Non-oil exports to spike, as CBN gives exporters free hand on FX

Non-oil exports from Africa’s largest economy may be well on the path of soaring, following the decision of the Central Bank of Nigeria (CBN) to allow exporters sell their export proceeds at the rate they choose.

“Exporters will now be allowed to sell their export proceeds in the interbank market at the ruling rate,” said Godwin Emefiele, the CBN governor, as he announced the foreign exchange market guidelines today.

The value of non-oil exports in the first three months of 2016 was outmuscled by oil exports which accounted for 64.7 percent (N821.9 billion), thus dimming the prospects of economic diversification from oil.

Analysts told BusinessDay that the volume of exports had significantly dipped due to the FX policy in Africa’s largest economy, which was short-changing exporters and wiping out any incentive to export.

However, they say the FX policy shift, which will no longer subject the proceeds of exporters to the N199 official rate, will resuscitate non-oil exports and generate more revenue for the country.

“You can expect a correspondent increase in export volume following the CBN’s decision,” said Sheriff Balogun, president of Nigeria America chamber of commerce, in response to questions.

Further details in the paper tomorrow.

 

JOSEPHINE OKOJIE and LOLADE AKINMURELE