Clearly, naira’s sharp drop against dollar at the parallel market in recent times is one of the most discussed issues in Nigeria today. For instance, in a recent report, analysts at Financial Derivatives Company (FDC), citing the country’s inability to benefit from higher oil prices and the decline in foreign portfolio inflow as well as the fall in Diaspora remittances, predicted that an adjustment of the exchange rate may be “inevitable.†The analysts, who noted that naira had dropped by 25.31 per cent in 12 months (N609/$) at the parallel market, contended that Nigeria’s “multi-exchange rate structure is an economic destroyer,†and that “the time to make policy adjustments is now…†Given that one of the core mandates of the Central Bank of Nigeria (CBN) is maintaining the external reserves in order to safeguard the international value of naira, the apex bank is usually not spared criticism whenever the local currency heads south at the parallel market. However, the banking industry regulator has consistently pointed out that naira’s perennial weakness, especially at the parallel market, is the result of the country’s dependence on crude oil export earnings and Nigerians’ penchant for foreignmade goods and services. In fact, CBN has frequently said that the many intervention programmes it designed in recent years as part of its development finance function such as the Anchor Borrowers’ Programme (ABP), the Accelerated Agriculture Development Scheme (AADS), the Commercial Agriculture Credit Scheme (CACS) and the Agri-Business Small and Medium Enterprises Investment Scheme (AgSMEIS), were informed by the urgent need to encourage local production of goods and services, thus reducing the demand for foreign exchange, which is usually difficult to meet whenever there is a sharp drop in the price of oil. RT 200 FX programme Furthermore, on February 10 this year, CBN Governor, Mr. Godwin Emefiele, announced that the regulator, in collaboration with deposit money banks (DMBs), had introduced a fresh initiative aimed at reducing the nation’s exposure to volatile sources of foreign exchange and to earn more stable inflows. Emefiele said the scheme, code-named: “Race to $200 billion in FX Repatriation (RT200 FX Programme),†consisted of a set of policies, plans and programmes for non-oil exports, which would help the country attain its goal of $200 billion in FX repatriation, exclusively from non-oil export transactions over the next three to five years. He explained that the new initiative would have five key anchors namely value-adding exports facility, non-oil commodities expansion facility, nonoil FX rebate scheme, dedicated non-oil export terminal, as well as a biannual non-oil export summit. The CBN’s helmsman emphasised that the new initiative was introduced to address inadequate FX supply and constant pressure on the exchange rate, noting that the country’s four major sources of FX inflow -Proceeds from oil exports, proceeds from non-oil exports, Diaspora remittances and foreign direct/portfolio investments – had been negatively impacted by the COVID-19 crisis. Emefiele also pointed out that most of the sources of FX inflows were unreliable and perennially prone to the vicissitudes of global economic developments. He said: “I believe that the lessons we have learnt from our policies on remittances can be applied in improving some aspects of FX inflow into the country. For example, we have all been witnesses to the ever-changing fortunes of oilexporting countries. Even those that have been reputed to manage their oil proceeds well also suffer from major shocks once oil prices plummet. “In order to avoid these sudden adjustments to our economic life, we need to focus on strategies that can help us earn more stable and sustainable inflows of foreign exchange. We would need to follow the best practices of other countries and ensure that we protect ourselves a little bit from factors that are beyond our immediate control.†On the value-adding export facility of scheme, he said the CBN will provide concessionary and long-term funding for business people who are interested in expanding existing plants or building brand new ones for the sole purpose of adding significant value to non-oil commodities before exporting the same. “This is important because the export of primary unprocessed commodities does not yield much in foreign exchange. In Nigeria today, we produce about 770,000 metric tonnes of Sesame, Cashew and Cocoa. Of this number, about 12,000 metric tonnes are consumed locally and 758,000 metric tonnes are exported. “The unfortunate thing though is that out of the 758,000 metric tonnes that is exported annually, only 16.8 per cent is processed. The rest are exported as raw sesame, raw cashew and raw cocoa, thereby giving Nigerian farmers an infinitesimal part of the value chain in these products,†Emefiele said. He further explained that the non-oil commodities expansion facility, which is also a concessionary facility designed to significantly boost local production of exportable commodities, was aimed at ensuring that expanded and new factories that are financed by the valueadding facility are not starved of inputs of raw commodities in their production cycle. PAVE programme Aside from the RT 200 fx programme, CBN had in December 2017, launched a programme – Produce, Add Value, Export (PAVE) – that was also primarily aimed at ensuring that the country boosts FX earnings from non-oil exports. Commenting on the programme at a workshop for financial journalists held in Akure in March, Emefiele, who was represented at the event by the Deputy Governor, Corporate Services Directorate at the CBN, Mr. Edward Adamu, said the PAVE initiative was akin to south-east Asia’s much referenced export-led industrialisation policy, which changed the economic fortunes of countries such as South Korea, Taiwan, Malaysia and Singapore. He noted that when he assumed office in June 2014, the post global economic and financial crisis triggered acute capital flow reversals especially in emerging markets like Nigeria, leading to the country’s external reserves falling from a peak of $62 billion in 2008 to $37 billion, while the sharp drop in crude oil prices resulted in the nation experiencing a significant drop in monthly foreign earnings from about $3.2 billion to less than $1.0 billion. He said: “These adverse conditions eventually plunged the economy into a recession for the first time in about a quarter of a century. The media space was suffused with news about the depletion of the country’s foreign reserves and the depreciation of naira. That tough period called for bold and innovative decisions to be taken and we did not shy away from doing what we considered to be in the best interest of our beloved country.†Some of the decisions taken by CBN, according to Emefiele, was its establishment of an Investors and Exporters (I&E) Window, as well as the signing of a three-year bilateral currency swap agreement of $2.5 billion, equivalent to ¥15.0 billion or N720.0 billion with the Peoples Bank of China (PBoC). “It is heartening to note that these policies are yielding positive results in terms of meeting genuine demand for foreign exchange and exchange rate stability,†the CBN governor said. Still, while naira has been stable at the I&E window, the local currency’s persistent weakness at the parallel market continues to attract a lot of attention in industry circles. For instance, the subject was the major focus of a oneday roundtable on national issues organised by Development Specs Academy (DSA) in Abuja last month. Speakers at the event included the convener, Dr Okey Ikechukwu, a former spokesperson for the Nigerian Army, Brigadier Sani Usman (rtd.), a former secretary of the Catholic Secretariat in Nigeria, Rev. Fr. George Ehusani, Prof Jim Unah, Dr. Amaechi Anakwue, Prof. Christopher Ogbogbo, Dr. Amara Albert, Dr. Hyeladi Haruna, Dr Amaechi Anakwue, among others. Significantly, the consensus reached by experts at the session was that only increased productivity and a change in consumption patterns of Nigerians will ease pressure on naira. In his remarks, Ikechukwu noted that CBN had unveiled several interventions to improve the value of the local currency. “The bank is also said to have taken further hands-on measures, including the Anchor Borrowers’ Programme, which, he said, created and capacitated several farmers’ cooperatives and enhanced their access to loans. “This initiative alone has created millions of jobs, taken many youths off the crime path and rescued many local economies. Only economy-reflating and socially impactful efforts, as seen in such initiatives, in addition to consuming what we produce and producing what we consume, will give us the prospect of bringing up the value of the National Currency and keeping it up,†he said On his part, Brigadier Usman, who described the level of insecurity in the country as “unacceptable,†called for more strategic efforts towards ensuring the release of citizens held in captivity by terrorists. “Government should be proactive in information dissemination about what it is doing concerning those in captivity in various parts of the country,†he said