For the Race To (RT) 200 billion Export initiative of the Central Bank of Nigeria (CBN) to achieve a meaningful result, the Centre for the Promotion of Private Enterprise (CPPE) has urged the apex bank to review the current pricing regime in the Importers and Exporters [I & E] window of the foreign exchange (Forex) market.
The group, while applauding the CBN’s efforts at strengthening the supply side of the foreign exchange market, described the current pricing regime as a major impediment to the achievement of the initiative.
The CPPE’s Chief Executive Officer, Dr. Muda Yusuf, noted that a much deeper and robust I&E forex window should be in place before the CBN can contemplate a termination of its forex market interventions.
According to them, exporters are currently not encouraged to remit export proceeds at the current official rate of N416/$.
The group pointed out the current pricing regime is disincentive to investment, noting that such policy penalises exporters and is at variance with the overall objectives of the programme.
In addition, the group also stressed the need for exporters in the economy to have access to their exports proceeds.
Specifically, the group argued that the current policy regime on export proceeds is stifling as well as inhibiting export initiatives, enterprise and growth.
They stressed the need for the apex bank to relax regulations around export proceeds, as well as ensure that exporters are able to sell their proceeds at a mutually agreed exchange rate to either the banks, importers or the BDCs as the case may be.
“The apex bank should institute a willing buyer-willing seller framework for export proceeds. CBN should expand the scope of its new the foreign exchange supply strategies and incentives to cover other sources of foreign exchange inflows into the economy.
“These sources include, Foreign Direct Investments [FDI], Foreign Portfolio Investments [FPI], Diaspora Remittances, Diplomatic Missions in the country, Development Partners, Multilateral Agencies, Oil companies, International Aid agencies and Donor Agencies.
“ Inflows from these sources should be completely liberalised through a market driven I&E window. Current regulatory regime for inflows is obstructive and inhibiting. Foreign exchange generating MDAs should be encouraged to sell their Forex at the I&E window at a market reflective exchange rate.”
The group also called for an active collaboration of the fiscal and monetary authorities with regard to the initiative, stating that the fiscal authorities have much bigger roles to play in fixing the structural constraints which have been impeding non-oil export productivity and competitiveness for decades.