FSDH Merchant Bank has embarked on programmes that would enhance Foreign Exchange (FX) inflow into the through sensitisation of stakeholders on the latest policy of the Central Bank of Nigeria (CBN) known as RT 200 Policy.
The CBN RT 200 policy is an attempt by the apex bank to provide a significant incentive for Nigeria to achieve its objective of US$200 billion in foreign exchange repatriation from non-oil exports over the next 3-5 years.
Bukola Smith, managing director/CEO, FSDH Merchant Bank, said that there is a need to develop new strategies getting more stable and sustainable inflows of FX into the country. According to her, the major challenge in the Nigerian export chain is the unstructured procedures that cause delays, corruption and rejection of the country’s exports as a result of their low quality.
Speaking at the bank’s exclusive breakfast meeting with the theme, ‘CBN RT 200 Policy: Implication for Export Trade’, she said, the CBN RT 200 policy requires critical export infrastructure, financial trade diplomacy and adequate funding for it to succeed. According to her, export of unprocessed commodities is largely responsible for Nigeria’s low earnings from non-oil exports.
She however advised that the country can also target products for which Nigeria has the capacity and advantage to earn more forex; by focusing on the export of finished goods from commodities such as sesame seed, cashew, cocoa where Nigeria has some comparative advantage.
“The confidence we have is that our services can help the economy grow on a considerable scale and we’ll keep working to maintain this momentum,” Smith said.
As the volatile nature of the foreign exchange availability in the economy continue to expose Nigerian businesses, analysts present at the event urged the CBN and the Federal Government to come up with more policies seen at giving foreign investors more confidence that there will not be policy flip-flops, on the back of the country’s structural deficiency in the economy, which have affected the cost of living.
However, import/export trade analyst, Bamidele Ayemibo, lead consultant, 3T Impex Consulting Limited, sees more inflation as politicking gets tougher ahead of 2023 because politicians are likely to demand for more forex.
The author of the book, “Built to go Global”, said that the book was written as a response to the challenges of businesses from around the world that desire to go global, but are unable to realize their dream because of difficulty caused by barriers in internationalization.
“If they are import/export trade, particularly on the export side; they are better off generating their foreign exchange themselves. If they don’t generate their foreign exchange themselves, it will be very tough because the rate will really go up,” he said.
According to him, businesses can hedge against the uncertainty in the forex market by increasing their import demands to get more raw materials ahead of time.
“The only way is to prepare for it; if you don’t prepare for it, it will get worse. There is a high level of dropout in Nigeria export trade,” Ayemibo said.