Article summary
- Foreign exchange repatriation into Nigeria increased by 40% due to the implementation of the RT200 FX programme.
The RT200 Programme was founded on 5 key anchors and aims to get US$200 billion in Foreign Exchange earnings over the next 3-5 years from non-oil proceeds.
Despite the program’s gains, concerns and allegations have been made regarding the program, and there is still a huge gap between the supply of FX and its demand.
According to newspaper reports, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, stated that foreign exchange repatriation into Nigeria increased by 40% due to the implementation of its RT200 FX programme.
Emefiele noted this while delivering his keynote address at the RT200 non-oil export summit which was held on Tuesday, 9 May 2023.
Increased foreign exchange repatriation
The CBN Governor further explained that when the RT200 programme was started, only US$62 million was repatriated by March 2022, adding that by the second quarter (April and June 2022), the figure had risen to about US$600 million and by the third quarter (July to September 2022), over US$900 million.
According to the CBN governor, foreign exchange repatriation attributed to the RT 200 FX programme increased by 40% to US$ 5.6 billion 2022.from US$3.0 billion in 2021.
He also noted that the year 2023 has started strongly and showing impressive prospects. In the first quarter of 2023, a total of US$1.7 billion was repatriated to the economy while about US$970 million was sold at the I&E window year-to-date.
The CBN governor noted that the balance of the proceeds remained in the Export Domiciliary Accounts of exporters. He further noted CBN’s commitment to strengthening and expanding foreign exchange supply.
In February 2022, the CBN officially announced the launching of the RT200 FX Programme in a bid to get US$200 billion in Foreign Exchange earnings over the next 3-5 years from non-oil proceeds.
The policy offers N65 for every US$1 repatriated and sold to Authorised Dealer Banks (ADBs) through the Investors & Exporters FX window for third-party use and N35 for every US$1 repatriated and sold into the I&E window for “own” use on eligible transactions.
RT200 FX Program overview and challenges
The RT200 Programme was founded on 5 key anchors namely, Value-Adding Exports Facility, Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme, Dedicated Non-Oil Export Terminal and Biannual Non-Oil Export Summit.
Despite the program’s little gains, the economy has yet to realize its benefits as the country continues to suffer FX constraints. In December 2022, the World Bank asked the Central Bank to reconsider the RT-200 Programme despite the good intentions behind it.
Concerns and allegations surrounding the program
According to the World Bank, the program has created an additional foreign exchange window further worsening the nation’s FX problems.
Exporters and their agents are alleged to be involved in a scheme where transactions are settled outside the I&E window at the parallel rate after benefiting from the RT-200 rebate, taking advantage of both the wide parallel market premium and the CBN’s N65 and N35 per US$ incentives.
Clearly there is still a huge gap between the supply of FX and its demand which is evidenced by the wide parallel market premium that remains despite over a year of the scheme’s introduction. Our eyes remain on the Dangote refinery scheduled to be launched on 22 May 2023.
The refinery, which has sufficient capacity to meet local demand and exports, should boost refined petroleum exports and support FX liquidity.