CBN announces new programme to attract $200bn foreign exchange annually

By Matthew Eloyi

The Central Bank of Nigeria (CBN) has launched a foreign exchange programme endorsed by the Bankers’ Committee to assist the country in repatriating $200 billion in foreign currency per year.

At the post-Bankers’ Committee meeting in Abuja on Thursday, CBN Governor, Godwin Emefiele revealed the idea dubbed “RT200 FX scheme.”

The move comes as part of the country’s aggressive effort to boost foreign exchange earnings.

Foreign exchange crunch is depleting the value of the naira as well as the Nigerian foreign exchange reserves.

Nigeria earns foreign currency from foreign portfolio and direct investment, crude oil import receipts, diaspora remittances, and export proceeds.

The sources were badly hit by the Covid-19 pandemic in 2020 and Nigeria has not recovered fully from the negative impact of the crisis.

Emefiele said, “For the inadequacy of FX supply and the constant pressure on the exchange rate, we believe that the lessons we have learnt from our policies on remittances can be applied in improving some aspects of our FX inflow into the country.

Emefiele lamented that the four sources are unreliable as they are prone to global economic developments.

In his words, “We have all been witnesses to the ever-changing fortunes of oil exporting countries. In order to avoid these sudden adjustments to our economic life, we need to focus as a nation on strategies that can help us gain more stable and sustainable foreign exchange inflows into our country.

“After careful consideration of the available options and the wide consultation of the banking community, the CBN is effectively announcing the Bankers Committee RT200 FX Programme which stands for the ‘Race to $200bn in FX’ repatriation into Nigeria.

“The RT200 FX programme is the set of policy plans and programmes for non-oil exports that will enable us attain a lofty yet attainable goal of $200bn in FX repatriation exclusively from non-oil exports over the next three to five years and we are optimistic that this can be achieved.”

Emefiele disclosed that the RT200 FX programme will have five key anchors which include: value adding exports facility; non-oil commodities expansion facility; non-oil FX rebate scheme; dedicated non-oil export terminal and bi-annual non- oil export summit.

He said “the value adding exports facility will provide stationary 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 the same abroad.”

The CBN Governor said this is because Nigeria has missed out in the foreign exchange that could be generated from the export of value added commodities.

For instance, Emefiele said Nigeria produces about 770,000MT of sesame seed, cashew and cocoa and only 12,000MT are consumed locally, while the rest are exported.

“The unfortunate thing is that out of the 758,000MT that are exported annually, only 16.8 per cent is processed. The rest are exported as raw sesame, raw cocoa and raw cashew, thereby giving Nigerian farmers an infinitesimal part of the value chain in this product,” said the CBN boss.