Industrialists across the country, under the auspices of the Lagos Chamber of Commerce and Industry (LCCI) have charged the Central Bank of Nigeria (CBN) to review its policy on repatriation of export proceeds with a view to allowing exporters have free and unfettered access to their export proceeds.
Speaking on behalf of industrialists at the quarterly workshop of Association of Business Editors in Nigeria(ABEN) held over the weekend in Lagos, the director-general, LCCI, Dr. Muda Yusuf, urged the apex bank to reevaluate its foreign exchange policy on the repatriation of export proceeds so as to drive non-oil exports.
The policy as it stands, he said, has given room for sharp practices and corruption in export documentation processes, with most exporters avoiding filling the Nigerian Export Proceeds Form (NXP), otherwise known as ‘Form NXP.’
Yusuf, who spoke on the theme of the workshop: “Strengthening Economic Recovery in a Pandemic through Aggressive Non-Oil Export Drive: Prospects and Challenges.” said, one of the problems hindering non-oil export was CBN’s policy that disallows exporters from having free and unfettered access to their export proceeds.
“You get your export proceeds and the CBN will be telling you that this is the exchange rate that they will need to convert your proceeds for you. It’s not fair. You are the owner of your money; you are the one that exported. If they cannot give you your dollar directly, then, they should allow you negotiate the rate at which you sell the dollar rather than impose conversion rates on you,” Yusuf charged.
The CBN has a policy that requires exporters to repatriate their proceeds. The policy has been in operation since the deregulation of the foreign exchange market in 1986.The CBN only dust up the policy through embargo on access to foreign exchange on exporters who fail to repatriate their proceeds when ever there is foreign exchange crunch.
By this policy, CBN requires exporters to repatriate export proceeds within 90 days for oil and gas and 180 days for non-oil exports in a bid to stem capital flight through exports.
Yusuf lamented that the current policy now is that once export proceed comes, it has to be exchanged at the Investors’ and Exporters’ (I&E) window, which is about N410/$ or thereabout, while the open market rate is about N480/$.
“Look at the difference and we said we want to encourage non-oil export? Is that not a deliberate disincentive?” Yusuf queried.
The LCCI chief, therefore, canvassed that the kind of policy the CBN has done to support Nigerians in the Diaspora should be extended to exporters.
He said some exporters decided to go to neighbouring countries such as Republic of Benin (Cotonou) and export from there, lamenting that crossing the borders to export because of policies meant the Nigerian economy was losing.
Delivering a paper on ‘Financing Nigerian Non-Oil Exporters to Penetrate Global Markets in a Pandemic,’ at the event, the head, strategic planning, Nigerian Export–Import Bank (NEXIM), Mr Tayo Omidiji, said NEXIM’s objective was to implement initiatives aimed at mitigating the impact of the pandemic on the non-oil export sector.
He said the bank’s focus was geared towards increasing the number of products in the nation’s export basket, while also increasing the number of export destinations, particularly within the context of the African Continental Free Trade Agreement.