The Central Bank of Nigeria (CBN) has established the RT200 FX Program, which aims to boost foreign currency revenues.
Mr.Godwin Emefiele unveiled the initiative, which stands for “Race to US$@00 billion in FX Repatriation,” on Thursday during the CBN Governor's Post-Bankers Committee news briefing in Abuja.
According to Emefiele, the scheme was implemented after careful consideration of the available options and extensive consultations with the banking community, in order to consolidate the gains of the various initiatives launched about two years ago to protect the economy from collapsing due to the COVID-19 pandemic.
He stressed the need for Nigeria to look beyond oil and focus on the immense potential that might sustain the economy, produce jobs, and expand the market for non-oil exports worth $200 billion in foreign exchange repatriation within three to five years.
“The RT200 FX Program is a collection of policies, strategies, and programs for non-oil exports that will enable us to achieve our lofty, yet doable, aim of US$200 billion in FX repatriation from non-oil exports over the next 3-5 years,” Emefiele added.
He stated that the RT200 Program will flourish on five essential anchors, namely the Value-Adding Exports Facility, Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme, and Non-Oil FX Rebate Scheme.
“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 them,” Emefiele said, expanding on the kernels of the five anchor-areas.
“This is significant since the export of raw, unprocessed goods does not generate a lot of foreign cash.” Today, Nigeria produces around 770,000 metric tons of sesame, cashew, and cocoa.
“Of this total, around 12,000 metric tonnes are eaten domestically, with the remaining 758,000 metric tons exported.” The terrible issue is that just 16.8 percent of the 758,000 metric tonnes shipped each year is processed.
Emefiele stated that the second anchor, the Non-Oil Commodities Expansion Facility, will likewise be a concessionary facility meant to dramatically increase local production of exportable commodities.
“The purpose of this facility will be to ensure that larger and new factories supported by the Value-Adding Facility do not run out of raw commodity inputs throughout the course of their production cycle.”
“A considerable increase in the supply of such items will also help dampen/moderate their prices, ensuring that the anticipated increase in demand for them does not create a pressure point for market aggregate prices.”
“Today, we also announce the Non-Oil FX Rebate Program, an unique local currency rebate scheme for non-oil exporters of semi-finished and completed goods who demonstrate verifiable documentation of export revenue repatriation, sold straight into the I & E window to increase market liquidity.”
“As with the Naira4Dollar Scheme, which has helped increase remittances from $6 million per week to over $100 million per week, we will establish the modalities for granting a rebate for each dollar of non-oil export proceeds that an exporter sells into the market for the benefit of other FX users rather than for funding its own operations.”
“ The third component, the RT 200 FX Program, has established the construction/establishment of a Dedicated Non-Oil Export Terminal in recognition of the ongoing issues of port congestion, which exporters regard as a major impediment to improved operations and foreign currency income.”
“According to the African Centre for Supply Chain Practitioners, Nigeria loses around US$14.2 billion per year due to port congestion.”
“If we are to meet our target of $200 billion in non-oil exports, we cannot ignore or wish away this challenge.”
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