CBN plans incentives for Nigerian importers in currency swap deal

The Central Bank of Nigeria (CBN) has authorized the use of Renminbi (RMB) instead of dollar by Nigerians to import some specific goods from China to achieve maximum benefit in the recent $2.5 billion currency swap pact signed by both countries.

This was disclosed at a press briefing organised by the apex bank at the end of the Bankers Committee meeting held in Lagos yesterday.

According the committee, importers of Chinese equipment, machineries and goods are expected to obtain invoices in RMB instead of dollar for settlement which would ultimately cut down transaction cost and make importation cheaper for Nigerians playing in that market segment.

The committee said the arrangement would go a long way to strengthen the nation’s external reserve which is currently put at $48 billion.

Specifically, a member of the Bankers’ Committee and the Chief Executive, Stanbic IBTC Bank, Demola Sogunle, said: “CBN and the Bankers Committee are to start encouraging importers to receive invoices in Renminbi instead of dollars.

One of the incentives will be that a percentage spread will be given to any importer that is bringing a Renminbi invoice for settlement instead of bringing a dollar invoice.

If you bring Renminbi invoice, the benefit is that it is going to be cheaper for the importer in coming to CBN to get foreign currency which, in this case, will be Renminbi.

“The importer will actually bring lesser amount of naira.

If he goes ahead to buy with the same supplier based in China and collect invoice in dollars, it will cost the importer slightly more in terms of the naira amount he will use to get the foreign currency.

“We have got almost $48 billion in external reserve, because we trade a lot with China.

If we are able to continue to bring in machinery and equipment, without depleting our dollar reserve, the external reserve will not be under threat.

So with the Renminbi in place instead of dollar, based on this swap deal, we are in a very good position. So importers are encouraged to bring in invoices in Renimbi instead of dollars. “