Emefiele Begs As Inflation, Naira Devaluation Forces Investors To Exit Nigeria

The Governor of the Central Bank of Nigeria, Godwin Emefiele, has told investors that the country has the most attractive Return on Investment, a move to woo them into the country.

Emefiele made the call at the Nigerian International Economic Partnership held in New York on Thursday.

The CBN is faced with the trilemma of solving inflation, naira devaluation and insecurity.

Foreign exchange crunch is depleting the value of the naira and as well as the Nigerian forex reserves.

The naira has devalued around N700 per dollar at the black market, while at the Investors and Exporters FX Window, the currency traded at N436.50 against the dollar on Thursday.

Nigeria generates forex through earnings from Foreign Portfolio Investment and Foreign Direct Investment, crude oil import proceeds, diaspora remittances and export proceeds.

In August, Nigeria’s inflation rose to 20.52 per cent, complicating the dollar crunch which the CBN has been unable to solve.

Despite Nigeria’s high yields on government securities, investors have become less fond of FGN bonds and are divesting their portfolios.

At the bond auction in August, the Debt Management Office (DMO) could only raise N200.9bn, an amount lower than the total offer of N225bn at the re-openings of 2025, 2032 and 2042 FGN bonds.

He said, “We are aggressively looking at non-oil exports and it is paying good dividend. Last year I just said this, I repeat, Nigeria remains an investment haven based on the size and the economy in Africa and also because of the market in Nigeria.

“Nigeria’s market is the best. With your Return on Investment, you will never find something better in any country other than Nigeria. I can only encourage you to please take a look and continue to take a look at Nigeria.”

The CBN Governor during the investors forum call revealed that its RT200 FX programme has attracted $1.645bn since its inception is February 2022.

Emefiele unveiled the initiative tagged ‘RT200 FX programme’ in February at the post-Bankers’ Committee briefing.

The RT200 which was backed by the Bankers’ Committee is believed to help the country repatriate $200bn in foreign exchange from exclusively non-oil exports over the next three to five years from commencement.

The CBN Governor said so far, $1.645bn has been recorded between February to early September, 2022.

A breakdown revealed that between February to March, only $64m was recorded, while in the second quarter, $622m was repatriated.

According to Emefiele, $959m non-oil repatriation was recorded in the third quarter covering July to September 2022.

The CBN Governor revealed, “There has been reduction in FX supply from the sale of crude oil and consequently, we have seen the naira depreciate at the I$E Window to as low as N436 to the dollar recently. And in response, we have turned to non-oil sources of raising foreign exchange and so, most of course will have known our RT200 project which is meant to really see what can be done to boost non-oil export repatriation into the economy.

“During the first quarter of 2022 when we stared in just February and March, repatriation was about $64m. Second quarter of 2022, repatriation for non-oil export was $622m.

“The third quarter of 2022, the repatriation that we have says that non-oil export repatriation has attained the level of $959m. We are expecting that even the fourth quarter will certainly go beyond this.”