CBN: After Osinbajo, Rewane Slams Apex Bank’s Forex Policies

By Tosin Olatokunbo

Financial guru Bismark Rewane has slammed the CBN for initiating various naira-dollar policies that have so far failed to achieve desired results.

Rewane, the chief executive of Financial Derivative and a member of President Muhammadu Buhari’s Economic Advisory team said the Governor Godwin Emefiele-led CBN has so far failed to impress with policies churned out to stabilize the value of the naira.

He spoke barely four months after Vice President Yemi Osinbajo said the naira exchange rate set by the CBN is unrealistic. He advised Emefiele to have a ‘rethink’ over his forex management strategy.

“As for the exchange rate, I think we need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply.

“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow.

“I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.

“Anyway, all those are issues that when the CBN governor has time to address, he will be able to address in full”, Osinbajo said.

According to Rewane, the CBN has initiated at least four forex-targeted policies, in the last few months, with no tangible results. He mentioned the policies to include the Naira for dollar, import restrictions and scrapping of dollar sales to Bureau de Change, BDC.

Also, the apex bank had few days ago promised importers N65 for every dollar of non-oil export proceeds sold to third parties at the importers and exporters (I&E) window, as pressure continues to mount on the need to stop the free fall of the national currency to the US dollar. Naira was exchanged for N416 to the dollar at the official market and N514 at the parallel market at the close of business last week.

According to a circular released by the CBN on February 25, the government bank said the N65 per dollar initiative was meant to serve as incentive to importers and exporters aimed at attracting $200 billion in foreign exchange earnings from non-oil exports proceeds within five years.

The apex bank said it expected more dollars to be repatriated to the country throw the window.

“The scheme shall pay N65 for every US$1 repatriated and sold at the I & E Window to Authorised Dealers and Banks (ADBs) for other thirty party use,” the circular said.

The CBN further stated that importers and exporters will be rewarded “N35 for every US$1 repatriated and sold into I&E for own use on eligible transactions only. However, the spread should not be more than 10 kobo.

“Payment of the incentive shall be made on quarterly basis. The accounts of exporters that qualify for rebates shall be credited latest one week after the end of the quarter.

“Exporters shall qualify for the rebates only, where repatriated export proceeds are sold at the Investors & Exporters Window (I&E).

“Eligible transactions that qualify for incentives under the scheme shall be export of finished and semi-finished goods wholly or partly processed or manufactured in Nigeria, except otherwise stated by the CBN; and export of goods and services (IT and creative businesses) that are permissible and excluded under existing export prohibition list”, the CBN said.

But speaking Rewane said the initiatives have failed to achieve results. For instance, the presidential adviser said the N65 per dollar will not attract those specifically targeted, adding that exporters will prefer to sell their dollar earnings at the parallel market to make huge profit.

He said the disparity in the exchange rate of the naira at the parallel and official market is too attractive to ignore.

“Will exporters be willing to give up N99 per dollar out of patriotism?” Rewane asked.