- Foreign currency repatriation to Nigeria increased by 40% due to the implementation of the RT200 FX program.
The RT200 Program was built on 5 key pillars and aims to earn US$200 billion in foreign exchange income over the next 3-5 years from non-oil income.
Despite the show’s profits, concerns and complaints have been raised regarding the show, and there is still a huge gap between FX supply and demand.
According to media reports, Central Bank of Nigeria (CBN) Governor Godwin Emefiele stated that the repatriation of foreign exchange to Nigeria increased by 40% due to the implementation of his RT200 FX program.
Emefiele pointed this out while delivering his keynote address at the RT200 Non-oil Export Summit which took place on Tuesday, May 9, 2023.
Greater repatriation of foreign currency
The CBN governor further explained that when the RT200 program started, only US$62 million was repatriated by March 2022, adding that by the second quarter (April and June 2022), the figure had risen to around US$ 600 million and for the third quarter (July to September 2022), more than US$900 million.
According to the CBN governor, the repatriation of foreign currency attributed to the RT 200 FX program increased by 40% to $5.6 billion in 2022, from $3 billion in 2021.
He also noted that the year 2023 has started strong and showing impressive prospects. In the first quarter of 2023, a total of USD 1.7 billion was repatriated into the economy, while around USD 970 million has been sold so far this year at the I&E window.
The CBN governor pointed out that the balance of the income remained in the domiciliary export accounts of the exporters. He further noted CBN’s commitment to strengthening and expanding the supply of foreign currency.
In February 2022, the CBN officially announced the launch of the RT200 FX program in an attempt to earn $200 billion in FX income over the next 3-5 years from non-oil income.
The policy offers N65 per US$1 repatriated and sold to Authorized Dealer Banks (ADB) through the investor and exporter FX window for third party use and N35 per US$1 repatriated and sold in the I&E window for “own” use. in eligible. proceedings.
Summary and challenges of the RT200 FX program
The RT200 program was based on 5 key pillars, namely the Value-Added Export Facility, the Non-Oil Commodity Expansion Facility, the Non-Oil Foreign Exchange Refund Scheme, the Dedicated Non-Oil Export Terminal and the Summit biannual non-oil export.
Despite the small gains from the program, the economy has yet to realize its benefits as the country continues to suffer from currency restrictions. In December 2022, the World Bank requested the Central Bank to reconsider the RT-200 Program despite the good intentions behind it.
Concerns and complaints about the program
According to the World Bank, the program has created an additional foreign exchange window that further worsens the nation’s currency problems.
The exporters and their agents are alleged to be involved in a scheme in which transactions are settled outside the I&E window at the parallel rate after benefiting from the RT-200 redemption, taking advantage of both the broad parallel market premium and the N65 and CBN’s N35 for US$ incentives.
Clearly, there is still a large gap between FX supply and demand, evidenced by the wide parallel market premium that remains despite more than a year of the scheme’s introduction. Our eyes are still on the Dangote refinery, which is scheduled to open on May 22, 2023.
The refinery, which has sufficient capacity to meet local demand and exports, should boost refined oil exports and support foreign exchange liquidity.