CBN rebate expenses on abolished RT200, Naira4Dollar schemes gulp N155.59bn

REBATE expenses on RT200 and Naira4Dollar, which the Central Bank of Nigeria (CBN) abolished some weeks ago, barely one year after introducing the schemes, gulped an estimated N155.59 billion.

Analysis of the CBN Consolidated Financial Statements for the year ended December 31, 2022, has shown.

The ICIR reported that the apex bank released its financial records for the last seven years amid public outcry and an investigation into its financial management.

A cursory look at the financial report revealed that rebate expenses formed the second largest and represented 17.51 per cent of N888.34 billion of CBN’s other operating costs.

“Rebate expenses represent expenses incurred by the CBN in connection with the RT200 and Naira4Dollar schemes which the Bank introduced to enhance foreign currency inflow, diversify the sources of FX inflow, increase the level of non-oil exports, ensure stability and sustainability of FX inflows, and support export-oriented companies to expand their export operations and capabilities,” the apex bank stated in the report.

A further look at the report showed that CBN incurred N137 billion in 2022 on the RT200 scheme and recorded zero figures for 2021.

On the Naira4Dollar expense, the apex bank incurred up to N4 billion, which was captured under intervention expenses.

Introduced by the suspended CBN Governor, Godwin Emefiele, the schemes were expected to boost non-oil exports and diaspora remittances to encourage foreign exchange inflows.

Specifically, CBN introduced the Race to $200 billion (RT200) in foreign repatriation in February 2022 to stimulate non-oil exports with a $200 billion foreign exchange income target for three to five years and was expected to increase the external reserves.

The incentive was for a rebate of N65 for every $1 of repatriated non-oil export proceeds to be paid to exporters of semi-finished and finished goods, while exporters of unprocessed items enjoy a rebate of N25/$1.

Read Also:

Following the implementation of the RT200 programme, Emefiele had said that as of May this year, the export proceeds repatriation into the country amounted to $5.6 billion in 2022, representing just about 2.8 per cent of the $200 target.

Similarly, the Naira4Dollar scheme, introduced in March 2021, incentivised senders and recipients of international money transfers to be paid N5 for every $1 received as a remittance inflow.

The two programmes, aimed at encouraging inflows of diaspora remittances into the country, were abolished by CBN, which took effect on June 30, The ICIR reported.

Taking a further look at the period in view, The ICIR can report that gross external reserves declined by $2.34 billion to $37.08 billion as of the end of December 2022 from $34.74 billion as of March 8, 2021, when the Naira4Dollar took effect.

Admitting the bank’s failures in managing the foreign exchange system, the acting CBN governor, Folashodun Shonubi, has threatened to punish operators engaging in illegal foreign exchange dealings, The ICIR also reported.

On Tuesday, August 15, the naira depreciated against the dollar at N774.77/$1 at the Investors’ and Exporters’ (I&E) window, while at the parallel market, it closed at N942/$1.

The CBN acting governor has revealed that most remittances were outside the legal market.

Shonubi disclosed this at a lecture entitled, ‘Diaspora Remittances and Nigerian Economic Development’ on Thursday, August 10.

“Nigeria received about $16.7 billion in remittances, with the vast majority of the money outside the legal market,” he said.

Read Also:

Lamenting on the shortcomings of the remittance system, Shonubi estimated that it costs 8-9 per cent of every $100 to transfer money to Sub-Saharan Africa from the diaspora, describing the cost as the highest in the world.

“We are working hard to encourage individuals to bring money into the formal sector rather than relying on informal channels, which have become difficult to manage,” he lamented.

Shonubi, however, assured that CBN was taking steps to restrict illegal remittances and that a formation of a commission would start paying unscheduled visits to banks accused of unlawful sales of dollars.

“We need to name and shame commercial banks involved in such malpractices,” Shonubi stressed.

He admitted that the apex bank’s effort to induce individuals to engage in formal market transactions by granting an N5 refund failed as the technique has been ineffective, prompting the discontinuation.

He added that CBN plan to rename the foreign exchange market, known as the I&E market, to the Nigerian Foreign Exchange Market, as it is the sole market CBN acknowledged.

Meanwhile, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, had told The ICIR that unifying the exchange rate would check illegal economic activities.




     

     

    Gwadabe suggested that the country could solve the foreign exchange liquidity shortfall by increasing the standardisation, packaging, and yield of its primary products.

    He said, “Like the BDC, the export sector has been criminalised and has a lousy perception that many people don’t want to buy Nigerian goods because the good is seen as substandard and fake.

    “So, the government has to de-risk the export market the way it de-risked agriculture.

    He urged the government to reduce the documentation bottlenecks associated with our export commodities by bringing all the different agencies into a central processing area as done in other climes like Lome and Togo.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement

    Recent

    - Advertisement