors to the tune of N30.99 billion and issued guarantees valued at $27.30 million.
The bank has through its funding interventions generated/sustained over 21,075 direct jobs, in addition to many indirect jobs and facilitated the generation of estimated $250.32 million annually in foreign exchange earnings.
In line with the strategic objective of building a profitable institution with a robust balance sheet, the management of NEXIM has ensured an appreciable return on the equity investment of the shareholders. Accordingly, a dividend for the 2010 financial year performance was declared and paid, which was the first time since year 2003 when dividend was last paid.
Dividend for 2011 has also been declared and paid, while dividend for 2012 will be paid after the approval of the accounts by the Central Bank of Nigeria (CBN). This is the third unbroken year of profitable performance, whilst fulfilling the bank’s role as a development finance institution.
The bank has achieved a cumulative loan recovery of N1.82 billion, designed and rolled out a robust enterprise-wide risk management framework.
The bank is forging ahead with several innovative initiatives and strategic alliances including deepening of intra-regional trade with the launching of ECOWAS Trade Support Facility (ETSF); collaboration with the Borderless Alliance (an initiative of the USAID/ West African Trade Hub) to progress the regional initiative aimed at removing non-tariff barriers; facilitating the establishment of a Shipping Company (The Sealink Project) to own and operate ocean going vessels within the West and Central African sub-regions; and development of the facility guidelines for the Nigerian Creative Arts and Entertainment Industry.
The bank has been able to leverage on its balance sheet to secure lines of credit from institutions like the African Export-Import Bank (Afrexim), the Export-Import Bank of India, the African Development Bank (AfDB) while it has collaboration arrangements with United States Export-Import Bank and other EXIM banks.
Moghalu is an Abuja-based financial analyst.
