CBN unveils plans to earn $200bn/yr from non-oil exports

Godwin Emefiele

The Central Bank of Nigeria (CBN), has unfolded plans that will enable Nigeria earn up to $200 billion yearly from foreign exchange (FX) repatriation from the non-oil export sector.

CBN Governor, Godwin Emefiele, disclosed this yesterday during a media briefing at the end of the first Bankers’ Committee Meeting to be held this year in Abuja.

This is even as the Governor revealed that CBN will stop the sale of FX to Deposit Money Banks by the end of the year.

Thereafter, he said banks must begin to source their own FX from export proceeds, hence the need to support non-oil exporters in the country.

Speaking on the funds repatriation tagged: “RT200 FX Programme”, Emefiele said the measure was introduced because the export of primary unprocessed commodities does not yield much in foreign exchange returns.

He said: “After careful consideration of the available options and wide consultations with the banking community, the CBN is effective immediately, announcing the Bankers’ Committee RT200 FX Programme, which stands for the Race to $200 billion in FX Repatriation.

“The RT200 FX Programme is a set of policies, plans and programmes for non-oil exports that will enable us attain our lofty yet attainable goal of $200 billion U in FX repatriation, exclusively from non-oil exports, over the next three to five years.”

“Under the programme, which is to take effect immediately, the apex bank will provide concessionary and long-term loans for business people who are interested in expanding existing plants or building new ones for the sole purpose of adding significant value to the non-oil commodities before exporting same.

“These loans will have a tenure of 10 years, with a two-year moratorium and an interest rate of 5%.”

In order to avoid these sudden adjustments to our economic life, we need to focus on strategies that can help us earn more stable and sustainable inflows of foreign exchange.

FX rebate scheme

Similar to the naira for dollar programme, he explained that the RT200 FX, will also entail FX rebate scheme where exporters will be paid N5 for every dollar put into the economy.

“Today, we are also announcing the introduction of the Non-Oil FX Rebate Scheme, a special local currency rebate scheme for non-oil exporters of semi-finished and finished produce who show verifiable evidence of exports proceeds repatriation sold directly into the I & E window to boost liquidity in the market,” Emefiele said.

In recognition of the perennial problems of port congestion cited by exporters as a major impediment to improved operations and FX earnings, he said the CBN plans to establish a dedicated non-oil export terminal.  

He said the move is to diversify FX earnings away from oil to boost the Nigerian economy and enable it meet its import obligations.

“In order to avoid these sudden adjustments to our economic life, we need to focus on strategies that can help us earn more stable and sustainable inflows of foreign exchange,” he added.

He explained that the RT200 Programme would be anchored on five pillars – value-adding exports facility, non-oil commodities expansion facility, non-oil FX rebate scheme, dedicated non-oil export terminal, and biannual non-oil export summit.

Emefiele noted that many countries much less endowed than Nigeria were doing it, and expressed the belief that Nigeria could do even better.

He said: “Consider for example that agriculture exports alone from the Netherlands was about $120 billion last year. Yet, the Netherlands has a land mass of about 42,000 square kilometres, which is much smaller than the land mass of Niger alone, at over 76,000 square kilometres.”

However, the CBN Governor warned that the RT200 Programme is not intended to solve all of Nigeria’s problems in the export sector.

“It is only by boosting the productive and earnings capacity of this economy that we can truly preserve the long-term value of our currency, as well as the stability of our exchange rate,” he argued.

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