From $3bn to zero, FX earnings into reserves dries up – Emefiele 

The official foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above US$3.0 billion monthly in 2014 to an absolute zero dollars today, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) said weekend.

He disclosed this at the 57th annual bankers dinner organized by the Chartered Institute of bankers of Nigeria (CIBN) in Lagos at the weekend.

He noted that the Nigerian foreign exchange market is in the middle of a serious crunch which are straining the reserves and stifling the value of the naira.

Market demand for both goods and invisible transactions has continued to increase under various uses in the face of dwindling supply of foreign exchange.

According to him, the number of student visa issued to Nigerians by the UK alone has increased from an annual average of about 8,000 visas as of 2020 to nearly 66,000 in 2022, which implies an eight-folds surge to about US$2.5 billion annually in study-related foreign exchange outflow to the UK alone.

It is against the backdrop of the worsening mismatch between foreign exchange market demand and supply, and the need to boost foreign exchange earnings that the CBN and the Bankers’ Committee initiated the RT200 programme in February 2022, he said.

The programme, he said was fundamentally devised to innovatively tackle the fundamental problem associated with the repatriation of non-oil export proceeds.

“So far, we have recorded and continue to record resounding success with the RT200 Programme.”

Inflows through the programme in 2022 rose to about US$1.6 billion and he said it could surpass US$2.5 billion by year-end.

“Under the rebate scheme of the programme, the Bank has reimbursed a total of N78.4 billion naira, which I consider a fair price to incur to stabilise our foreign exchange market,” Emefiele said.

Prior to the RT200 programme, the CBN had also rolled out several initiatives to bolster the inflow of foreign exchange into Nigeria in a stable and sustainable manner.

 

One of these was the Naira-4-Dollar scheme, which reflects the CBN’s efforts to boost migrant remittances into the Nigeria economy.

 

Read also: Explainer: Why Nigeria’s foreign reserves remain under pressure?

“I am happy to note that, so far, the Naira-for-Dollar scheme has been successful in increasing remittance inflows through our registered International Money Transfer Organization (IMTOs),” he said.

 

On the National Domestic Card Scheme (NDCS), he said this is expected to lower operating costs for banks incurring huge charges for foreign card schemes. It will also reduce the huge foreign exchange commitments associated with operating foreign card schemes.

 

The scheme is expected to commence on January 16, 2023, he disclosed, adding that with this, Nigeria will join a growing list of Emerging Markets and Developing Economies (EMDEs), including India, Turkey, China, and Brazil that have launched domestic card schemes.

On eNaira, he said so far, a total of N8 billion, consisting over 700,000 transactions, has passed through the eNaira platform.

In his welcome address, Ken Opara, president and chairman of council, CIBN, said annual Bankers’ Dinner is an event where stakeholders of the banking community (the regulators, operators, government, customers, and the business society) are afforded the opportunity to let their hair down and network in a more informal setting.

He explained that it also provides a platform to reflect on the developments in the banking industry and economy over the past year while gaining economic insights for the year to come.