The Centre for the Promotion of Private Enterprise (CPPE) stated that the Central Bank of Nigeria (CBN) current forex regime would be an obstacle to the goal of $200 billion in FX repatriation.
This is according to a statement titled “CPPE comments on RT200 forex programme” signed by its CEO, Dr. Muda Yusuf.
According to the CBN, the RT200 seeks to attract $200 billion inflow exclusively from non-oil exports over the next three to five years. However, the CPPE believes the project is ambitious, even though the aspiration is laudable.
What the CPPE is saying about the RT200 FX program
The CPPE’s CEO. Mr Yusuf opined that the CBN’s current forex regime would make the apex bank fall short of the target set with RT200 program.
He stated that over the last couple of years, the CBN has been fixated on managing the demand side of the foreign exchange market and the outcomes have been suboptimal. He however, commends the new focus of the CBN on supply-side strategy. The reality is that supply-side policies are even more critical and impactful than demand management interventions in the foreign exchange market.
“The current pricing regime in the Importers and Exporters [I & E] window of the foreign exchange market is at variance with the objectives of the RT 200. It will be a major impediment to the achievement of the Race To $200 billion Export Proceeds Vision,” he said.
He also stated that the pricing regime penalizes the exporters and discourages remittances. He said,” Exporters are currently not encouraged to remit export proceeds at the current official rate of N416/$. It is a pricing regime that inherently penalizes exporters and it is a major demotivating factor to investment in the non-oil export sector.”
He urged the CBN to take urgent steps to ensure that the exchange rate regime in the I&E window is market reflective. “The pricing regime should be flexible and reflect the demand and supply dynamics. This is the biggest incentive that the apex bank can give to the non-oil export sector. It will be more impactful than any rebate that the CBN could be contemplating,” he added
He believes that exporters in the economy must be allowed unfettered access to their exports proceeds.
He said, “The current policy regime on export proceeds is stifling, restrictive and repressive. It is inhibiting export initiatives, enterprise and growth. Regulations around export proceeds should be immediately relaxed in the spirit of the RT 200. Exporters must be able to sell their proceeds at a mutually agreed exchange rate to either the banks, importers or the BDCs as the case may be.”
He stated that the apex bank should institute a ‘willing buyer – willing seller’ framework for export proceeds.
