Three companies from Nigeria and China have signed an agreement aimed at helping Nigerian businesses access financing for the importation of machinery, equipment and other productive assets from China
The Tripartite Cooperation and Market Development Agreement on Nigeria Import Trade Financing and Supply Transactions was signed in Abuja by Zhengzhou Youngshell International Supply Chain Management Co Ltd, Megavalues Integrated Services Ltd and CUSH Promotions Ltd.
The agreement is expected to connect qualified Nigerian importers, manufacturers, businesses, educational institutions and government establishments with Chinese manufacturers, suppliers and financial institutions
Under the arrangement, participating Chinese lenders may provide financing at indicative interest rates of between five and eight per cent annually, with repayment periods ranging from about three months to five years or longer, depending on the transaction and the nature of the assets involved
However, the parties said the financing would be subject to lenders’ due diligence, equity contributions, acceptable security, regulatory requirements and approval by participating financial institutions
The initiative is aimed at addressing the difficulty faced by Nigerian businesses in raising affordable long-term capital to acquire machinery and expand production
The financing covers industrial and agricultural equipment, complete production lines, automotive and transport assets, renewable energy systems, construction equipment, laboratory and educational equipment, as well as digital and technical training infrastructure
Under the proposed arrangement, Nigerian importers will identify their equipment or goods requirements, while CUSH Promotions will coordinate preliminary engagements
Zhengzhou Youngshell will facilitate contacts with Chinese manufacturers and suppliers, including quotations, technical specifications and supply contracts
Megavalues will coordinate the preparation of sales contracts between importers and Zhengzhou Youngshell, while participating Nigerian financial institutions will conduct local due diligence and liaise with the relevant Chinese lenders
The companies said the partnership would focus on productive assets that could boost local manufacturing, agro-processing, technology adoption and employment rather than encourage dependence on finished consumer goods
The initiative will also target universities, polytechnics, technical institutions and research organisations seeking laboratories, workshops, renewable energy systems, mobility solutions and specialised equipment
The agreement was signed by Jianhua Sun, Managing Director of Zhengzhou Youngshell; Fred Ogwazu, Managing Director/CEO of Megavalues Integrated Services; and Ossai Ilome, Managing Director/CEO of CUSH Promotions