The Nigerian Export-Import (NEXIM) Bank has called for the speedy passage of the Factoring Bill presently before the National Assembly to enable Nigeria tap into €2.6 trillion global factoring market.
This call was made by the Chairman of the Board of NEXIM and Deputy Governor, Economic Policy, Central Bank of Nigeria (CBN), Dr. Joseph Nnanna, at the Nigerian Factoring Roundtable held in Abuja recently.
According to the duo, Africa’s share of the €2.6 trillion global factoring volume was less than 1 per cent with Nigeria not having a share.
Factoring is a method popularly adopted by exporters to help accelerate their cash flow. The process enables the exporter to draw up to 80 per cent of the sales invoice value at the point of delivery of the goods and when the sales invoice is raised.
According to Nnanna, “if passed, the bill would not only promote a suitable regulatory and legal environment to support the rapid development of factoring services, but would also contribute towards integrating Nigeria into the global factoring market.”
While calling for the speedy passage of the bill, which has passed the second reading at the National Assembly, the Managing Director and Chief Executive Officer of NEXIM Bank, Abba Bello, stressed the need for continued sensitisation, constructive engagement and capacity building to stimulate necessary investment interests and sustain the momentum towards rapid development of factoring in Nigeria.
He noted that NEXIM Bank had observed a high degree of correlation between the global growth in factoring volumes and the increasing preference for trading under open accounts, which currently accounts for over 80 per cent of international trade, saying the bank would continue to lead the debate and analyse the impact of such a review within the context of the peculiarities of the domestic market.