CBN: BOOSTING THE ECONOMY OF NIGERIA USING RT200 AND TIES

The Central Bank of Nigeria (CBNintroduction )'s of the RT200 and Tertiary Institutions Empowerment Scheme (TIES) has provided Nigeria's economy what she needs to grow.

It is common knowledge that Nigeria's economy is on the verge of collapse due to internal and external shocks, including weak exports, insecurity, the COVID-19 effect, oil theft and pipeline vandalism, currency speculators, and a ballooning debt profile of N42.84 trillion.

As a result of all of these factors, rate at which people are not getting job has increased to roughly 33% and is continually rising.

Nigeria urgently needs to diversify its revenue sources because oil revenues are on the decline due to widespread oil theft.

Over the past seven years, the Central Bank of Nigeria's Governor, Godwin Emefiele, has made significant efforts to reduce the country's excessive reliance on imports for food and industrial raw materials in order to move the country toward not just self-sufficiency but also self-reliance.

In keeping with this objective, the Apex Bank keeps implementing different policies in the form of interventions to finance important economic sectors.

Among them are the Tertiary Institutions Empowerment Scheme (TIES), which aims to wean undergraduates and graduates from the addiction to white-collar jobs, causing them to direct their energy to being their own boss, and in the process create jobs, ultimately growing the economy. The RT200 (Race to $200 billion forex inflows) is an FX repatriation initiative that aims to boost non-oil exports.

The CBN and Bankers' Committee launched the RT 200 program in February in order to generate $200 billion in FX earnings from non-oil receipts over the following three to five years.

Sharp economic observers have praised the program, calling it a masterstroke that will finally fatten the FX reserves, despite the inconsistent accruals in the Foreign Exchange (FX) reserves, which have shrunk from $39,650 billion in April to $38,540 billion in May 2022.

This move in strategy is one audacious attempt to redirect the economy by bolstering investors in the non-oil sector whose products are intended for offshore markets at a time when the naira is falling to the whims of the market and domestic inflationary pressure.

In addition to the added value of these products, the RT 200 policy requires exporters to meet international export criteria in order to be eligible for the maximum benefits, which are equal to the profits of rival exporters of goods.

The policy was inspired by to mainstream non-oil export-oriented industries in order to generate sustained FX inflows and protect the Nigerian economy from debilitating shocks and FX shortages. Enhancing FX inflow, diversifying FX inflow sources, raising the percentage of non-oil exports contributing to GDP growth, ensuring the stability and sustainability of FX inflows, and assisting export-oriented businesses in growing their export operations and capabilities are the desired results.

The head of the CBN in a speech in Lagos that non-oil exporters will return $4.987 billion to their home countries in 2022.

The amount is considerably larger than the $3.19 billion that would be sent back home in 2021. Only $1.966 billion of this total, he clarified, qualified for the refund program, and only $1.559 billion of it was sold through the Investors & Exporters (I&E) window or for personal use. The CBN had given Nigerian exporters rebates totaling roughly N81 billion.

He mentioned that exporters expressed interest in adding value to their products so they could take advantage of the program based on feedback from banks. So that more exporters may take advantage of the program and receive a higher value for their exports, exporters are expected to develop ways in improving their products.

In order to increase capital flows into the economy and create jobs to support growth, he invited participants to submit creative ideas for looking into the non-oil export industry.

The CBN pays N65 per $1 repatriated and sold at the Investors' and Exporters' (I & E) Window to Authorized Dealer Bank (ADB) for use by other third parties each quarter, and N35 per $1 repatriated and sold into (I & E) Window for the Exporter's use on eligible transactions only. These payments are the source of the incentives made available to qualified companies under the RT 200 scheme. It goes without saying that the incentive payments for each dollar repatriated and sold at the designated banks encourage the return of profits and deter capital flight while also guaranteeing that there is an adequate amount of repatriated FX to support economic growth rather than being wasted on the open FX black market.