By Meletus EZE
The Bankers’ Committee on Thursday encouraged importers trading with industries in China to take advantage of the incentives from the bilateral currency swap agreement between Nigeria and China.
The Managing Director of Stanbic IBTC, Dr Demola Sogunle, gave the advice while briefing newsmen on the outcome of the Bankers’ Committee meeting in Lagos.
Sogunle said Nigerian importers trading with Chinese industries should demand for Renminbi instead of dollars.
He said the idea was to start receiving invoices from importers in order to benefit from incentives that would soon be introduced.
He, however, said the incentives had yet to be determined but added that one of it would be in percentage spread once commenced.
Sogunle said: “One of the incentives will be a percentage spread which has yet to be determined.It will be given to any importer that is bringing Remininbi invoice for settlement instead of bringing a dollar invoice.
“So, when you look at the overall cost in terms of Naira, it is going to be cheaper for the importer coming to the Central Bank of Nigeria (CBN) to get foreign currency which in this case will be Renminbi.”
According to him, the importers demanding for the chinese currency will bring lesser amount of Naira for exchange and higher for dollar.
“If he goes ahead to bring from the same supplier based in China, maybe in Beijing in dollar, it is going to cost the importer slightly more in terms of the Naira he is going to use to get the foreign currency,” he added.
The Stanbic IBTC boss said the nation had got almost 48 billion dollars because it traded a lot with China and being its largest trading partner.
He also said if the country was able to continue to bring in machinery and equipment, without depleting its dollar reserves, then the external reserves would not be under threat.
“So, with the 15 billion Remininbi in place based on this bilateral swap, we are in very good position and that is why it is important to encourage importers to bring invoices in Remninbi instead of dollars.
“Anytime invoices are obtained in dollars for import that is going to come from China, there is usually at least 10 per cent mark-up and that 10 per cent is a minimum,” Sogunle said.
Also, the Managing Director of First Bank Plc, DrAdesolaAdeduntan, said the meeting also centredaround the importance of financial inclusion in alleviating poverty across the country.
Adeduntan said there had been a significant progress particularly in the area of licensing super agents.
He hinted that plans were underway to on-board 40 million additional customers into the formal banking sector within the next three years.
Ealier, the Director, Banking Supervision of the CBN. Mr Ahmad Abdullahi, said the committee recognised the mixed signals that were coming from the global economy such rise in the U.S. interest rates and the impact of trade wars on the Nigerian economy.
Among others he noted was the tax cut in the U.S. and capital outflow from emerging an economy like Nigeria.
He said: “We recognise the positive outlook of the domestic economy – inflation coming down to 11.6 per cent, reserves grown to 48 billion dollars and the GDP estimated grow to 2.4 percent in 2018.
“Generally, the bankers committee recognise that the CBN has enough arsenal to ensure that we have stable exchange rates and that any demand for Foreign Exchange will be met to ensure liquidity in the Forex Market.”
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