The Central Bank of Nigeria (CBN) has announced an expansion of its non-oil export rebate scheme to boost dollar inflows amid slumping oil production. The scheme will now be open to additional sectors, and CBN will pay naira incentives to exporters of primary goods or raw materials that repatriate dollars. The new scheme, which took effect retroactively from April 1, 2023, amends the initial scheme introduced last year, which only applied to exporters of finished and semi-finished goods.
According to a statement by the CBN, under the scheme, exporters of raw materials will receive N25 per dollar of repatriated export earnings compared to N65 per dollar paid to exporters of processed items. The scheme is part of the ‘Race to $200 billion (RT 200)’ programme, which seeks to boost export proceeds and address declining dollar inflows caused by low oil production and fleeing foreign investors.
CBN Governor, Godwin Emefiele, reviewed the impact of the implementation of the export rebate regime and noted that the scheme has made good progress since its establishment in February 2022. Available data shows that repatriation due to the programme increased by 40% from $3.0 billion in 2021 to $5.6 billion at the end of 2022.
In 2022, the CBN mobilized commercial banks to provide incentives to exporters to repatriate their earnings, and this has helped the country reverse declining dollar inflows. The expanded non-oil export rebate scheme is expected to further boost exports and help the country’s economy grow.
“We believe that this expanded scheme will provide the necessary impetus to accelerate the growth of the non-oil sector and diversify the economy,” said CBN spokesperson, Osita Nwanisobi. “This will also help to address some of the challenges facing our economy, including declining oil production and the COVID-19 pandemic’s impact on the global economy.”
The expanded scheme has been welcomed by exporters who say it will help to encourage more exports of raw materials and primary goods, thereby boosting the country’s foreign exchange earnings.
“We are pleased with this new development as it will go a long way in encouraging us to export more and earn more foreign exchange for the country,” said an exporter who preferred to remain anonymous.
The CBN’s efforts to boost exports and increase dollar inflows are seen as critical for the country’s economic growth, especially in the face of declining oil production and the impact of the COVID-19 pandemic on the global economy. The expanded non-oil export rebate scheme is expected to help the country’s economy recover and diversify, and the CBN is confident that it will achieve its target of $200 billion in export proceeds by 2025.