GTBank initiates dialogue on forex, non-oil Export

GUARANTY Trust Bank has initiated a dialogue on issues affecting trade, forex and export activities, thereby providing an avenue for all stakeholders to address lingering issues affecting the non-oil export business in Nigeria.

This, according to the bank was part of its resolve to bridging the communication gap and fostering better working relationship with a cross-section of its customers has organized a one-day Non-oil workshop at its corporate Head office in Lagos.

The workshop brought together major regulators (CBN), Nigerian Export Promotion Council, Nigeria Customs Service, Nigeria Export-Import Bank, Nigerian Agricultural Quarantine Services, Federal Produce Inspection Services, Carmine Assayer Limited Inspection Services) and some of its key exporters.

The Technical and Commercial panel discussion which was both anchored by Bamidele Ayemibo of 3T Impex (An export consultant in Nigeria), comprised Nigeria Customs Service, Nigerian Agricultural Quarantine Services, Federal Produce Inspection Services, Carmine Assayer Limited Inspection Services. The commercial panel comprised of Central Bank of Nigeria, Nigeria Export-Import Bank, Nigerian Export Promotion Council and GTBank. The agencies explained their mandates as regards non-oil export business in Nigeria.

One of the major points of discussion was the utilization of export proceeds. Majority of the exporters in attendance decried the CBN directive as regards export proceeds utilization.

It will be recalled that in February 2015, CBN came out with a circular notifying the public that export proceeds can only be used for eligible trade transactions or sold to the Authorized Dealer Bank for the Naira equivalent.

This, the exporters unanimously said, is not favorable as the price at which they source commodities for their export is benchmarked against the parallel market rate, meaning selling the proceeds at the official rate to the commercial banks is not profitable.

Sriram Venrateswaran, an exporter and the Chief Executive Officer Fullmark Commodities Limited, suggested that exporters should be allowed to sell their export proceeds to importers to fund their import business. The CBN representative, Mr Vincent  opined that exporters can write to CBN through their banks for such request for approval. He also added that the CBN is looking into ways of giving more flexibility to the policy on utilization of export proceeds.

Reacting to an earlier appeal by an exporter for the federal government not to restore the export expansion grant (EEG), Vincent said there was pressure on the federal government to restore the EEG. According to him, although the CBN was against it because it was being abused, the central bank does not have the powers to prosecute. Vincent said the federal government had disclosed plan to reintroduce the EEG. He assured the exporters that the CBN was committed to supporting their businesses.

Another exporter in attendance, Ram Hemnani representing Primlaks suggested that rather than re-introducing the EEG, such funds should be used to fix infrastructure as that will benefit more exporters rather than the few the EEG will benefit. He added that both post-shipment and pre-shipment incentives can be introduced by the CBN. Also, he believes that there won’t be need for EEG if the infrastructures are there. Hemnani also suggested that Nigeria should promote her commodities/products in the international market and media so as to create demand. In reaction, Vincent said: “Last year at the beginning of this crisis, the Governor of the CBN, Mr Godwin Emefiele had a meeting with the exporters in Lagos. At the meeting, we discussed issues bothering on remittances, volatility in exchange rate and other issues. Sadly, there was no sincerity of purpose amongst the people that came for that meeting. But today we can see some level of sincerity and discourse.” He assured that feedback from the forum will be deliberated upon. He also implored exporters to ensure they repatriate their export proceeds.

On the Export Stimulation Fund, Abiola Aderonmu representing FTN Cocoa Processors PLC enquired if/when it will approve. Vincent assured that the funds will be disbursed to the applicants once the requirements are met. He further stated that measures had been put in place to support businesses in the country, stimulate growth and grow the economy. He also called on importers to ensure that the country benefits from what they are importing.

He said: “We (CBN) are going to do more to stabilise the value of the naira so that everybody is happy. The present government is trying to ensure that we consume what we produce locally.”

One of the keynote speakers, Babatunde Faleke representing Nigerian Export Promotion Council (NEPC) also advised exporters on the need to add value to their produce. This, he said, will enable them get more value for their exports. He added that the Council is committed to assisting exporters to move from raw materials based export to finished goods export. He mentioned that the Council is ready to partner with exporters in this regard to help grow their business and in turn grow the economy, as huge potentials exist in different segment of the non-oil export business.

The stakeholders all commended GTBank for the initiative and appealed for such workshop to be held in other regions of the country.

GTBank has consistently played a leading role in Africa’s banking industry. The GTBank brand is regarded by industry watchers as one of the best run financial institutions across its subsidiary countries and serves as a role model within the financial service industry due to its bias for world class corporate governance standards, excellent service quality and innovation.