CBN’s uncomplimentary trade policies killing FG’s non-oil export drive
More export stakeholders have continued to look at the frustrating policy somersaults of the Central Bank of Nigeria (CBN) in terms of terms and conditions for products exportation from Nigeria.
Many observers who spoke to our correspondent say the latest somersault will among other things impede recovery from recession.
Since October, there has been a serious drop in non-oil export business due to a policy directive change by the apex bank.
Before the end of October this year, the CBN had announced that exporters are to have unfettered access to their foreign exchange earnings – including selling to any party at any agreed price. That was good news to the exporters. But suddenly, the same CBN turned around to stipulate that they must sell their foreign exchange at N305/$1. Yet, in order to produce and export, these business entities procure the dollar at more than N400/$1.
How on earth the CBN expects an exporter to buy dollars at N420/$1 and sell earnings at N305/$1 is a mystery which only officials of the bank can unravel. Obviously, it makes no sense for two reasons.
Analysts say the sudden policy changes in the same month had started discouraging exporters from repatriating their foreign exchange earnings to Nigeria, a move watchers say will help drive down the exchange rate.
In an interview with Dr. Saidu Lawan, a financial consultant in Lagos, he said the impacts of the October somersault can be visible at ports as export activities have dropped to the lowest ebb in an economy that is in need of foreign earnings from exports.
According to him, he said “It amounts to asking the exporters to subsidise the Nigerian economy by providing dollars at a cheaper rate than they earned them”.
“Second, the measure is discriminatory as it penalises the honest exporter, while leaving those engaged in illegal and invisible trade to obtain full value for their own foreign exchange earnings.
Whereas most stakeholders in the economy, especially private sector players, have cried themselves hoarse over what they saw as general lack of economic direction by the Buhari administration, many are beginning to be shocked on certain decisions taken by the apex bank especially the change in export terms and conditions.
Another retired banker who pleaded anonymity said the economy cannot afford to keep flip-flopping, especially on the crucial foreign exchange matters, saying “CBN has come to the age of thinking through issues before going public”.
“We urge the apex bank to rescind its order to artificially peg the selling price of foreign exchange to enable exporters benefit from the fruits of their labour and begin to produce more for export,” the ex-banker noted.
