In an apparent move to bolster the nation’s economy, the Central Bank of Nigeria (CBN) in collaboration with the Bankers’ Committee has unveiled an initiative known as “Race to US$200 billion in FX Repatriation”.
CBN Governor, Mr. Godwin Emefiele announced the programme while briefing newsmen shortly after the 364th Bankers’ Committee meeting, Thursday, February 10, 2022 in Abuja.
He said, after careful consideration of the available options and wide consultation with the Banking Community, the RT200 FX Programme was launched as a set of policies, plans and programmes for non-oil exports that would enable the country attain lofty yet attainable goal of US$200 billion in FX repatriation, exclusively from non-oil
exports, over the next 3-5 years.
Emefiele said, the RT200 Programme would have five (5) key anchors, which he gave as: 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 apex bank boss explicated that the Value-Adding Export Facility would 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 same.
Citing example, he said, “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.
“For example, the global chocolate industry is valued at about US$130 billion. Of this amount, Cote D’Ivoire, Ghana and Nigeria account for
more than 72 percent of global cocoa exports. Yet, because we mainly export raw cocoa beans, Cote D’Ivoire gets US$3.6 billion annually, Ghana generates US$1.9 billion annually and Nigeria gets about US$804
million per year from an industry that is worth over US$130 billion.
“In contrast to West African countries, Belgium accounted for 11 percent of global chocolate exports in 2019, at a value of US$3.16 billion. Similarly, Germany’s chocolate exports were worth US$5.14 billion in the same year. These numbers are the same for other commodities as well.
“Therefore, given these alarming disparities between exporters of raw commodities and exporters of semi-finished or finished products, we believe that the Value-Adding Export Facility is a first step to getting back some of these foreign exchange that we rightly deserve”,
The governor also announced the introduction of the 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. Although this rebate programe is with immediate effect, the detailed guideline of this scheme will be communicated next week”, he said.
On the perennial problems of port congestion cited by exporters as a major impediment to improved operations and foreign exchange earnings, he said, the bank has designed a third anchor of the RT200 Programme, which is the construction/establishment of a Dedicated Non-Oil Export Terminal.
“According to the African Centre for Supply Chain Practitioners, Nigeria loses about US$14.2 billion annually due to congestion at our ports. Paraphrasing from an article by the Financial Times in December 2020, the congestion has become so bad that while it costs US$3,500 to ship a 40-feet container from China to Lagos, which is a distance of
22,000 kilometers, it costs US$4,000 to move the same container from the port to mainland Lagos, a distance of only 12 kilometres.
“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.
“Over the next three months, the Bankers Committee will be collecting.and analyzing detailed proposals from interested State Governments in order to decide which one we can partner with.
“We believe that this dedicated port will be 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.
“Let me emphasize that under this arrangement, loans to companies wishing to expand or build new plants that will generate verifiable export proceeds for the economy shall remain at 5 percent per annum for 10 years loans inclusive of 2 years moratorium”, he said.
Emefiele said, there would be a Biannual Non-Oil Export Summit, the first of which would be organized during the first week of April 2022.
“This Summit will bring together all the relevant stakeholders in the export business including bankers, customs officials, the Nigerian
Ports Authority, the Nigerian Export Promotion Council, clearing agents, cargo airlines, shipping lines, logistics companies, insurance
practitioners, etc. I believe that the ideas harnessed from such summits would be invaluable in helping us reach our ultimate goal of US$200 billion in non-oil exports per annum”, he said.