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The Central Bank of Nigeria (CBN) has offered a N10 billion Revolving Trade Facility to the Central Bank of Liberia (CBL) under the Comprehensive Economic Package (CEP) of the Federal Republic of Nigeria to the Republic of Liberia in response to the request by His Excellency Dr. George Manneh Weah, Sr. to His Excellency Muhammadu Buhari.

Discussion on the CEP started in February 2020 in Abuja, Nigeria. A high-level delegation led by Hon. Samuel D. Tweah, Jr., Minister of Finance and Development Planning met with the Nigerian Authorities in Abuja to discuss the details and modalities of the CEP. The Executive Governor of the Central Bank of Liberia (CBL), Hon. J. Aloysius Tarlue, Jr. was part of the delegation. Prior to the CEP discussion, the CBL had started discussion with the CBN regarding a currency swap arrangement (CSA), which was intended to reduce the pressure for foreign exchange for importation and promote trade between Nigeria and Liberia in the spirit of the West African Monetary Zone (WAMZ). The proposed Revolving Trade Facility seeks to achieve the same objective as the currency swap.

In March, the CBN sent to the CBL a draft Memorandum of Understanding (MoU) regarding the proposed Revolving Trade Facility. The technical team of the CBL has been engaged with key stakeholders, including the business community, commercial banks and the line government agencies with the view of fine tuning the draft MoU to meet the needs of the country. The stakeholders’ consultation will remain a key part of the implementation framework to ensure that the desire benefit of the facility is received by Liberia.

Nature of Facility

The proposed Revolving Trade Facility is a Naira-denominated facility with the primary and sole purpose of promoting trade between Nigeria and Liberia. There is no fixed timeframe for the facility. The facility will continue to run as long as the parties desire; however, it may be terminated subject to the conditions stated in the MoU. It is a revolving facility that will be utilized by the beneficiaries through Nigerian-subsidiary banks operating in Liberia.

Key Terms and Conditions

The key terms and conditions of the facility are as follows:

* The interest rate for the facility is 6 percent per annum with an administrative fee of 1 percent and a default fee of 1 percent. It is expected that the participating commercial banks will charge a reasonable margin;

* All repayments are to be made in Naira ONLY;

* The facility is meant for payment and settlement of purchases of goods and services produced in Nigeria ONLY, subject to the export prohibition list (see appendix 1 );

* Each drawdown/disbursement from the facility is to be repaid within six months, failing which the outstanding facility will be considered delinquent and subject to 1 percent default penalty;

* Only businesses registered in Liberia are to benefit from the facility; and

* All disbursements will be subject to full compliance with the requirements of Article 5 of the MoU (see appendix 2) with regard to specified documentation requirements.

Beneficiaries of the facility and key requirements

The target groups are Liberian-registered businesses which are members of the Liberian Chambers of Commerce or other organized business groupings, including Liberia Business Association (LBA).

Beneficiary importers would submit the following documents to their banks:

a. Evidence of incorporation of company

b. Evidence of registration with appropriate regulatory agency

c. Bill of lading/Airway bill/ Roadway bill

d. Commercial Invoice/Proforma invoice as applicable

e. Form M (for Imports) into Liberia from Nigeria

f. Single Goods Declaration Form

g. Tax Identification Number

Role of Key Stakeholders

Central Bank of Liberia

* Facility owner and manager

* Responsible to ensure that the facility is managed in keeping with the terms and conditions of the MoU and the Letter of Offer

* Responsible for all repayments and default payments

* Responsible for providing the needed foreign exchange for settlement and repayment of the facility

* Lead the inter-governmental and public-private consultation

Ministry of Finance and Development Planning

* Responsible to provide a Sovereign Guarantee for the facility

* Responsible to provide the needed policy support the successful implementation of the facility

* Port clearing APM Terminal

Liberia Revenue Authority

* Responsible for ensuring the enforcement of the ECOWAS Trade Liberalization Scheme (ETLS) and the Common External Tariff (CET)

* Expedite customs procedures to ensure timely clearance of goods

Ministry of Commerce and Industry

* Sensitize the Chambers of Commerce and organized business groups to promote trade between the two countries

* Provide guidance on current trade policy of Liberia and goods and services that Liberia could benefit from

* Responsible to share information on the prices of the targeted commodities

Liberian Business Community

* Responsible to identify potential areas and sectors for trading

* Building collaboration with the business community in Nigeria, including suppliers

Commercial Banks

* Responsible for managing the facility based on a signed MoU with the CBL

* Responsible for screening of and due diligence on eligible beneficiaries

* Responsible for ensuring repayment of all disbursements

* In collaboration with the CBL, prepare and process each disbursement request to the CBN and their respective parent banks in Nigeria.


Export Prohibition List

1. Maize

2. Timber (rough or sawn)

3. Raw hides and skin (including Wet Blue and all unfinished leather) H.S. Codes 4101.2000.00 - 4108.9200.00

4. Scrap Metals

5. Unprocessed rubber latex and rubber lumps

6. Artifacts and Antiquities

7. Wildlife animals classified as endangered species and their products e.g. Crocodile; Elephant, Lizard, Eagle, Monkey, Zebra, Lion etc.

8. All goods imported


Products produced in Nigeria

Nigeria produces a range of goods that include milled grain, vegetable oil, meat products, dairy products, sugar refined, soft drinks, beer, cigarettes, textiles, footwear, wood, paper products, soap, paint, pharmaceutical goods, ceramics, chemical products, tires, tubes, plastics, cement, glass, rice, etc. In addition, the country is one of the major oil-exporting countries in Africa.

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