The Central Bank of Nigeria (CBN) has set up a N500 billion non-oil export stimulation facility with the Nigerian Export Import Bank (NEXIM) to enable exporters process agriculture commodities into other markets in Africa and globally.
CBN Governor, Mr Godwin Emefiele who disclosed this at Zenith’s Bank 2021 Export Seminar on Tuesday said the initiative will enable businesses expand their scale of production, with a view to meeting growing domestic demand for goods for the export market.
He pointed out that improving the business environment in Nigeria is also vital “if we are to harness the gains from the AFCFTA”.
“The Central Bank through our Trade Monitoring System portal (TRMS) is also helping to reduce the time it takes to complete the export documentation process, as faster turnaround time could help to reduce delivery time for goods destined for exports, and enable businesses expand their output.
“Today, businesses can complete their NXP applications on the TRMS portal in 30 minutes relative to two years ago, where it could take as much as two weeks to complete the process. We are also working with stakeholders in repositioning the Nigerian Commodity Exchange, which would help to support greater trade for operators in these vital sectors earlier mentioned.
“Once the exchange becomes fully operational in the 2nd half of the year, international buyers of raw and processed agricultural commodities will be able to enter into forward contracts with domestic suppliers on the exchange, and they can be assured of not only the quality of the goods sold through the exchange, but on the expected date of delivery.
“We believe these forward contracts will help to support improved productivity for farmers and agro-processors, it will also help to improve access to credit for these entities using the forward contracts as collateral, he said.
Emefiele further stated that supporting greater trade within Africa would also require the presence of a viable payment settlement system, adding that the CBN is working with key stakeholders in the African continent, particularly the Afrexim Bank to improve the underlying payment infrastructure to support greater intra-regional trade, through the Pan African Payments and Settlement System(PAPSS).
The governor said, “this initiative will enable payments in our local currency for goods in other African countries and vice versa, without the need for a third-party currency. This initiative will help to reduce the cost of cross border trade, improve convertibility of the Naira, and increase trade opportunities for Nigerian businesses in Africa.
“Although Nigeria stands to gain from expanded trade, I believe it is also important that we pay attention to the cost that expanded trade through the AFCFTA could have on local businesses and communities. Smuggling of goods produced in non-African countries into Nigeria, and abuse of rules of origin have often resulted in significant job losses and displacements of workers in key sectors of our economy such as agriculture and manufacturing. It is vital that we work with the governing body of the AFCFTA in addressing these concerns, as it has profound implications on unemployment and security in Nigeria”, he added.
The governor who enjoined existing exporters to endeavor to repatriate their export proceeds as required by law as “the CBN guarantees that exporters will have unfettered access to their export proceeds, and we do expect that exporters would reciprocate the good gestures of the Bank by repatriating their export proceeds to improve foreign exchange inflows into the country.
He disclosed that full implementation of the AFCFTA, is expected to give Nigerian firms preferential access to markets in Africa worth $504.17billion in goods & $162bn in services.
“I believe that we should seize this opportunity to ensure that Nigeria serve as a significant hub for international and domestic manufacturing companies seeking to serve the West, Central and East Africa”, he assured.