Foreign
Input Facility (FIF): The facility provides manufactures of
export products with foreign exchange for the importation of capital equipment,
packaging materials and raw materials for the production of finished or
semi-finished export products, presently, FIF is made to benefit small and
medium enterprises.
Stocking
Facility (SF): This facility is provided in local currency
and it enables manufacturers of exportable commodities to produce adequate
stocks of raw materials (which may be seasonal in nature) to keep their
production at optimal level, particularly during periods in which such
materials are scare. The stocking facility is available for a
maximum period of
one year and is available for a concessionary interest rate to enhance the
price competitiveness of the manufactured export goods.
Trade
information and export advisory services: In addition
to the above facilities, NEXIM provides a series of trade information and
export advisory services directly to exporters. The bank provides prices and
current information to exporters on inquiry. This service is made possible on
inquiry. This service is made possible by NEXIM acquisition of Renters
Terminals, which provides visual information on current prices of export
commodities at the international market and also current exchange rate of all
the major currencies.
Another
strategy adopted by the Nigerian government is the Exchange rate devaluation.
Devaluation is a way of correcting balance of payments deficits. It is the
lowering of the exchange rate between a country’s currency and other
currencies. It is important to know that devaluation has significant effect on
the redistribution has significant effect on the redistribution of domestic
resources. As Kreinin puts it, domestic price and income effects operates
against the relative price effective in improving balance of payments.
Therefore, devaluation brings about domestic distribution of resources to its
success which will enable exporters to gain a considerable competitive edge
abroad. And at the same time, the prices of imports will increase in terms of
the domestic currency. More importantly, what occurs is a differential increase
because prices rise more in the foreign trade industries than in the domestic
sectors. Consequently, there seems to be an important change in relative prices
within the economy. Hence the ratio traded goods to those imported will
increase. This will therefore attract resources to those industries that
produce internationally traded goods. In most cases, this will make the
domestic economy more efficient, thereby promoting the types of production that
will improve the balance of payments. Many economists now consider this to be a
very important effect in the analysis of devaluation (Kreinin, 1983).
The
analysis shows that devaluation will likely help a country’s external position.
Furthermore, it will also lead to an expansion of income and employment. It is
also important to know that domestic expansion is usually considered as a
precondition for improvement in the balance of payments. This is because the
increase in the production of export goods and import subsidies requires the
employment of new resources.
The
main aim of devaluation of Nigerian currency was to make her export cheaper in
the international market which would increase the demand for these exports in
the international market. Imports are made more expensive and exports are made
cheaper (Teriba, 1985).
It
is sad to note that the devaluation has not improved the country’s external
position. Today, the Nigerian external sector is still characterized by huge
deficits in the balance of payments, sharp depreciation of the naira, exchange
rate and sharp depletion in the country’s external reserves (Gbosi, 2001).
Other institutional support are:
1.
The introduction of import duty draw back
which allows importers to claim repayment of the import duty paid on raw
materials used in producing export goods.
2.
Manufacture in bond scheme which allows the
clearance of imported raw materials for use in export production without
repayment of import duty.