The ongoing conflict between
stakeholders and the Central Bank of Nigeria over the export
repatriation policy, which came into force in February 2015, has forced
some non-oil exporters to abandon the sector, while others have gone
underground to carry out informal exports, our correspondent has
gathered.
The CBN had in a circular signed by its
Director, Trade and Exchange Department, Olakanmi Gbadamosi, on February
19, 2015, mandated all authorised dealers to repatriate the proceeds of
oil and non-oil exports into the export proceeds domiciliary accounts
of the respective exporters.
The circular stipulated 90 days for the repatriation of the oil export proceeds and 180 days for non-oil export proceeds.
According to the Coordinator,
Agribusiness, Community of Agricultural Stakeholders of Nigeria, Mr.
Sotonye Anga, the policy operates in such a way that exporters remit
dollars to the government and get paid in naira at the official exchange
rate of N199/dollar.
“We pay dollars into the domiciliary
accounts and when it is time to withdraw, they pay us in naira at the
official exchange rate,” Anga said.
The exporters had immediately after it
came out opposed the policy, maintaining that it was not good for the
economy and not in tandem with the transformation agenda of the Federal
Government.
Our correspondent gathered that the situation had led to a continued drop in revenue from the non-oil sector.
According to the Nigerian Export
Promotion Council, earnings from the sector dropped by N52.2bn in the
second quarter of 2015 from N130.4bn recorded in the second quarter of
2014 (a 39.25 per cent decrease).
The CBN Governor, Mr. Godwin Emefiele,
had earlier indicated that Nigeria recorded a decline of $6.14bn
(N1.2tn) in non-oil export receipts from $10.53bn in 2014 to $4.39bn in
2015.
A director in the office of the Chief
Executive Officer, NEPC, Mr. Olajide Ibrahim, confirmed that the export
proceeds repatriation policy was having unintended effects and that the
CBN was aware that the inflow of forex into the country was at its lowest in recent times.
Anga said the reason why stakeholders
were frustrated with the policy was that while it had forced local
exporters to trade their dollars at the official exchange rate of N199;
people who were coming into Nigeria from other countries were exchanging
their dollar at the parallel market at the rate of N300 or more.
“These people (foreign buyers) buy
produce from the same market and farms as the local exporters, and they
already have advantage since they exchange their dollar for N300. Thus,
for every dollar the foreign buyer spends buying produce, the local
exporter stands to lose N101 since the produce is sold at the parallel
market rate,” he explained.
Operators said the situation was
compounded by commodity prices in the Nigerian market, which had
continued to rise even though prices in the global market were falling.
The National President, Federation of
Agricultural Commodity Associations of Nigeria, Dr. Victor Iyama, said
cocoa was currently selling at N800,000 per metric tonne or $2,900.
“Multiply that by N199 and see if the exporter is making a gain or
loss,” he said.
Iyama insisted that the government could
not grow exports with the policy, adding that the sector should be
liberalised and that exporters should be allowed unfettered access to
their earnings, adding that if the sector was liberalised, Nigeria would
be able to realise about $300bn annually from it.
“This form of restriction was in place
before former President Olusegun Obasanjo and the then CBN Governor,
Charles Soludo, abolished it and liberalised the sector in 2006. They
observed that the policy was ruining exports and the government was
losing revenue from the non-oil export sector. Prior to 2006, the inflow
of foreign exchange into non-oil export was less than $500m, but
between 2006 and 2015, it increased to about $4bn,” he said.
The Director-General, Lagos Chamber of
Commerce and Industry, Mr. Muda Yusuf, agrees with the operators and
described the policy as a disincentive to exporters.
Yusuf said there was a need to review
the policy and allow exporters unfettered access to their export
proceeds so that they could take advantage of the depreciation in the
value of the local currency to their benefit.
Asked if there was a link between the low inflow of forex
into the economy and the policy, Yusuf said the CBN’s approach to the
forex situation had created problems for everybody, including the
exporters.
“The entire approach of the CBN to the forex situation is creating problems for everybody, because the policy is not encouraging the inflow of forex,” he stated.
The Commissioner for Economic
Development, Akwa Ibom State, Dr. Emmanuel Onwioduokit, faulted the
CBN’s approach, noting that it was what was used in the 1980s, which did
not work.
Onwioduokit, who was an economic analyst
with the CBN before his appointment as a commissioner, said the country
was only going to end up losing all the money it was trying to preserve
with the kind of policies that the central bank was rolling out to
conserve forex.
The commissioner said exporters should
be allowed to buy and sell at whatever price they deemed fit since there
was a restriction on the allocation of foreign exchange to people at
the official window and since the exchange rate was unstable.
“Every other price is dictated by the
parallel market and people selling produce will always quote their
prices to reflect what is being sold at the parallel market. The
currency is not stable, you may buy something today and tomorrow when
you go back, the price has increased,” he stated.
A professor of Economics and Director,
Centre for Continuing Education, Olabisi Onabanjo University, Ago-Iwoye,
Ogun State, Sheriffdeen Tella, said nothing was wrong with the policy
as long as exporters were allowed to withdraw their money in foreign
currencies.
He added that the exporters were
complaining because there was a widening gap between the parallel market
and the official exchange rate.
Reacting, the Director, Corporate
Communications, CBN, Mr. Ibrahim Mu’azu, said, “Exports are done through
the interbank market and not through the parallel market. This is why
the exchange rate can’t be based on the parallel market rate.
“Exporters are supposed to repatriate
their proceeds through the banks that financed the exports. But there
was a time some exporters were diverting the export proceeds, rather
than repatriate them.”
But Iyama faulted Muazu’s assertion,
noting that the interbank market did not operate in farms where people
go to buy produce. “What do farmers know about the interbank market?” he
asked.
He also disagreed with the CBN
spokesperson about his claim that the exporters were supposed to
repatriate the proceeds through the banks that financed the exports,
noting that not all exporters were financed by the banks.
by Anna Okon
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