CBN to pay raw material exporters for bringing back dollars

Nigeria is expanding its incentives to new sectors to boost exports and dollar inflow into the country.

Nigeria relies on crude oil for more than 85% of its foreign exchange earnings. With falling oil production, the government is seeking to increase non-oil exports.

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The Central Bank of Nigeria said it will pay naira incentives to exporters of primary goods and raw materials who repatriate dollars to encourage them to export more.

An earlier policy which came into effect last year offered such rebate to only exporters of finished and semi-finished goods. Now, exporters of raw materials will also benefit.

The new policy takes effect retroactively from April 1, the CBN said in a statement on Thursday, according to Bloomberg.

Under the programme, exporters of raw materials will get N25 per dollar of export earnings they send back home compared while exporters of processed items will receive N65.

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Nigeria has faced years of dollar shortage with the attendant impact on naira and the wider economy.

The CBN said rebates it offered through commercial banks last helped increase Nigeria’s non-oil export receipts by 86% to $5.6 billion.

Foreign direct investments into the country fell by a third in 2022 to $468 million from $698 million a year earlier, according to the National Bureau of Statistics.

Nigeria’s foreign reserves fell to N36.2 billion in the first week of March, the lowest level in 17 months, according to central bank figures.