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Reps Commend NEXIM Bank’s Support for Local Firms

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Reps Commend NEXIM Bank’s Support for Local Firms

By Dipo Olowookere

The relentless contributions being made by NEXIM Bank to the Nigerian non-oil export sector, especially in funding factories have received the recommendation of the House of Representatives.

Chairman, House Committee on Banking and Currency, Mr Jones Chukwudi Onyereri, during a recent visit to Ladgroup Ltd, a foremost indigenous Nigerian conglomerate with a state of the art oil mill extraction factory located in Ikenne, Ogun State, said the bank has contributed to the growth of the country’s economy.

He appealed to the Federal Government to increase funding support to institutions like NEXIM Bank, promising that his committee will continue to do all within its jurisdiction and mandate to ensure that such funds are applied very judiciously.

The lawmaker, who led other members of the committee to the factory on oversight function, noted that, “The current economic recession facing the country has opened our eyes to the immense opportunities and abundant blessings God has heaped on Nigeria, not just in oil and gas, but more especially in agriculture and solid minerals.”

Also speaking during the visit, the Acting MD/CEO of NEXIM Bank, Mr Bashir Wali, revealed that the bank had in March 2015 approved the sum of $5.8 million to Ladgroup Limited to set up a Shea Nut processing factory.

He said the facility was made up of Equipment Finance of $2.8 million and Working Capital Facility of $3 million and has enabled the company to purchase and install a Shea Butter Refining Unit, a step down transformer and augment its working capital base.

According to Mr Wali, “The interest of NEXIM Bank in Shea Nut processing for export was borne out of the very high demand for Shea Butter with the impressive potentials for foreign exchange revenue stream as well as massive job creation at various levels of its value chain.”

Citing available statistics, he said nearly 2 billion Shea trees grow naturally on parklands in 21 African countries stretching from Senegal to South Sudan with more than 16 million women living in rural communities individually collecting the fresh fruits and the kernel which they process to extract a healthy vegetable oil known as “Shea Butter.”

With approximately 600,000 tons collected each year, the industry provides a critical source of jobs and incomes to millions of often poor and underserved communities.

Mr Wali stated that the global demand for Shea Butter is worth about $10 billion and is projected to be more than $30 billion by 2020, hence the interest of NEXIM in providing funding for increased proactive measures to reposition agricultural products such as Shea as part of its non-oil export sector interventions in the agro-processing sub-sector.

According to him, it has been estimated that over 680,000 metric tons of Shea Nuts are produced annually in West Africa, with about 56 percent of the nuts exported, while the remaining is consumed locally.

Available data shows that Nigeria is the world largest producer of Shea with the wildly grown Shea trees predominant in 21 states across the country.

This accounts for over 53 percent (or 370,000 MT) of the production in West Africa as confirmed by the reports of the Central Bank of Nigeria (CBN) and Oil Seeds Association of Nigeria (OSAN).

Sadly, nearly N345 million is lost in the smuggling of Shea products out of the country every year.

Chairman of Ladgroup Ltd, Mr B. A. Onafowokan, expressed immense appreciation to NEXIM Bank for the quality of loan given to his company, and also thanked the lawmakers for their ‘oversight function’ stating that more of such activities is required to curtail misapplication of such funds provided by the government to assist local entrepreneurs keen on manufacturing for export.

Ladgroup Ltd is acclaimed to be the largest Shea Nut processing factory in Africa with an intake capacity of 40,000 Metric tons per annum.

The factory is dedicated to sourcing of Shea Nuts and processing them into Shea Butter of the highest quality, for sale to both domestic and export markets, but with a special bias for the export market.

The firm has set its target on major European importing companies in the Confectionary/ Chocolate industry and Cosmetics/ Pharmaceutical industry based in Netherlands, Denmark, Sweden and the UK that import well over 95,000 MT annually.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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