By Babajide Komolafe, Economy Editor  

Nigeria’s economy is set for another significant leap in non oil export earnings following new measures announced by the Central Bank of Nigeria, CBN   to enhance the performance   of the Race to $200 billion Non Oil Export earnings programme, RT200.

Foreign exchange inflow into the economy has always been dominated by oil and gas exports, accounting for over 80 per cent of the nation’s dollar earnings. However, this situation exposes the country to the risk of fluctuations in the price of crude oil and in fact a major culprit for the economic recession suffered by the country in 2016 and 2020.

The need to address this challenge, and widen the sources of forex inflow into the economy prompted the CBN,  in conjunction with the banks, to introduce the RT 200 programme.  

Introduced in February last   year, the RT200 comprises a set of plans, policies, and programmes designed to increase the nation’s earnings exclusively from non-oil exports to $200 billion in foreign exchange repatriation, within the next five years.    

The programme  is designed to be implemented through five anchors: Value Adding Exports Facility (VEF); Non-Oil Commodities Expansion Facility (NCEF); Non-Oil FX Rebate Scheme (NFRS); Dedicated Non-Oil Export Terminal; and the hosting of a Bi-annual Non-Oil Export Summit.

Rebate scheme

The Non-Oil FX Rebate Scheme (NFRS) was designed to incentivize exporters in the non-oil export sector to repatriate and sell their export proceeds in the local foreign exchange market and earn a rebate. Under the   scheme, the CBN   pays non oil exporters   N65 for every $1 repatriated and sold at the I & E Window to Authorised Dealers and Banks (ADBs) for other third party use, and N35 for every $1 repatriated and sold into I&E for own use on eligible transactions only.

3rd Biannual non-oil export summit

Last week, CBN, banks and stakeholders in the non-oil export value chain convened in Lagos for the 3rd edition of the  Biannual Non Oil summit, another anchor for the RT200 programme.  

The theme of the summit was “RT200: Challenges and Prospects to Success”.

In addition to the keynote speech by the CBN Governor, Mr. Godwin Emefiele, Welcome Address by the Lagos State Governor, Mr. Babajide Sanwo Olu, and a presentation by the MD/CEO InfraCorp, Lazarus Angbaso,   the summit featured two panel sessions.

The first session focussed on, “Appraising the Gains of RT 200 & Unlocking the Opportunities in Non Oil Exports”. The second session focused on, “RT 200: Challenges and Prospects to Success”. 

 

RT 200 

performance

In addition to outlining the objectives of the 3rd edition of the summit, Governor Emefiele, also highlighted the performance of the RT 200, namely 40 per cent increase in non oil export foreign exchange repatriation.  

He said: “The theme of today’s summit is “RT200: Challenges and Prospects to Success”. This theme was carefully selected to review the progress made so far, from inception of the RT200 programme in the first half of 2022 to date. This theme will equally enable us to x-ray the challenges and opportunities associated with the programme and proffer workable solutions for successful implementation of the programme for greater results going forward.

“Today,  the RT200 programme has made good progress in export proceeds since its establishment in February 2022. Available data shows that repatriation due to the programme increased by 40 percent from US$3.0 billion in 2021 to $5.6 billion at the end of 2022. The momentum for 2023 is equally showing strong numbers and impressive prospects. In the first quarter of 2023, a total of $1.7 billion was repatriated to the economy while about $790 million was sold at the I&E window year-to-date.”

Also speaking, MD/CEO Zenith Bank, Mr. Ebenezer Onyeagwu disclosed that export proceeds of N144 billion has been paid to exporters under the programme.

He said that N3.43 billion rebate was paid in first quarter of 2022, Q1’22, N20.33 billion rebate was paid in Q2’22, N40.44 billion was paid in Q3’22, N54.76 billion was paid in Q4’22 and N25.04 billion was paid in Q1’23.  

New measures

In bid to consolidate on this performance and expedite the achievement of $200 billion non-oil export earnings, the CBN Governor, while speaking at the summit announced new measures.

The measures among other things seek to widen the coverage of the rebate scheme, foster transparency in the payment of rebate  and also compel documentation of all exports. 

 

Rebate for exporters of raw materials

Responding to  concerns expressed  by some stakeholders at the summit, namely  the need for the inclusion of more players in the non-oil export sector, especially small exporters, the CBN announced that it would begin to pay rebates to exporters of unprocessed items.

While announcing this measure, Emefiele  explained that “The reason why we initially decided that we would only pay a rebate for value-added products was to encourage exporters to move from just exporting crude items. 

We wanted to create an opportunity to encourage you to set up an arrangement that processes these raw materials and creates job opportunities for our people rather than just exporting raw materials.”

He however  noted the inclusion would encourage more exporters and further strengthen the efforts of attaining the RT-200 goal but said that the rebate for unprocessed items would not be at the same rate paid for value addition or processed products.

“We should be able to give out about N30 to N35 to one dollar for unprocessed items as against the rebate of N65 to every dollar enjoyed by exporters of processed products at the importers and exporters (I&E) window”, he said.  

Rebate beneficiaries

Further, the CBN Governor, while responding to complaints   from stakeholders on lack of transparency of the beneficiary of the RT200, Emefiele said: “we would begin to advertise publicly the amount and the names of the companies that have benefited from the Rt200. We will advertise all those that benefitted from January till March and we will advertise it by next week so Nigerians can see it.”

Sanction for undocumented exports

The CBN Governor also hinted that the apex bank will soon impose sanctions on shipping lines that engage in export without documentation, namely placing a Post No Debit, PND, on their bank accounts.  

While noting that in some countries, there are strict requirements in terms of Speaking at the summit, Emefiele said: “In some countries, the period of repatriation ranges from less than six months from exportation of the product and could result in prosecution if proceeds are not repatriated on time. 

In this country it is compulsory. Whereas it is compulsion, to a little extent all we do   is to monitor and appeal to exporters and for people to export and when they do export that they should repatriate their proceeds for the good of their company and the country in general.  

“We keep hearing cases of people trying as much as possible to sidetrack the process and all I can do now is to appeal to those of us who want to export without documentation to please try as much as possible to desist from this practice.

  “We will continue to engage the Nigeria Customs, we will continue to engage Nigerian Ports Authority and we will continue to engage the shipping lines and agents to ensure that we need to nip in the bud the incidences of exporting without documentation.  

“What it does is reduce the export earning potential of the country when you do this. I had said that CBN will be beaming some searchlights on undocumented exports and we had advised the shipping lines at that meeting that we will also be monitoring and if we find that they export without documentation we will fine them by placing their accounts on PND.

“We have so far not done anything like that not because we feel that our shipping lines will be responsible to do what is right but if we do not see the kind of cooperation that we expect, I will have to insist that we do what we need to do.”

Support for exporters

In addition to the above, Emefiele reiterated the unflinching commitment   of the CBN and the banks to helping exporters   achieve their goals.

He said: “For exporters, flying the flag of Nigeria in the international market, the Bankers’ Committee and the CBN stand ready to partner with you to achieve your goals. 

You can benefit from the many financial programmes introduced by the CBN through your bank and as such grow your business exponentially.

“We are ready to break our backs for exporters to achieve this goal and that is the reason we said when we launched this programme that we have about N500 billion available for you as facilities to be able to do whatever you want to do to process your export materials. The disbursement of that facility is sub optimal.

“By being responsive to exporters we are able to source export proceeds that helps our economy, we are able to generate export proceeds that weans us away from depending on the CBN as our source of forex to meet our imports.”