Economist Lauds CBN Over Plan to Pay N65 Rebate for Every Dollar Remitted

An economist, Mr. Johnson Chukwu, has said that the plan by Central Bank of Nigeria (CBN) to offer exporters N65 for every one dollar remitted into the economy will encourage them to return their proceeds through official window.

Chukwu, who is the Managing Director, Cowry Asset Management Limited, said this in an interview with the News Agency of Nigeria (NAN) in Lagos on Tuesday.

“CBN’s plan to give exporters N65 for every dollar remitted will encourage them to bring back their export proceeds through the official window, although this may not necessarily lead to an increase in export due to several factors.

“The factors include: the cost of production which is higher than what is obtained in other countries, owing to paucity of infrastructure and the cost of doing business.

“This, among other factors, constraints exports because you have to produce at a cost-efficient level to be able to compete with the products made elsewhere.

“So for that reason, this incentive may not necessary lead to an increase but it will encourage exporters to bring back their export proceeds through the official window, instead of patronizing the parallel market,’’ he said.

The economist said that the incentive would also make it easier for CBN to manage foreign exchange position and reserve.

According to him, this is because as long as transaction funds come in through the official channel, it will be easy to measure accurately how much that is coming in.

“It will also become easier for CBN to identify the new exporters and find ways of incentivizing further,’’ he said.

Chukwu urged the three tiers of government to join hands with the apex bank to make the naira stronger, following the International Monetary Fund’s historical report of what had happened to the currency in the past couple of years.

He said stressed the need for improving the country’s export, with regard to import so as to strengthen the naira.

“The naira can only be strengthened when we increase exports and reduce imports, which takes us back to the issue of making the business environment cost-efficient, so that businesses can operate cost-effectively and compete with other countries and products produced elsewhere.

“We also need to improve the supply of basic infrastructure, reduce the cost of doing business and the number of bureaucracy along the channel of doing business,’’ the economist added.