CBN unveils RT200 FX programme to boost non-oil exports

The Central Bank of Nigeria (CBN), has unveiled a foreign exchange revenue expansion scheme called RT200 FX  Programme.

The programme, which stands for the “Race to US$@00 billion in FX Repatriation,” was announced Thursday by the CBN Governor, Mr Godwin Emefiele, during his Post-Bankers Committee press briefing in Abuja.

According to Emefiele, the scheme was introduced after careful consideration of the available options and wide consultations with the banking community, to consolidate the gains of the various initiatives created about two years ago to safeguard the economy from collapsing under COVID-19 pandemic.

He emphasised the need for Nigeria to look beyond oil and focus on the huge potentials that could sustain the economy, create jobs and expand the market for non-oil exports of US$200 billion in foreign exchange repatriation within three to five years.

Throwing more light into the initiative, Emefiele said, “The RT200 FX Programme is a set of policies, plans and programmes for non-oil exports, which will enable us attain our lofty, yet attainable goal of US$200 billion in FX repatriation, exclusively from non-oil exports, over the next 3-5 years.”

He said the RT200 Programme will thrive on five key anchors namely, Value-Adding Exports Facility, Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme

Expantiating further on the kernels of the five anchor-areas, Emefiele said, “The Value-Adding Export Facility will provide concessionary and long-term funding for business people, who are interested in expanding existing plants or building brand new ones for the sole purpose of adding significant value to our non-oil commodities before exporting same.

“This is important because the export of primary unprocessed commodities does not yield much in foreign exchange. In Nigeria today, we produce about 770,000 metric tonnes of Sesame, Cashew and Cocoa.

“Of this number, about 12,000 metric tonnes are consumed locally and 758,000 metric tonnes are exported. The unfortunate thing though, is that out of the 758,000 metric tonnes that is exported annually, only 16.8 percent is processed.”

On the second anchor – the Non-Oil Commodities Expansion Facility, Emefiele said it  will also be a concessionary facility designed to significantly boost local production of exportable commodities.

“This facility will be designed to ensure that expanded and new factories that are financed by the Value-Adding Facility are not starved of inputs of raw commodities in their production cycle.

“A massive boost in the production of such commodities, will also help dampen/moderate the prices of these commodities, so that the expected increase in demand for them does not become a pressure point for aggregate prices in the market.

“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.

“Analogous to the Naira4Dollar Scheme, which has helped boost remittances from only $6 million per week to over $100 million per week, we shall establish the modalities for granting a rebate for each dollar that non-oil exports proceeds that an exporter sells into the market, for the benefit of other FX users and not for funding its own operations.

“In recognition of the perennial problems of port congestion, cited by exporters as a major impediment to improved operations and foreign exchange earnings, the ‘RT 200 FX Programme’ has also created the construction/establishment of a Dedicated Non-Oil Export Terminal as the third anchor.

“According to the African Centre for Supply Chain Practitioners, Nigeria loses about US$14.2 billion annually due to congestion at our ports.

“Paraphrasing from an article by the Financial Times in December 2020, the congestion has become so bad that, while it costs US$3,500 to ship a 40-feet container from China to Lagos, which is a distance of 22,000 kilometres, it costs US$4,000 to move the same container from the port to mainland Lagos, a distance of only 12 kilometres.

“If we are to reach our goal of US$200 billion in non-oil exports, then we can neither ignore nor wish away this problem.

“We must confront it head-on and provide a solution.

“That is why we are today, throwing a challenge to all State Governments that have existing ports and are willing to partner with the Bankers Committee to establish not only a dedicated export terminal, but also the entire ecosystem of world-class infrastructure needed for non-oil exports.”