Following the introduction of the RT200 forex initiative, the Central Bank of Nigeria (CBN) has said Nigeria’s exporters realised a combined $3.5 billion in two months.
Godwin Emefiele, the governor of the CBN, disclosed this on Thursday at the RT200 non-oil export summit organised by the apex bank.
The foreign exchange repatriation was realised in April 2022, just two months after the official launch of the program on February 10, 2022.
On February 25, CBN introduced the RT200 non-oil export proceeds repatriation rebate scheme to incentivize exporters in the non-oil sector to encourage repatriation and sale of export proceeds into the foreign exchange market.
This, the apex bank said was necessary to stabilise and sustain inflows of foreign exchange in order to protect the economy against external shock and forex shortages. The scheme pays N65 for every US$1 repatriated and exchanged at the Investors and Exporters forex window to Authorised Dealer Banks (ADB) for other third-party use.
CBN promised to pay N35 for every US$1 repatriated and sold into I&E Window for own use.
According to the bank boss, exporters that repatriated the $3.5 billion have received over N3.5 billion in rebates under the scheme.
Emefiele, therefore, urges players in the non-oil space to work together with ADB to ensure improved export operations that will result in foreign exchange inflows into Nigeria.
The main reason the apex bank introduced the rebate scheme was to discourage black-market patronage and stabilise the nation’s forex market by ensuring forex transactions are performed at the apex bank’s regulated rates.
For instance, the Naira was sold at N415.79 for a United States Dollar by the CBN for onward sale to customers at N416.79. However, black markets across the country are selling dollars between N610 to N610 and buying at N585, against the N415.79 stipulated by the CBN. Hence, why the CBN introduced the rebate to halt some of the supplies going into the black market and gradually converge the nation’s foreign exchange rate.
Nigeria’s Petrol Imports Decrease by 1 Billion Litres Following Subsidy Removal
Nigeria’s monthly petrol imports declined by approximately 1 billion litres following the fuel subsidy removal by President Bola Ahmed Tinubu, the National Bureau of Statistics (NBS) reported.
The NBS findings illuminate the tangible effects of this policy shift on the country’s petroleum importation dynamics.
Prior to the subsidy removal, the NBS report delineated a consistent pattern of petrol imports with quantities ranging between 1.91 billion and 2.29 billion litres from March to May 2023.
However, in the aftermath of Tinubu’s decision, the nation witnessed a notable downturn in petrol imports, with figures plummeting to 1.64 billion litres in June, the first post-subsidy month.
This downward trend persisted in subsequent months, with July recording a further reduction to 1.45 billion litres and August witnessing a significant decline to 1.09 billion litres.
August’s import figures represented a decrease of over 1 billion litres compared to the corresponding period in 2022.
The NBS report underscores the pivotal role of the subsidy removal in reshaping Nigeria’s petrol import landscape with the Nigerian National Petroleum Company emerging as the sole importer of fuel in the current scenario.
Despite higher petrol imports in the first half of 2023 compared to the previous year, the decline in June, July, and August underscores the profound impact of subsidy removal on import dynamics, affirming the NBS’s latest findings.
Independent Oil Marketers Urge Direct Supply from NNPCL to Lower Fuel Prices
Independent oil marketers are advocating for direct supply of premium motor spirit (PMS) from the Nigerian National Petroleum Company Limited (NNPCL) as a means to alleviate the burden of high fuel prices on consumers.
Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stressed the need for independent marketers to access PMS directly from NNPCL, highlighting the potential for reduced costs if this supply chain is established.
Maigandi revealed that the major challenge facing independent oil marketers is the lack of direct supply from NNPCL.
Currently, they purchase fuel from private depot owners at higher rates, which inevitably leads to inflated prices for consumers.
He explained that while NNPCL sells PMS to private depot owners at N557 per litre, independent marketers end up buying from third parties at N630 per litre.
These additional costs, including transportation and bank charges, contribute to the high retail prices faced by consumers, often exceeding N650 per litre.
The IPMAN president emphasized that if independent marketers could secure direct supply from NNPCL, they would be able to sell PMS at more affordable rates, potentially even below the NNPCL retail price.
He highlighted the significant market share held by independent marketers, covering 80% of retail outlets across Nigeria, and stressed the importance of their role in providing fuel to both urban and rural areas.
Maigandi stated that the association has raised its concerns with the Federal Government, urging authorities to address the challenges faced by independent marketers.
He emphasized that direct supply from NNPCL would not only benefit consumers by lowering fuel prices but also ensure fairer access to petroleum products across the country.
Nigeria Mulls National Commodity Board to Tackle Food Price Volatility
Nigeria is considering the establishment of a National Commodity Board aimed at mitigating the escalating food inflation that has been a concern for the nation.
Vice President Kashim Shettima disclosed this during a high-level strategic meeting on climate change, food systems, and resource mobilization held at the Banquet Hall of the Presidential Villa in Abuja.
Shettima highlighted that the proposed board would play a pivotal role in assessing and regulating food prices, as well as maintaining a strategic food reserve to stabilize prices of essential grains and other food items.
This initiative underscores the government’s commitment to addressing the challenges posed by price volatility in the food market.
In his address titled “Climate Resilience and Food Security: Nigeria’s Vision for the Future,” Shettima underscored food security as a top priority for the administration.
He outlined both immediate and long-term strategies to tackle potential food crises, including the distribution of fertilizers and grains to farmers and households, fostering collaboration between the Ministry of Agriculture and the Ministry of Water Resources for efficient farmland irrigation, and establishing a National Commodity Board to address price fluctuations.
Also, Shettima assured participants of the government’s efforts to restore degraded lands, engage security architecture to protect farmers, and activate land banks to increase arable land for farming.
He stressed collaboration with mechanization companies and the Central Bank of Nigeria in funding the agricultural value chain to ensure food availability and affordability, thus contributing to Nigeria’s Human Capital Index improvement and job creation within the agriculture sector.
The proposal for a National Commodity Board reflects Nigeria’s commitment to enhancing food security and fostering economic stability amid evolving challenges.
As discussions progress, stakeholders await further details on the implementation and effectiveness of this proposed initiative.
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