By Chijioke Ohuocha

ABUJA, Reuters – Nigeria is offering a naira incentive in an effort to boost its dollar supply to exporters semi-processed goods and final goods.

Nigeria has been facing a shortage of dollar and rising demand. Foreign exchange providers, including offshore investors, left after the COVID-19 pandemic that triggered an oil price crash.

In a circular, dated February 25, the central bank stated that it would pay exporters 65 naira ($0.16) for each repatriated dollars through official channels. It will also pay 35 naira to repatriate funds for other purposes.

According to the central bank, Nigeria hopes to earn $200 billion per year from foreign currency (non-oil) exports in the next three years.

The Central Bank of Nigeria (race to $200billion) program was launched to lower exposure to unstable foreign exchange sources and ensure stable, sustainable FX inflows.

According to the announcement by the central bank, Nigeria is able to sell oil and cocoa globally for dollars. However, it can import petrol and other chocolates at a higher price.

Sometimes, exporters sell some of their profits on an unofficial exchange where the dollar trades at a premium against the naira. Or they keep the funds overseas, which is something the central bank would like to see change.

The bank provided 5 naira for each dollar imported through licensed channels to beneficiaries of remittances sent from Nigeria. Later, the bank extended this offer for an indefinite period of time. It stated that five times more people were sending money to Nigerians abroad than was available through licensed channels.

After oil exports from Nigeria, Africa’s largest economy, remittances and money transfers are the second-largest source of foreign currency receipts.

($1 = 415.39 naira)