Says banks will source own FX from December
The Central Bank of Nigeria (CBN) is pushing a new scheme it has tagged, the ‘RT200 FX Programme’, which stands for the ‘Race to US$200 billion in FX Repatriation’, in a renewed drive for foreign exchange accretion which it hopes will see an exclusive $200 billion in foreign exchange repatriation within the next 3-5 years.
A core objective of the scheme is to enable the apex bank to actualise the goal of sustainable foreign exchange earnings with a national competitive advantage.
Godwin Emefiele, governor of the CBN and chairman of the Bankers’ Committee, disclosed this in Abuja after a Bankers’ Committee meeting on Thursday.
The CBN governor stated that the scheme will take effect immediately as stakeholders and exporters will converge for a meeting on the way forward in April. He also said the apex bank will provide concessionary and long-term loans with a 10-year tenure and 2-year moratorium for businesses interested in expanding existing plants or building new ones for the sole purpose of adding significant value to the non-oil commodities before exporting the same.
He described the RT200 FX Programme as a set of policies, plans and programmes for non-oil exports that “will enable us to attain our lofty yet attainable goal of $200 billion in FX repatriation, exclusively from non-oil exports, over the next 3-5 years,” adding that it is anchored on 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 CBN governor said: “Let me note very important that the RT200 Programme is not intended to be a silver bullet to all our problems in the export segment of the economy. Rather it is a first step meant to ensure that the CBN is better able to carry out its mandate in an effective and efficient manner, which guarantees the preservation of our scarce commonwealth, and the stability of our national currency, the Naira. It is only by boosting the productivity and earning capacity of this economy that we can truly preserve the long-term value of our currency, as well as the stability of our exchange rate.
“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 $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 to attain our lofty yet attainable goal of $200 billion in FX repatriation, exclusively from non-oil exports, over the next 3-5 years,” he said.
On a related matter, the apex bank chief said the CBN will halt the sales of FX to banks as these institutions must begin sourcing for their forex from export proceeds beginning from December 2022, hence the need to support non-oil exporters in the country. He said the decision was in line with the bank’s new commitment to boost the country’s foreign reserves through proceeds from non-oil exports.
Emefiele said: “Before or latest by the end of this year, (DMBs) will not come to the CBN for foreign exchange again. They should go and generate their export proceeds, fund people who want to generate non-oil export proceeds, when the proceeds come we will fund them at five percent for you, the proceeds will earn rebates, that is how we can help you.
“The banks don’t have a choice and I said so this morning in the meeting, I said the era where, because a bank needs $100 million foreign exchange or $200 million, they will bring the request to the CBN to fulfil, is coming to an end. But when those proceeds come, sell the proceeds to importers; don’t come to the CBN for the dollars because we will stop providing. We will stop it,” the governor said.
Meanwhile, the governor also announced that interest rates on its intervention loans, which were expected to revert to nine percent by March 1, would remain at five percent until March 1, 2023.
“Although interest rates on our various intervention facilities were expected to revert to nine percent effective March 1, 2022, we are announcing that the rates would remain at five percent for another year in view of the promising trajectory we have established in economic growth and job creation. In effect, the concessionary interest rate of five percent on our intervention facilities would now be extended until March 1, 2023,” Emefiele clarified.
On the plans to establish a dedicated non-oil export terminal to tackle the problems of port congestion and also improve operations and earnings in foreign exchange, he said the bankers’ committee will partner with state governments that have existing ports to achieve this goal, adding that the committee would provide a significant part of the funding needed for the project.