Money market

RT200 FX has improved Nigeria’s export remittances — CBN

Published

2 years ago

September 21, 2022

The introduction of the “Race to $200 billion in FX Repatriation” (RT200 FX) by the Central Bank of Nigeria (CBN) has spurred significant improvement in Nigeria’s export remittances, the apex bank has revealed.

The Principal Manager, Trade and Exchange Department, CBN, Mrs Anne Nnenna Ezekhennagha, disclosed this at the just concluded Finance Correspondents Association of Nigeria (FICAN) 2022 annual conference with the theme “Boosting domestic capacity for sustainable export earnings,” held in Lagos.

The CBN introduced the RT200 policy in February this year to reduce the country’s exposure to volatile sources of foreign exchange and improved sustainable forex inflow by giving rebates to exporters who repatriate their proceeds within a specific period of time.

The policy seeks to raise $200 billion in the next five years in forex earnings from non-oil sources by giving N35 for every dollar repatriated through the Investors and Exporters’ Forex window.

Ezekhennagha said the CBN had paid rebates to exporters who have taken the opportunity of the RT200 scheme in the first two quarters of the year and will commence another series of examinations and verification exercises so that the third quarter rebates would be paid.

“We have seen significant improvement, not just in the figures that have been repatriated, but also in the number of exporters that are now willing to come to the formal sector.

“A lot of our exports have been happening informally, but with this scheme, we have found that a lot more players in the export sector are willing to come to the formal sector,” she asserted.

She added that there has also been a significant increase in the number of commodities that are exporters from Nigeria, saying for instance, regarding “The solid minerals, we are seeing more and more players in that sector coming into the formal sector to report their exports and participate in the RT200 FX scheme. So, I would say it has been very successful so far.”

Meanwhile, an Assistant Director at the Nigeria Shippers Council (NSC), Mrs Adaora Nwonu, has stressed the need to fast-track the full automation of the country’s ports, explaining that this is crucial to boost its export.

She maintained that the cumbersome manual processing of export documents has been having negative impacts on Nigeria’s export, thereby inhibiting its forex inflow from non-oil exports.

According to her, there has been a significant improvement in the country’s ports with the introduction of the electronic call-up system by the Nigerian Port Authority (NPA), which has reduced the gridlock that usually characterised Apapa and its environment, and reduced export time by almost 50 per cent.

“We have advocated that we must automate. Automatation is the key. When you automate, it takes care of all the arbitral manual processes. So, we cannot run away from it,” she said.

She added that the reduction in the number of government agencies physically present in the ports has also contributed to the current improvement in the country’s ports, noting that automation would further reduce the number of agencies needed in the ports, though the agencies at the ports have been reduced from 14 to 8.

Nwonu argued that the port clearing processes could be streamlined manually with the use of scanners in the ports and address the long manual processes, thereby shortening the time exporters and importers spend clearing their goods.

“We can’t run away from the fact that we need to automate our ports, our processes. We have been doing that to ensure port processes are seamless operations. We ensure documents are exchanged remotely in an automated manner. Every operator in the port right now must automate their processes. We can tell that as of today we are about 60 per cent completed.

“If we have the scanners for example, in less than five minutes we scan and the data is shared with every other agency. That is what a scanner does” Nwonu posited.

She urged the government to build hard and soft infrastructures in the country’s ports to make them competitive and to attract more foreign earnings into the country.

“We at the Shippers Council know that if we don’t export, we will perish. The more trade we facilitate, the more trade will happen. So having this at the back of our mind, means that we are doing everything within our purview to ensure that we facilitate trade. The more trade we do that, the more economic prosperity for us,” the NSC Assistant Director added.

The Head, Strategy and Communication, Nigeria Export-import Bank (NEXIM), Mr. Tayo Omioji, disclosed that plans are in the advanced stage to float a regional shipping line to address the challenges associated with relying on foreign ships.

Speaking as one of the panelists at the occasion, Omioji noted, “In order to have an efficient port operation, there has to be a regional shipping/carrier so that we do not continue to rely on foreign ones. Hence, the need for us to have our own shipping line. That is why we are working on our own shipping line called the Sealink project.”

He said by the first quarter of 2023, the Sealink project will be in operation, adding that there is a huge need for more players to come into the domestic shipping sector.

“The idea was to raise funds but a series of things happened, first it was Ebola, we could not find a partnership agreement apart from their contribution in conceiving the idea. In terms of credit, we are quite advanced. We later thought of further expanding the scope of the project in addition to having a shipping project that allows moving our goods on international water. We also felt that we should find adequate scope in inland waterways for the project,” Omioji further explained.

Money market

Lagos, India to boost trade partnership

Published

4 days ago

May 1, 2024

NewsDirect

The Lagos Chamber of Commerce and Industry and the Confederation of Indian Industry have signed an agreement to boost trade partnership.

In a memorandum of understanding in Lagos on Tuesday, both parties observed that the agreement would enhance avenues for effective collaborations.

Lagos Chamber of Commerce and Industry Deputy President Knut Ulvmoen said that the partnership’s focus was to leverage the trade capacity of both parties.

Ulvmoen said that both parties would explore capacity in Information and Communication Technology, medical, training, agriculture, manufacturing and export, among others.

He acknowledged what he described as robust and enduring trade relations between Nigeria and India.

He noted that over the years, both nations had witnessed a steady growth in bilateral trade with significant contributions from various sectors.

“Today’s meeting serves as a platform to, not only strengthen the existing partnerships, but also to forge new alliances that will contribute to the sustainable growth and development of both nations.

“Together, we must seize this moment to identify synergies, exchange expertise, and explore innovative solutions to economic challenges.

“Let us leverage the collective wisdom of our industries to develop actionable strategies that will drive inclusive growth, foster entrepreneurship, and enhance competitiveness,” he said.

Indian High Commissioner Shri Balasubramanian expressed his belief in shared growth and prosperity by both countries.

He also emphasised the importance of Nigerian-Indian business collaboration.

Balasubramanian stated that the government of India was making efforts to build capacity in trade, seeking private sectors’ partnership to identify projects that could be profitable to the trade structure of both countries.

“The opportunities existing between both countries are enormous as more than 155 Indian companies in Nigeria employ many Nigerians.

“From oil to steel; to healthcare, we are willing to link Nigerians up with their counterparts in India as we explore avenues of collaboration and partnership,” he said.

Money market

Naira remains at N1,350 as CBN targets FX inflow for liquidity boost

Published

4 days ago

May 1, 2024

NewsDirect

The naira on Tuesday steadied at 1,350 per US dollar on the parallel market, popularly called black market.

On Monday morning, the naira opened the foreign exchange (FX) market at the same rate before closing at N1,360/$1 on the same day at the black market.

At the official market known as the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira on Monday fell to 1,419.11 per dollar, the lowest since March 13, 2024 at the official FX market, following slowing inflows occasioned by the withdrawal of funds by Foreign Portfolio Investors (FPIs).

The intraday high closed at N1,451 per dollar on Monday, weaker than N1,410 closed on Friday. The intraday low also depreciated marginally to N1,060 on Monday as against N1,051/$1 closed on Friday at NAFEM, data from the FMDQ Securities Exchange indicated.

Dollars supplied by willing buyers and willing sellers declined by 52.16 percent to $147.83 million on Monday from $309.01 million recorded on Friday.

On day to day trading, the naira weakened by 5.63 percent as the dollar was quoted at N1,419.11 on Monday as against N1,339.23 quoted on Friday at NAFEM.

During the recent Monetary Policy Committee (MPC) meeting, Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, emphasised the critical need to attract inflows to maintain liquidity in the foreign exchange market and stabilize the exchange rate.

In his statement, Governor Cardoso highlighted the importance of addressing inflationary pressures through exchange rate management to safeguard both price stability and long-term economic growth.

“Failure to tame inflationary pressure using the exchange rate channel may jeopardise not only price stability but also long-term growth,” stated Governor Cardoso.

Addressing concerns raised at the March 2024 MPC meeting, Governor Cardoso emphasised the need to reduce negative real interest rates to attract capital flows and enhance liquidity in the FX market. He stressed the significance of attracting capital flows through foreign portfolio investments and moderating exchange rate pressures to mitigate the impact of exchange rate pass-through on inflation, particularly in Nigeria’s import-dependent economy.

Commenting on the monetary situation, Mustapha Akinkunmi highlighted a decline in Nigeria’s reserve money by 24.91 percent to approximately N22.2 trillion by the end of February 2024. Despite this, broad money (M3) supply increased to N93.7 trillion, contributing to inflationary pressures. Nigeria’s external reserves also decreased to US$32.87 billion as of March 19, 2024, from US$33.68 billion in February 2024.

Although current reserves cover imports for 5.7 months of goods only and 4.5 months of goods and services, the country’s ability to repay short-term debts using reserves exceeded the threshold at 104.0 percent, he said.

According to him, the reserves-to-broad money ratio of 33.1 percent surpassed the 20.0 percent threshold, indicating Nigeria’s capacity to manage capital flows effectively.

Governor Cardoso’s emphasis on attracting inflows and managing exchange rate pressures underscores the CBN’s commitment to maintaining stability in the FX market and combating inflationary challenges in Nigeria’s economy.

Money market

Mobile channel most vulnerable, as financial institutions lose N17.67bn to fraudsters in 2023

Published

5 days ago

April 30, 2024

NewsDirect

Latest report by the Nigeria Inter-Bank Settlement System (NIBSS) on Annual Fraud Landscape (January to December 2023) has revealed that commercial banks, Point of Sales (PoS) operators and others lost about N17.67 billion to fraudsters in 2023.

The report published on its website on Monday identified mobile channels as the most vulnerable avenue for fraudsters notably Web and POS businesses.

The report noted that fraud perpetrated via mobile channels increased by five percent compared to the previous year.

It also suggested some of the regulations inputted to check fraud in financial institutions need detailed examination, modification and reinforcement.

According to the statistics revealed by the report, fraud count dropped by six percent to 95,620, as actual loss from fraud grew by 23 percent in 2023 when compared to 2022 with the first quarter being the month with the highest fraud volume in 2023 and the fourth quarter being the month with the highest fraud value.

It also disclosed that the month of May recorded the highest fraud count of 11,716, followed by February with 9,492 while October saw the highest actual loss in 2023 at N3.7 billion, followed by January with N2.7 billion. It said the count of Web Fraud decreased by 38 percent and ATM fraud recorded a 64 percent reduction from 2022 to 2023.

Also, in 2023, people aged 40 and above remained the primary targets of fraudsters, which NIBSS said signified a persistent focus on the targeting strategy of fraudsters.

“This sustained trend emphasises the enduring appeal of the demographic group as potential victims, reinforcing the need for continuous efforts to educate and protect individuals in this category from fraudulent activities,” NIBSS said.

In 2023, a total of 80,658 unique customers fell for the gimmicks of fraudsters which is four per cent less than 84,130 customers recorded in the previous year.

“This decline, though apparent, does not diminish the severity of the issue, urging the financial industry to remain vigilant, enhance security measures and collaboratively address the tenacious challenges posed by fraud,” it said.