Early in the year, the Central Bank of Nigeria (CBN) banned erring exporters from having access to banking services for failure to repatriate their export proceeds.
The ban was to enforce the foreign exchange (FX) proceed repatriation process which is 90 days for oil export and 180 days for non-oil exports.
Muda Yusuf, immediate past director-general of the Lagos Chamber of Commerce and Industry (LCCI), on Thursday, gave reasons why some of the exporters hide their export proceeds.
He said the policy of exchanging export proceeds at the Nigerian Autonomous Foreign Exchange (NAFEX) rate is not fair to the exporters because of the gap between the official and unofficial exchange rate windows.
“Exporters should have free access to their export proceeds and be incentivised, just like the Nigerian diaspora were encouraged with the Central Bank of Nigeria’s naira 4 dollar exchange rate policy for remittances,” he said.
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He noted that the exporters are passing through a lot of difficulties, adding that the way to attract foreign exchange is to export but ” if you go to the ports and see what exporters are going through, you feel sorry for them and the Nigerian economy in general.”
According to Yusuf, “we say we don’t have foreign exchange but the way to attract foreign exchange is to export. However, exporting is almost a nightmare in Nigeria.
” For instance, the process for export cannot begin until an exporter has loaded the truck and paid the truck owner. After paying the truck owner he will go through about two weeks of inspection and documentation. After which he will also face the traffic gridlock and before they could finish the inspection and documentation some of the products must have gone bad especially the ones that are perishable,” he emphasised.
He called on the Nigerian authorities to create an enabling environment that will encourage export business and attract foreign exchange (forex).
The Nigerian economy, according to him, has the capacity to attract a lot of foreign exchange because of its size, stressing that there are potentials and opportunities that are still hidden.
Yusuf further stated that looking back into the last six months, the monetary policymakers retained policy parameters as the committee tried to maintain a balance between boosting growth recovery and curbing the monetary component of inflationary pressure.
The CBN, according to him, sustained its developmental finance intervention in the first half as part of efforts in stimulating local production.
Similarly, “the bank employed administrative measures including Open Market Operation (OMO) auctions, Loan to Deposit Ratio (LDR)/ Cash Reserve Requirement (CRR) debit and special bill auctions to control excess liquidity in the banking system as a way of tackling the monetary inflationary drivers.
“The banking industry demonstrated resilience amid disruptions associated with the pandemic, attributable to the policy intervention of the CBN,” he said.
Going by key ratios, Yusu added that the banking industry is financially stable and sound with industry capital adequacy and liquidity ratios above regulatory threshold while non-performing loan ratios are slightly above the five percent prudential guideline.
Yusuf spoke at the monthly forum of the Finance Correspondents Association (FICAN), themed “post COVID-19 economy in H1:2021 and outlook for the financial services sector.”
