CBN engages Banks on $200bn non-oil export revenue initiative in five years
…To stop sale of FX to Banks by December 2022
By Moses Adeniyi
Amidst calls for diversification of the economy base by growing the non-oil sector in Nigeria, the Central Bank of Nigeria (CBN) has announced an initiative to stimulate non-oil exports, with a $200 billion foreign exchange (FX) income target between a period of the next three to five years.
The initiative tagged ‘RT200 Programme’, as aimed by the Bank, would frontally address strains of inadequacy of foreign exchange challenging the economy.
RT200 which is to take immediate effect, eyeing $200bn non-oil FX revenue, is designed to house policies, plans and programmes to grow non-oil exports enabling accruals of $200 billion in forex repatriation, exclusively from non-oil exports, over the next three – five years.
The programme bearing close resemblance to the naira-for-dollar programme, would also entail a forex rebate scheme where the exporters would be paid N5 for every dollar they put into the economy.
CBN Governor, Mr. Godwin Emefiele, who made the working parameters of the initiative known at the end of the Bankers’ Committee meeting, in Abuja, on Thursday, said under the programme, the Apex Bank, working with Money Deposit Banks, is to fund the construction of dedicated non-oil export terminals, to eliminate the delays and glitches currently experienced by exporters.
This is just as the Apex Bank has disclosed that it would stop the sale of FX to Deposit Money Banks by December, the end of the year 2022.
As noted by Emefiele, the plan to establish a dedicated non-oil export terminal was in response to address the perennial clustering of port congestion cited by exporters as a major impediment to improved operations and foreign exchange earnings.
Among other measures to further achieve the objective, the Apex Bank disclosed it would also provide loans to companies for value-addition and production of finished goods for export at 5 per cent interest for a 10-year period, with two years of moratorium.
Also embodied as key features of the programme, according to the CBN Governor included Non-Oil Commodities Expansion Facility; Non-Oil FX Rebate Scheme; and Biannual Non-Oil Export Summit.
Giving insight into the working parameters, Emefiele mentioned that rather than the prevailing order of exporting raw cocoa, with minimal export proceeds, the new initiative would fund companies to produce chocolate in the Country, with stronger export value.
According to him, such agricultural extension chains as cashew processing, currently at an infinitesimal 5 per cent of the nation’s production, as well as, sesame seeds processing would be prioritised.
“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.
..CBN to stop sale of FX to Deposit Money Banks by December
Emefiele, at a press briefing on the launch of the CBN’s new forex repatriation scheme, RT200, held after the Banker’s Committee meeting on Thursday, in Abuja, said banks must begin to source their forex from export proceeds.
In his submission, the imminent policy would prompt the Banks to support non-oil exporters in the Country, as a means of sourcing FX.
According to Emefiele, the decision was in line with the Apex bank’s new commitment to boost the Country’s foreign reserves through proceeds from non-oil exports.
As at December, the monthly economic report from the CBN puts the provisional value of non-oil exports at USD0.46bn for July 2021, drawing from data in the bank’s quarterly statistical bulletin (QSB). Against Nigeria’s huge export potential, non-oil exports still account for an infinitesimal percentage of total export value, accounting for about 10% of overall exports in July.
According to the CBN’s QSB which goes as far back as FY ’08, the share of non-exports to total peaked at 16.1% (USD10.5bn) in FY 2019.
