CBN Governor, Godwin Emefiele The Central Bank of Nigeria (CBN) has published the implementation guidelines for the ‘RT200 FX’ pro
The Central Bank of Nigeria (CBN) has published the implementation guidelines for the ‘RT200 FX’ programme it unveiled on February 10, 2021. The ‘RT200 FX’ stands for the “Race to $200 billion in Forex Repatriation.” It constitutes a blueprint that will enable Nigeria to attain the sky-high goal of $200 billion repatriation, exclusively from non-oil exports over the next three to five years.
The Bankers’ Committee created the scheme to ultimately address the knotty challenge of liquidity in the foreign exchange market, which is the root cause of the dwindling fortune of the naira. The CBN Governor, Godwin Emefiele, had disclosed at a special briefing in Abuja that the initiative followed a careful consideration of the available options and wide consultation with the banking community.
He made reference to the African Centre for Supply Chain Practitioners’ report that Nigeria loses about $14.2 billion annually due to congestion at our ports. He also cited a Financial Times report in December 2020, which revealed that the congestion had become so bad that while it costs $3,500 to ship a 40-feet container from China to Lagos, which is a distance of 22,000 kilometers, it costs $4,000 to move the same container from the port to mainland Lagos, a distance of only 12 kilometres.
Emefiele stated the obvious. There are myriads of issues impacting negatively on the export trade at Nigerian ports. Those in commodity export have sad stories to tell. Besides the hurdles of importing into the country, more complicated roadblocks have been mounted by government agencies in the form of extortions, harassment and multiple charges on export goods, causing international cargo airlines to prefer flying out of Nigeria empty.
Cargo agencies explain that among the 16 sundry charges tracked for goods coming in or departing the country via airports, only five are officially recognised. The chaotic situation of our ports, especially in Lagos, remains a threat to the non-oil revenue drive. The implication includes at least $250 billion loss on agro-export produce to the country. This constitutes a huge constraint in export business.
If Nigeria is to attain the sum of $200 billion in non-oil exports, this problem cannot be wished away. It must be confronted head-on and appropriate solutions provided.
We commend the Bankers’ Committee for this worthy and timely initiative. We also applaud the practical approach adopted in the planned implementation as exemplified in the action steps articulated by Emefiele:
“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 analysing detailed proposals from interested State Governments in order to decide which one we can partner with. The Bankers Committee will be arranging a significant part of the financing that will be needed for this port while the selected State Government will have responsibilities that will be spelt out in due course.”
We urge the CBN to give the scheme all it takes to succeed. The promoters should adopt an aggressive campaign for effective awareness. At a time the drum beats of politics have begun to sway the Nigerian political atmosphere, politicians and their ilk should be kept away from the scheme. There should be a defined boundary between governors and the scheme, especially in the aspect of developing redundant or potential sea ports in their territories.
The scheme must not suffer the fate of the CBN Commercial Agricultural Credit Scheme which some governors allegedly meddled with and frustrated the implementation in their states. This is why ‘RT200 FX’ must be separated from politics.
It is important to stress that no project, no matter how lofty, can fly where the enabling environment is lacking. The ‘RT200 FX’ might not succeed under the unbearable weight of the existing order, so the operators must be determined to do things differently. Subjecting exporters to the pains of multiple taxes and exposing them to the excesses of crude revenue collectors is a sore thumb to excise from the system.
For businesses to engage in finished or semi-finished products, there must be adequate electricity supply. The electricity sub-sector is going through fundamental reform through legislation and policies. The ‘RT200 FX’ should tap into the opportunities the process provides. The wide margin between the official and parallel exchange rates is a disincentive to the repatriation of export proceeds. We believe that appropriate economic imperatives will be adopted to permanently resolve this monetary policy quagmire.
The ‘RT200 FX’ scheme has a Biannual Non-Oil Export Summit as one of its implementation anchors, the first of which would be organised during the first week of April 2022. The forum should be a problem-solving event to discuss the issues, challenges and opportunities in this segment of the economy. The recommendations should be put into use.
The pronouncement that “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.” is encouraging, but must not share neighbourhood with mere rhetoric.
We therefore believe that “This gathering will be one where for every complaint, problem, issue, challenge or difficulty that is presented or identified, there will be one or several agencies or practitioners that can articulate options for solving that problem”, as Emefiele promised.
We see the RT200 FX as one great window of opportunities to harness the countless openings that exist in the export value chain towards building a sustainable economy that creates hope for the realisation of the lofty objectives of the scheme. The imperatives of its successful execution cannot be overstated.
thewillnigeria.com