CBN Pays N23.5bn Rebates, Says RT200FX At Great Cost
The Central Bank of Nigeria (CBN) has paid a total of N23.5 billion rebates to non-oil exporters in the first half (H1) of this year towards the ‘Race to $200 billion in FX Repatriation (RT200FX) Programme’, which comes at great cost.
The CBN Governor, Godwin Emefiele, disclosed this while making a presentation at the 7th edition of the annual Zenith Bank International Trade Seminar held on Wednesday on the theme ‘Unlocking Opportunities in Nigeria’s Non-Oil Export Business’.
He said, just earlier this week, Tuesday to be precise, the apex bank authorised the payment of N20 billion as a rebate to non-oil exporters for the second quarter (Q2), adding that in April this year, CBN made the first rebate payment of N3.5 billion to non-oil exporters for Q1 under the RT200 FX Programme.
“We feel there is a need to put in place this rebate facility to encourage exporters again,” Emefiele said.
Data available with the apex bank shows that Zenith Bank received about 75 per cent of the total rebate paid in Q1 and that the bank also received above 50 per cent of the total rebate for Q2, he said, urging all the banks to join in the “revolutionary programme” of the export rebate incentive.
He said, since February this year when the programme was launched, classified data with the apex bank shows that as of June 30, the value of export has risen to $2.9 billion.
The total value of Nigerian non-oil export grew from as low as N344 billion in 2016 to about N2.14 trillion in 2021, Emefiele said, adding that “while this may seem like a laudable increase, we have to recognize that the room for improvement is just too big for us to rest on our hoax.”
The CBN governor further disclosed that, just for six months from July to December, Dangote Group would earn $650 million in Urea export.
He, however, lamented that Nigeria was not doing well compared to many other countries doing much better in non-oil trade.
Emefiele noted in particular that Vietnam, a relatively smaller country compared to Nigeria, earned about $247.72 billion from non-oil export in 2018 as against a paltry $3.3 billion Nigeria earned during the same year.
He said that a major incentive for exporters put in place by the fiscal authorities called the negotiable duty credit certificate (NDCC) could not be pulled through.
The CBN governor said, unfortunately, due to appropriation problems, it has been difficult to make those funds available for the NDCC scheme which was initially to be utilised by exporters for payment of import and excise duties.
“I am aware that most companies, both large and small, who decided to explore the opportunities of export, lost interest because they were not getting their rebate early.
“We thought not receiving those rebates early, resulted in some losses for these companies because they did factor into their pricing those rebates and we were very expectant that those rebates would come on a timely basis. Unfortunately, the rebates were not coming,” he said.
The RT200 FX Programme, Emefiele said is with a great cost for the CBN. “From the monetary authorities’ standpoints, we felt the importance of receiving export proceeds is for funding the import needs of Nigerian importers. We decided to put in place our rebates.
“But I will say at less cost to us in CBN because we feel that providing or making payment of these rebates to encourage people to embrace exports once again, and I am saying exports of non-oil products. What that does for us at the CBN is that it saves us the opportunity of beginning to look helter-skelter for dollars to allocate to banks to allocate to their customers to meet the import needs.
“So, looking at which is costless or which is more costly, for us at the CBN, we think providing dollars to the banks to sell to their customers, to me they are import needs which is ultimately the import needs of Nigeria is a more costly alternative for us.”
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