The Central Bank of Nigeria (CBN)’s non-oil exports repatriation rebate scheme appears to be yielding fruits as investigations reveal that inflows into the Investors and Exporters (I&E) window improved in the month of March.
According to data obtained from the FMDQ’s website, total inflows into the I&E window rose by 59.2 percent month-on-month (m/m) to $1.49 billion in March as against $937.60 million recorded in February.
The data further revealed that local inflows increased by 46.9 per cent m/m to $1.20 billion and this was primarily due to higher inflows from the CBN (+240.3 per cent m/m), exporters (+7.2 per cent m/m) and non-bank corporates (+50.9 per cent m/m) in the review period.
On the other hand, while foreign inflows rose to $291.90 million, they remain significantly below pre-pandemic levels (2019FY monthly average: $1.56 billion). According to economic analysts, this is due to the current FX liquidity constraints, an overvalued currency and absence of significant macro reforms.
Commenting on the report, analysts at Cordros Research said, they expect FX liquidity conditions to remain frail in the absence of reforms to attract US dollar inflows into the economy over the short to medium term.
“The low FX liquidity conditions will also be driven by lingering global uncertainties and higher global interest rates, limiting foreign inflows to the economy. Thus, foreign investors will need some convincing actions as regards flexibility and clarity in the FX framework going forward,” they said.
In its effort to increase the country’s foreign reserves, the Central Bank had launched a rebate scheme that targets to increase the nation’s reserves by $200 billion in FX earnings from non-oil proceeds over the next five years.
Under the new rebate scheme, the CBN also said it has committed to providing some financial incentives to Nigerian exporters of semi-finished and finished goods (manufactured in Nigeria), who sell their export proceeds at the I&EW; or exporters of goods and services (information technology & creative businesses) that are permissible under the export prohibition list.
The apex bank had at a recent bankers retreat revealed that progress has been made in generating non-oil export revenues in 2022 via the RT200 programme with its Governor, Godwin Emefiele, saying export proceeds repatriation earned as rebates stood at $62 million in Q1, $622 million in Q2, $850 million in Q3 all in 2022.
“We ran into almost $1 billion during Q3 2022. We are seeing the repatriations that have resulted in almost $2 billion coming in this year (2022),” Emefiele said.
Emefiele stated that every Deposit Money Banks (DMBs) must grant at least a minimum of N500 billion in loans to export oriented companies.
“We are saying that we draw the line and that every year, the banks, the banks have committed that they will grant export facilities to the tune of at least N500 billion which the CBN will graduate amongst most banks. The large banks will take a larger share of it while the smaller banks will take the smaller share.
“So what we are saying is that this is intended to further stimulate export financing and also encourage export of goods out of the country so we can generate export proceeds in an exponential way that would eventually be high,” he explained.