Repatriation of export earnings: Producers criticize CBN for leaving out non-petroleum exporters

Manufacturers under the Manufacturers Association of Nigeria Export Group have expressed concerns over a perceived policy imbalance by the Central Bank of Nigeria, stemming from its recent decision to grant International Oil Companies unfettered access to repatriate 100 per cent of their export proceeds.

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This move was made possible after the apex bank scrapped the cash pooling requirement for IOCs' foreign currency inflows, allowing them to retain and repatriate their full export earnings through Authorised Dealer Banks, as part of ongoing foreign exchange reforms.

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While the development has been welcomed by stakeholders in the oil and gas value chain, non-oil exporters have raised concerns that the policy could deepen structural distortions in Nigeria's export landscape.

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According to Dr. Benedict Obhiosa, Executive Secretary of MANEG, the decision signals a shift toward a more liberal and investor-friendly foreign exchange regime, capable of boosting investor confidence and enhancing ease of doing business in the oil sector.

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He noted that the policy is expected to attract increased investment into Nigeria's oil sector and potentially other sectors, but also raises concerns about foreign exchange liquidity, as more FX earnings could be repatriated offshore, limiting supply within the domestic market.

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Obhiosa further emphasized that the exclusion of non-oil exporters from similar concessions underscores a significant policy gap, highlighting a clear imbalance as non-oil exporters are not given comparable incentives.

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This, he said, could reinforce the country's dependence on oil exports and weaken ongoing efforts to broaden the export base, as non-oil exporters are critical to Nigeria's diversification agenda.

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Dr. Obhiosa called on policymakers to introduce complementary measures that would support non-oil exporters, stressing that balanced incentives are essential for achieving sustainable and inclusive economic growth.

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However, industry operators in the downstream segment of the oil and gas sector have taken a different view, with Sales and Marketing Manager of LUBCON Group, Mashood Sanni, describing the policy as timely and beneficial to industrial operations.

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Sanni said the CBN's decision comes at a critical period of global economic uncertainty and is expected to enhance foreign exchange liquidity and strengthen investor confidence, which will improve forex availability for indigenous lubricant manufacturers.

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This, he explained, will ease procurement challenges, boost production capacity, and enhance competitiveness in both domestic and export markets, ultimately supporting industrial growth, encouraging investment, and promoting sustainability within the indigenous lubricant manufacturing segment.

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Sanni noted that the policy will enhance the capacity of local manufacturers and contribute to broader economic recovery, at a time when the Nigerian economy is facing significant external pressures.