The Facility involves the granting of a Line of Credit or a Guarantee to facilitate the purchase by an ECOWAS importer of Nigerian Goods. The broad objectives of the Facility among others are to:

• Increase Nigeria’s trade flow from current levels;
• Deepen the payment system;
• Assist to achieve NEPAD’s goal of African Integration;
• Create job and investment opportunities thereby meeting the Federal Government economic reform agenda of poverty alleviation through job creation; and,
• Enhance capacity building in international trade and project finance structuring
  

TARGET MARKET (DEMAND)
 
Importers in eight selected ECOWAS Countries including Nigeria namely:

• Ghana
• Senegal
• Niger
• Cote D’Ivoire
• Togo
• Benin
• Liberia
  

The target exporters will Medium and Large Scale export(ers) manufacturers

Credit Guarantee

This facility provides access for Nigerian exporters to financing by giving protection to a Nigerian Bank against repayment risk associated with non-performance on export contracts financed by the Bank. It provides that in the event of a default by the exporter in its loan repayment, NEXIM shall repay the Bank (according to the agreed terms).

The transaction will involve the use of an inward Letter of Credit (L/C) instrument payable at the end of the term (specified in the L/C) and advised and/or confirmed (if possible) through the Nigerian Bank or through the correspondent bank in Nigeria of the ECOWAS Bank.  The Bank may also accept confirmation issued by AfreximBank, the Central Bank, or Export Credit Agency in the originating country.

In either case, NEXIM will secure its position in the underlying security on the credit transaction between the exporter and the Nigerian Bank.

This product extends Lines of Credit (LOC) to ECOWAS banks to enable buyers in those countries to import goods from Nigeria on credit as per agreed terms and conditions between NEXIM and the ECOWAS bank. Payment to the Nigerian exporter would be made by NEXIM against negotiation of shipping documents without recourse to them.

Direct lending to an exporter shipping to the ECOWAS sub-region will be appraised under the Bank’s existing Direct Lending Guidelines.

Pricing for the Facility will be in line with the Bank’s existing credit Guidelines.

Local:               -       Exporter/Manufacturer (EM)
                         -       Local Bank (LB)
                         -       NEXIM

ECOWAS:        -       Importer/Buyer (I/B)
                        -       ECOWAS Banks (EB)