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Politics And Reconstruction of Tin Can Port (2)

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But for a third party defender of Bello-Koko against a critique’s allegation of incompetence and official laidback attitude, who in passing disclosed that the NPA has secured $800million facility from African Export-Import Bank (Afreximbank), perhaps nothing would have been known about it.

It was through Olusegun Williams who took on the gauntlet in defence of the NPA helmsman in an image laundering article that disclosed that the export-import bank has agreed to grant the authority the above sum, and that the signing of the agreement was imminent.

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That was in March, there has been no official statement that the deal has been concluded. For a starter, Afrexim Bank was not part of the financial institutions penciled down by NPA for discussion; according to Bello-Koko multilateral financial institutions listed for discussion includes the French Development Agency (AFD) African Development Bank (AfDB), European Investment Bank (EIB), and Sanlam Infraworks (a Central Bank of Nigeria approved fund manager for InfraCorp); through which the authority desire to access long term low-interest credit for the ports infrastructure upgrades and expansion.

Aside necessary questions about the capacity of Afrexim Bank to provide the facility at the expected low-interest rate, the executive management of NPA have a moral obligation to explain the sudden twist for the choice of the export-import support bank, which apparently, is not even strong enough to fulfill its primary objective without support from stronger development partners.

If Afrexim Bank is going to look up to such support, and there are strong indications it would, what would be the impact of that on the cumulative interest calls for Nigeria, since project financiers  are not charity organizations.

As a top professional financial expert and one who no doubt is conversant with development banking, Bello-Koko cannot feign ignorance of the elongated risks structure involved in an unintended but obvious assembly of lending consortia.

The modalities and bid processes through which Afrexim Bank emerged the choice lender also appears cloudy since the NPA is yet to make a statement about this. Full disclosure and accountability is not only desirable but required because we are talking about a huge state financial project here.

Only a forth night ago, in the bid to deepen its core operational capacity, Afrexim approached the renown global player, International Islamic Trade Finance Corporation (ITFC) for support.

According to the news release, “African Export-Import Bank (Afreximbank) has announced a collaboration with the International Islamic Trade Finance Corporation (ITFC) in a risk participation facility designed to enhance Afreximbank’s ability to promote and support trade finance activities in Africa.

“Under the arrangement, Afreximbank will act as a confirming bank or trade confirmation guarantor on behalf of the approved African Financial Institutions and provide these services in favour of Beneficiary or International Banks. ITFC will act as the issuer of irrevocable reimbursement undertakings to cover up to 50% of Afreximbank’s risk exposure on the African Financial Institutions.

“Undertaken as part of the Afreximbank’s Trade Facilitation Programme (AfTRAF), the arrangement will be used to increase intra and extra-African trade and support the export and import of vital goods and services to Africa. This arrangement will further support the Bank’s capacity to stimulate African trade as it continues to withstand the pressures of the ongoing Ukraine-Russia crisis.

“The facility will allow Afreximbank to mitigate risk exposures associated with certain African financial institutions, or to leverage the Bank’s risk appetite to generate increased business from certain African financial institutions. In addition, the risk participation limit will aid the Bank in originating and distributing unfunded short-term letters of credit confirmation risks to acceptable parties, whilst retaining part of the returns.”

From the above, clearly Afrexim is not a capital project financing institution, and the executive management of NPA should be advised to desist from foisting on Nigeria another insane interest guzzling lender that has no qualification to deliver on the facility required, lest it force on Nigeria another unrealistic and avoidable prohibitive interest portfolio to worse our already overburdened borrowing obligations.

The Afrexim/ITFC partnership should ring the alarm bell that Nigeria will not get the right and realistic services from Afrexim.

Whilst there is absolutely nothing strange with such inter-banking system, the development for the NPA and stakeholders however cannot be waved aside, not especially with the knowledge about secretly prequalifying Afrexim that was never in the picture as the preferred financier; something definitely is not adding up. There is a layer of secrecy that makes the choice of Afrexim very suspicious; and the incoming government should look into the matter quickly before the implosion of another unbridled, narrow minded transaction is concluded.

Next edition we hope to be able to unveil the official veil covering the transparent administration of the troublesome NPA $800 loan, and in addition, also take another closer look at the administration of the critical essentials for which the loan became necessary.


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