Nigeria expands export incentives to cushion declining Forex inflows

Nigeria has expanded its non-oil export rebate program, opening it up to additional sectors as it seeks to boost dollar inflows amid slumping oil production.

The Central Bank of Nigeria will pay naira incentives to exporters of primary goods or raw materials that repatriate dollars to encourage them to export more, the lender said in emailed statement on Thursday. This amends an initial rule released last year that applied only to exporters of finished and semi-finished goods and takes effect retroactively from April 1.

Exporters of raw materials will get only 25 nairas per dollar of repatriated export earnings compared to 65 naira per dollar paid to exporters of processed items. The central bank said the incentives helped increase the country’s non-oil export receipts by 86% to $5.6 billion in 2022, according to Governor Godwin Emefiele.  

Africa’s largest crude producer is looking to boost non-oil exports to reduce its dependence on crude sales. The central bank mobilized commercial lenders last year to provide incentives to exporters to repatriate their earnings to help the West African nation reverse declining dollar inflows caused by low oil production and fleeing foreign investors avoiding the country’s restrictions around dollar outflows and multiple exchange rates. 

Foreign direct investments into the country plunged by a third in 2022 to $468 million from $698 million a year earlier, according to the statistics agency.