Canadian export agency might finance Nigeria’s ailing aviation sector.
This was one of several discussions between the Nigerian delegation led by Vice President, Namadi Sambo, and some Canadian investment promotion agencies at the Canada-Nigeria Investment Conference, CNIC, 2013, held in Toronto between May 2 and 4 on the theme: ‘Canada-Nigeria Synergy Vision 20:2020’.
The Conference, organized by the Nigerian High Commission in partnership with the Canadian Council on Africa and the Department of Foreign Affairs and International Trade, Canada, was designed in line with the vision 20:2020 Economic Transformation Agenda of the Federal Government.
More than 400 participants drawn from public and private sectors, including government officials of the two countries, attended the conference; which provided Nigeria the platform to showcase 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.
Nigeria is Canada’s largest economic partner in sub-Saharan Africa, with both countries enjoying an ongoing bilateral trade relationship worth more than $3billion in 2011.
NEXIM Bank, one of the key sponsors of the conference, seized the opportunity to further explore joint collaboration opportunities it initiated with EDC, the Canadian export credit agency, when the Canadian Minister of International Trade and Minister for Asia-Pacific Gateway, Ed Fast, led an investment exploration mission to Nigeria last January.
The NEXIM Bank Managing Director, Roberts Orya, in a meeting with the EDC team highlighted the mandate of the export-import bank to include the promotion of 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.
In pursuit of the mandate, Mr. Orya said the Bank’s current strategic initiatives are targeted towards boosting employment creation and foreign exchange earnings in the Manufacturing, Agro-processing, Solid Minerals and Services (MASS), particularly in the tourism, transportation, and entertainment sectors of the Nigerian economy.
According to him, the Bank has put in place a dynamic enterprise-wide risks management and corporate governance framework that helps provide access to financing to companies that promise good return on investments.
The Regional Manager of EDC for Africa, Europe and Middle East, AEME, Diane Belliveau, said the EDC, a wholly owned Canadian government agency is mandated to support and develop Canada’s export trade by helping Canadian companies respond to international business opportunities.
According to Ms. Belliveau, the EDC, like NEXIM, does not rely on governmental annual appropriations, but is financially self-sufficient; operating much like a commercial institution by collecting interests on its credit facilities as well as premiums on its insurance products, apart from selling treasury department bonds and raising money in global capital markets.
The EDC, she said, also offers insurance and financial services, bonding products and small business solutions to Canadian exporters and investors and their international buyers, adding that it also supports Canadian direct investment abroad and investment into Canada, mostly in partnership with other financial institutions and through collaboration with the government of Canada.
In 2012 alone, she said the agency helped more than 7,400 Canadian companies to do business in 87 countries, with majority of the companies being small business, and more than 30 per cent of their operations being in fast-growing emerging markets, providing financing to several African countries, including Ghana, South Africa, Gabon, Tanzania, Ethiopia, and Rwanda.
The loans were to help finance to a wide range of activities including sale of technology, procurement of various goods and services, purchase of aircraft engine, spare parts and services.
“The EDC will be comfortable in working with a sister government-owned ECA, like NEXIM, especially considering its robust enterprise-wide risk management framework and corporate governance structure that the Bank has put in place,” Ms Belliveau said.
In particular, she expressed interest in further exploring the possibility of expanding and extending ECA’s project financing activities in support of future procurement of various Canadian goods & services by Nigerian companies, especially in the aviation sector, mining, agro-processing.
She noted that with NEXIM’s operational frameworks, ownership structure, and the Foreign Investment Promotion Agreement, FIPA, signed by Nigeria and Canada in Ottawa prior to the Conference, the conditions are right for a mutually beneficial collaboration between both agencies, with NEXIM acting as a veritable channel for appropriate EDC’s financings.
“In the short term, the EDC would be interested in providing further financing to the huge and profitable aviation sector in Nigeria where it already has a valuable client that is progressively leading private sector investment in the sector,” she said.