The Central Bank of Nigeria (CBN) on Friday released guidelines for the implementation of the RT200 (Race to US$200 billion in FX Repatriation) Non-oil Export Rebate Scheme with immediate effect.
The scheme is in furtherance of the apex bank’s effort to reduce exposure to volatile sources of foreign exchange and to earn more stable inflows.
Under the new framework, the CBN is offering N65 for every $1 repatriated and sold at the I&E Window to Authorised Dealers and Banks (ADBs) for other third party use and $35 for every $1 repatriated and sold at the I&E Window for own use on eligible transactions only.
The bank added that payment of incentive shall be made on quarterly basis.
It said the accounts of exporters that qualify for rebates shall be credited latest one week after the end of the quarter.
This was contained in the CBN circular titled, Operating Guidelines for RT200 Non-oil Export Rebate Scheme, signed by Director, Trade and Exchange Department, Dr. O.S. Nnaji, and directed to all ADBs and the public.
CBN Governor, Mr. Godwin Emefiele, had earlier this month announced a new programme to stimulate the country’s non-oil exports segment and achieve $200 billion repatriation of proceeds between three and five years.
Emefiele said the scheme, code-named, “Race to US$200 billion in FX Repatriation (RT200 FX Programme)”, which takes immediate effect, consisted of a set of policies, plans and programmes for non-oil exports which would help the country attain its goal of $200 billion in FX repatriation, exclusively from non-oil exports transactions over the next three to five years.
The rebate scheme is designed to incentivise exporters in the non-oil export sector to encourage repatriation and sale of export proceeds into the FX market.
It is born out of the need to develop new strategies aimed at earning more stable and sustainable inflows of FX in order to insulate the Nigerian economy from shocks and FX shortages.
The rebate is further limited to only exporters of finished and semi-finished goods wholly or partly processed or manufactured in Nigeria, except otherwise stated by the CBN, the circular added.
Emefiele had, at the end of the 364th meeting of the Bankers’ Committee in Abuja, explained that the new non-oil export initiative would have five key anchors namely value-adding exports facility; Non-oil commodities expansion facility; Non-oil FX rebate scheme; Dedicated non-oil export terminal, as well as biannual non-oil export summit.
Essentially, he said the new FX drive was informed by the inadequacy of FX supply and constant pressure on the exchange rate, pointing out that the country’s four major sources of FX inflow, namely proceeds from oil exports, proceeds from non-oil exports, diaspora remittances, and foreign direct/portfolio investments had been constrained by the COVID-19 pandemic.
He said, “I believe that the lessons we have learnt from our policies on remittances can be applied in improving some aspects of FX inflow into the country.”
Emefiele further argued that most of the sources of FX inflows were unreliable and perennially prone to exogenous vicissitudes of global economic developments.
He said, “For example, we have all been witnesses to the ever-changing fortunes of oil-exporting countries. Even those that have been reputed to manage their oil proceeds well also suffer from major shocks once oil prices plummet.
“In order to avoid these sudden adjustments to our economic life, we need to focus on strategies that can help us earn more stable and sustainable inflows of foreign exchange. We would need to follow the best practices of other countries and ensure that we protect ourselves a little bit from factors that are beyond our immediate control.”
James Emejo in Abuja