Give Exporters Free Access To Forex Proceeds, LCCI Tells CBN

The Lagos Chamber of Commerce and Industry has called on the Central Bank of Nigeria to give exporters unrestricted access to their export proceeds.

The Chamber said the disparity of rates across the three exchange windows makes it unfair for the CBN to insist that exporters must exchange their proceeds at the Investors’ and Exporters’ foreign exchange window rate, when they could mutually agree on a rate with their various banks.

The Director-General of the chamber, Muda Yusuf said this in an exclusive interview with THE WHISTLER.

The reaction comes after the CBN Governor, Godwin Emefiele, during the 277th Monetary Policy Committee Meeting insisted on its earlier position of barring exporters who were yet to repatriate their export proceeds from the Nigerian banking services effective from January 31, 2021.

The apex bank has a policy that requires exporters to repatriate exports proceeds within 90 days for oil and gas and 180 days for non-oil exports. Failure to do that constitutes a breach of the extant regulation.

With the shortage of foreign exchange in the country, the apex bank had placed its hopes on the remittance of export proceeds and Diaspora remittances after it had over $2bn foreign exchange backlogs last year.

The CBN estimates a total of $26.13m as non- oil export proceeds which has not been remitted as of October last year.

In a circular dated January 13, 2020, the CBN directed banks to bar all ailing importers from accessing banking service in the country after the January 31 deadline.

The circular said, “You are by this letter mandated to request your customers with outstanding export proceeds to repatriate, failing which the customer would be barred from accessing all financial service.”

Emefiele while restating the bank’s position last Tuesday said, “The Central Bank will not tolerate it if you conduct an export activity and you keep the dollar abroad.

“It is by law mandatory that you must repatriate those proceeds into Nigeria. If you refuse to, the Central Bank has the power to by law prevent you from conducting banking activity in the Nigerian banking industry and we will do so.”

With the end of the deadline, Deposit Money Banks are expected to bar the defaulting exporters from access to banking services.

The Director- General of the Lagos based chamber who admitted that the exporters were required to repatriate their export proceeds, noted that the rate at which the exporters exchange their proceeds was unfair.

Yusuf said, “What happens is that the exporters are not getting the fair exchange rate for their export proceeds, the exchange rate that exporters are been mandated to collect is about N400 or N390 to the dollar, that is the Investors and Exporters Window rate whereas the market rate is about N478, you can see the gap. That is almost the gap of N80 on a dollar. That will not be fair to the exporters.

“I am not saying or trying to excuse exporters from complying with regulations; every business must comply. But regulations must also be fair and equitable to different people. That way people will level up compliance. So, we need to look at it from those two sides. The quality of the regulation itself, and the need to also watch the exporters to comply.

“But it will be only fair that exporters are given unfettered access to their export proceeds. Let them sell their export proceeds to the banks at a mutually agreed rate. Not that the bank or CBN will tell you that you will not sell your export proceeds above a particular rate. That is not fair.”

On Friday, the naira closed N478 per dollar at the parallel market, while at the I&E window, the naira closed N394.13 per dollar, while the CBN rates stood at N379.