Nigeria's central bank is hoping the country can reach earnings of $200 billion a year in foreign exchange from non-oil exports over the next three to five years, its governor said on Thursday, with plans to stop dollar sales to lenders this year.
Nigeria, Africa's biggest economy, has been battling dollar shortages that arose from previously low oil prices for oil, its main export, and coronavirus-related disruptions. It has put in place a multiple exchange rate system as the government seeks to avoid the embarrassment of a large naira devaluation. Governor Godwin Emefiele told reporters that the central bank will stop commercial banks from sourcing dollars for imports from its reserves in 2022. A similar ban placed on exchange bureaux in July caused the naira to tumble to record lows on the black market. "After careful consideration, the (Central Bank of Nigeria) is...announcing the bankers committee RT200 FX program, which stands for the race to $200 billion in FX repatriation into Nigeria," Emefiele told reporters in Abuja following a meeting with Nigerian bankers.
He said the central bank will support exporters that already have production plants in Nigeria to scale up, by providing soft loans, and that commercial banks will need to start generating foreign exchange and not depend solely on the central bank. On Tuesday, Nigeria's biggest builder Julius Berger said it would diversify into cashew nut processing to take advantage of strong foreign demand, amid a sluggish construction market. Nigeria's poor infrastructure has jeopardised the government's ambitions to turn the country into a manufacturing hub and grow the agriculture sector. President Muhammadu Buhari has pledged to strengthen the agricultural sector to reduce Nigeria's costly food imports and diversify the economy away from an over-reliance on oil. But access to long-term funds in local currency has been a major hurdle. "I'm mindful that this goal ($200 billion inflow) may appear unattainable to some, but we can achieve it," Emefiele said.