BY BAMIDELE FAMOOFO
The Central Bank of Nigeria said it has concluded plans to boost foreign exchange earnings through non-oil export to $200billion yearly.
Godwin Emefiele, Governor of Nigeria’s Central Bank made the disclosure after the February Bankers’ Committee held in Abuja.
“After careful consideration of the available options and wide consultation with the Banking Community, the CBN is, effective immediately, announcing the Bankers’ Committee “RT200 FX Programme”, which stands for the “Race to US$200 billion in FX Repatriation”. The RT200 FX Programme is a set of policies, plans and programmes for non-oil exports that 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,” Emefiele disclosed.
According to him, the RT200 programme will operate on five key parameters which are Value-Adding Exports Facility, Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme, Dedicated Non-Oil Export Terminal and Biannual Non-Oil Export Summit.
The Value-Adding Export Facility will provide concessionary and long-term funding for businesspeople 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.
“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. The rest are exported as raw sesame, raw cashew, and raw cocoa, thereby giving Nigerian farmers an infinitesimal part of the value chain in these products.”
According to CBN, the Non-Oil Commodities Expansion Facility 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.”
Part of the plan is the introduction of a 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 Bank said it has designed a third anchor of the RT200 Programme, which is the construction/establishment of a Dedicated Non-Oil Export Terminal.
Emefiele noted, “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.”
The Bank said that the dedicated port is capable of creating over 100,000 direct and indirect jobs and would provide a huge boost to our quest for significant improvement in non-oil export earnings in Nigeria. Under the RT200 programme arrangement, loans to companies wishing to expand or build new plants that will generate verifiable export proceeds for the economy will be 5% per annum for 10 years loans inclusive of 2 years moratorium.
