Bank of Nigeria (CBN) introduced the Non-Oil Export Stimulation Facility (NESF)
to engender growth in the non-oil sector of the economy and foreign reserve
The CBN hereby
informs all participating financial institutions that implementation of the
NESF has commenced.
on the NESF should be directed to the Director, Development Finance Department,
Central Bank of Nigeria, Corporate Headquarters, Central Business District,
Abuja or email; firstname.lastname@example.org
Non-Oil Export Stimulation Facility
The Non-Oil Export Stimulation Facility (NESF) was
introduced by the Central Bank of Nigeria (CBN) to diversify the revenue base
of the economy and to expedite the growth and development of the non-oil export
sector. The Facility will help redress the declining export financing and
reposition the sector to increase its contribution to economic development.
Objectives of the Facility
The objectives of the Facility are to: Improve access of exporters to
concessionary finance to expand and diversify the non-oil export baskets;
Attract new investments and encourage re-investments
in value-added nonoil exports production and non-traditional exports;
Shore up non-oil export sector productivity and create
Support non-oil export-oriented companies to upscale
and expand their export operations as well as capabilities; and
Broaden the scope of export financing instruments
Non-oil export-oriented enterprise that fulfills the
under-listed conditions shall be eligible to participate under the NESF:
Duly incorporated in Nigeria under the Companies and
Allied Matters Act (CAMA)
Has verifiable export off take contract(s).
Satisfactory credit reports from at least two licensed
indigenous Credit Bureau in line with the provisions of CBN Circular
BSD/DIR/GEN/ClR/O4/014 dated April 30, 2010.
Eligible transactions that shall quality for funding under
the NESF shall include:
Export of goods processed or manufactured in Nigeria;
Export of commodities and services, which are allowed
under the laws of Nigeria;
Imports of plant & machinery, spare parts and
packaging materials, required for export-oriented production that cannot be
Resuscitation, expansion, modernization and technology
upgrade of non-oil export industries;
Export value chain support services such as
transportation, warehousing and quality assurance infrastructure;
Working capital/stocking facility; and
Structured trade finance arrangements
Participating Financial Institutions
The following shall be eligible to participate under
Deposit Money Banks (DMBS).
Development Finance Institutions (DFIs)
Features of the NESF
Term loans under the Facility shall not exceed 70% of
verifiable total cost of the project subject to a maximum of N5, 000,000,000.00
The NESF shall have a tenor of up to 10 years and
shall not exceed the 3ist December, 2027.
Working capital/stocking facility shall be for one
year with the option of roll-over once subject to the approval of the CBN.
Repayments of principal and interest shall be
quarterly and in accordance with the agreed repayment schedule
Moratorium shall be for one (1) year.
In case of construction, option of roll over for a
period of up to one (1) year may be allowed, subject to approval by the CBN.
The Facility shall be granted at an all-inclusive
interest rate of 90/0 per annum.
Interest charges during Project Implementation I
Interest charges during implementation/Construction
phase of the project shall be dependent on the status and transactional
structure of the projects. They shall be categorized as follows:
Capitalization of interest - interest payable during
the implementation and construction period shall be added to the total facility,
subject to the 70% limit on total cost of project.
Pre-funding of interest - interest payable during
implementation and construction shall be from a pre-funded Debt Service
Submission of Requests
A PFI shall submit application to CBN on behalf of its
customer in the prescribed format.
In the case of loan syndication, the lead bank shall
submit application on behalf of other banks. All correspondence with respect to
the application shall be with the lead bank.
Each request for a facility is to be accompanied by
the following documents:
a) Written request from the project promoter to a PFI
seeking funding under the NESF.
b) Completed application form.
c) Certified true copies of documents on business
d) Applicant’s preceding three (3) years tax clearance
e) Audited statement of accounts for the last three
(3) years (where applicable) or the most recent management account for
companies less than three (3) years in Operations.
f) Feasibility study/Business plan of the project
g) Relevant permits/ licenses/approvals (where
h) Verifiable export orders/ contracts or other export
agreement and arrangements/commitments.
i) Environmental Impact Assessment (EIA) report (where
j) Draft letter of offer by PFI, loan repayment
schedule and credit risk report of the customer.
k) Any other document(s) that may be required by CBN.
PFIs shall submit Irrevocable Standing Payment Order
(ISPO) in respect of all projects approved under the scheme.
A participation agreement shall be signed between CBN
and each PFI.
Monitoring and Evaluation (M & E)
Monitoring and Evaluation of projects funded under the
Facility shall include on-site and off-site verification and routine monitoring
of projects by CBN and PFIs.
Roles and Responsibilities of Stakeholders
The roles and responsibilities of stakeholders under
the scheme shall be as follows:
The Central Bank of Nigeria (CBN)
The CBN shall:
a) Provide Loanable fund for the implementation of the
b) Issue the NESF guidelines.
c) Act as the managing agent.
d) Determine lending limits and applicable rates.
e) Provide regulatory and supervisory oversight.
f) Sanction PFIs for infractions.
g) Monitor and evaluate the projects.
h) Conduct impact assessment from time to time.
i) Review the NESF guidelines as may be deemed
necessary from time to time.
j) Invoke ISPO in case of default.
The Participating Financial Institutions (Pfls)
The PFIs shall:
a) Disburse funds to eligible export companies at the
b) Ensure timely disbursement of funds to approved
c) Ensure due diligence is followed in the
administration of credit facilities.
d) Bear the credit risk on loans granted to
beneficiaries under the NESF.
e) Ensure timely remittance of principal and interest
payments due to the CBN.
f) Monitor and ensure proper utilization of funds.
g) Comply with the operating guidelines of the
h) Comply with documentation requirements in section
6.2 above; and
i) Render periodic returns in prescribed formats or as
may be specified by CBN from time to time.
The beneficiary shall:
a) Utilize the funds for the purpose for which it was
b) Adhere strictly to the terms and conditions of the
loan and comply with all relevant laws and regulations.
c) Make the project site(s) and records accessible to
CBN and PFIs for inspection.
d) Provide periodic reports on the status of the
project in prescribed format as well as periodic financial statements in line
with extant company registration regulations.
e) Comply with the operating guidelines of the
f) Repay maturing loan obligations in line with
approved repayment schedule.
Discontinuation of the Facility
All undisbursed funds, repaid amounts or discontinued
facility shall be reported and funds returned to CBN within 5 working days
giving details of the facility and reasons for discontinuation.
Infractions and Sanctions
Penalty for defaults
a) In the event of default in loan repayment of
principal and/ or interest by the borrower, the PFI shall have the right to
charge its prevailing interest rate on the amount in default.
b) Failure of PFI to disburse funds to the borrower
within the period agreed in the loan agreement shall attract a penal charge of
the maximum lending rate of the PFI for the period that funds were not
c) Failure to remit principal and interest to the CBN
shall attract a penal charge of the maximum lending rate of the PFI for the
period that funds were not remitted; and
d) Non-rendition of returns or the rendition of false
returns shall attract the penalty stipulated by section 60 of the Banks and
Other Financial Institutions Act (BOFIA).
These Guidelines shall be subject to review from time
to time as may be deemed necessary by
the CBN. The Amendment would not have retroactive effect.