RT200: Manufacturers Applaud CBN, Seek Full Cover for Parallel Market FX Rate

The Central Bank of Nigeria (CBN), says the race to $200 billion in foreign exchange repatriation (RT200) has generated over $2.9 billion as at June.

Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN) said this on the sidelines of the Monetary Policy Committee meeting on Tuesday in Lagos.

The RT200 Non-Oil Export Proceeds Repatriation Rebate Scheme aims to increase the country’s foreign reserves by 200 billion in foreign exchange earnings from non-oil proceeds over the next three to five years under a new export proceeds repatriation scheme.

However, the Manufacturers Association of Nigeria (MAN) has commended the ‘Race to $200 billion in FX (foreign exchange) Repatriation (RT200FX)’ programme of the Central Bank of Nigeria (CBN).

The group believe the rebate offered under the programe should be expanded to cover the FX rate gap between the official and parallel market.

Director General, MAN, Mr. Segun Ajayi-Kadir, took this position while speaking with Vanguard on the progress so far recorded in the program which shows that CBN paid N23.6 billion forex rebates to non-oil exporters in the first half of 2022 (H1’22).

Ajayi-Kadir stated: “Without a doubt, the CBN RT200 FX programme is a good initiative as it was designed to stimulate the growth of non-oil export in Nigeria. This comes against the backdrop of the lackluster implementation of the Export Expansion Grant.

“Having said that, we should also talk about the issue of adequacy of the RT200FX as an export incentive. The ambition is to hit $200billion in foreign exchange earnings over the next 3-5 years from non-oil proceeds. So, it is important to create a conducive and stimulating environment for scale in order to achieve the target.

“It should be noted therefore that the N65 to $1 or N35 to $1 rebate offered by CBN is not covering the FX rate gap between the official and parallel market.

“The payment of N23.6bn as rebate in H1 2022 presupposed a commendable level of repatriated export proceeds sold on the I&E window.

“On this score, we may also assume that the programme is encouraging FX inflow and sale. We should however be interested in the content of the export that earned the repatriated proceeds. Are they commodities with value addition? Are they processed or manufactured goods?

“This will enable us to answer the very important question of whether we have been able to achieve expanded job and wealth creation within the value chain of the exported products.

“So, while commending the CBN for the initiative, one may suggest an upward review of the rebate to about N100-N150 so that it can have a direct and effective bearing on the business of the beneficiary. This will stimulate further investment in export oriented production and in a way, ameliorate the high cost of forex.”

While addressing the question on the RT200 programme, Emefiele said the initiative had made so much progress, hence the increase in rebates paid.

He also added that the target of reducing the dependency of commercial banks on CBN for foreign exchange would likely come to an end before the end of the year.

“Indeed, we are delighted that the race to $200 billion is yielding good results, the RT200. Because of the data that we have so far, and I read it in the communiqué, we found out that we have received inflows as of June this year of over $2.9 billion,” he said.

“You all know that we have this morning just approved the release on payment of rebates to those who conducted export activities to the tune of N20 billion for quarter two (Q2). You can see a jump from N3.6 billion in Q1 to N20 billion in Q2.

“This is because we found out that there has been a lot of export, and those exports were found to be eligible to have rebates, which were in the tune of over $600 million and that is the reason we are paying slightly over N20 billion during the second quarter.

“We are very happy and delighted that a lot more people are embracing export in Nigeria and as a result of incentives that we are providing, the incentives that are being paid promptly, that revenue export earnings are increasing. And we had hinted that at some point, we will get to a point where the banks will not even need to come to the CBN to buy foreign exchange to meet the important needs of their customers.”

July 22, 2022