Market News

The Central Bank of Nigeria (CBN) has said that the number of exporters that are now willing to come to the formal sector is rising as the introduction of the “Race to $200 billion in FX Repatriation” (RT200 FX) has spurred significant improvement in the country’s export remittances.

The CBN introduced the RT200 policy in February this year to reduce the country’s exposure to volatile sources of foreign exchange and improved sustainable forex inflow by giving rebates to exporters who repatriate their proceeds within a specific period of time.

“We have seen significant improvement, not just in the figures that have been repatriated, but also in the number of exporters that are now willing to come to the formal sector,” Anne Nnenna Ezekhennagha, principal manager, trade and exchange department at CBN, said.

Meanwhile, the pressure on naira continued on Wednesday as Naira depreciated by 0.06 percent, after the dollar was quoted at N436.50 as against the last close of N436.25 on Tuesday, at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

The local currency has continued to depreciate across foreign exchange markets due to increased demand for dollars amid declining foreign exchange inflow into the Nigerian economy.

Other factors responsible for the naira’s free fall according to analysts include the rising strength of the dollar, import demand, oil theft, fuel subsidies, currency speculation, record high money supply and weak productivity.

Most currency dealers who participated in the foreign exchange auction on Wednesday maintained bids between N425.00 (low) and N438.00 (high) per dollar.

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The foreign exchange daily market turnover declined by 226.59 percent to $133.97 million on Wednesday compared to $41.02 million recorded on Monday.

Naira has depreciated by 73.25 percent to N714 per dollar as at Tuesday September 20, 2022, from N191 per dollar nine years ago on August 28, 2014, at the parallel market also known as the black market.

The RT200 policy seeks to raise $200 billion in the next five years in forex earnings from non-oil sources by giving N35 for every dollar repatriated through the I&E window.

Ezekhennagha said the CBN had paid rebates to exporters who have taken the opportunity of the RT200 scheme in the first two quarters of the year and will commence another series of examinations and verification exercises so that the third quarter rebates would be paid.

“A lot of our exports have been happening informally, but with this scheme, we have found that a lot more players in the export sector are willing to come to the formal sector.” she asserted.

She added that there has also been a significant increase in the number of commodities that are exporters from Nigeria, saying for instance, regarding “The solid minerals, we are seeing more and more players in that sector coming into the formal sector to report their exports and participate in the RT200 FX scheme. So, I would say it has been very successful so far.”

Meanwhile, an assistant director at the Nigeria Shippers Council (NSC), Adaora Nwonu, has stressed the need to fast-track the full automation of the country’s ports, explaining that this is crucial to boost its export.

She maintained that the cumbersome manual processing of export documents has been negatively impacting Nigeria’s export, thereby inhibiting its forex inflow from non-oil exports.

Tayo Omioji, head, of strategy and communication, Nigeria Export-import Bank (NEXIM), disclosed that plans are in the advanced stage to float a regional shipping line to address the challenges associated with relying on foreign ships.

As one of the panellists at the occasion, Omioji noted, “In order to have an efficient port operation, there has to be a regional shipping/carrier so that we do not continue to rely on foreign ones. Hence, the need for us to have our own shipping line. That is why we are working on our own shipping line called the Sealink project.