In a significant move aimed at bolstering Nigeria’s export sector and addressing foreign exchange (forex) challenges, the Central Bank of Nigeria (CBN) has approved the use of the CFA franc for the repatriation of export proceeds. This decision, Naija247news gathered, is expected to streamline cross-border trade and provide relief to exporters grappling with forex liquidity issues.
Thank you for reading this post, don't forget to subscribe!According to Naija247news, the new policy allows Nigerian exporters, particularly those trading with Francophone West African countries, to receive payments in CFA francs. This development is seen as a strategic effort to deepen economic integration within the West African region and reduce dependency on the US dollar for international transactions.
Naija247news understands that the CBN’s decision comes amid persistent forex shortages in Nigeria, which have hampered the smooth repatriation of export earnings. By permitting the use of the CFA franc, exporters can now bypass the hurdles associated with converting their earnings into dollars before accessing the naira. This is expected to enhance trade efficiency and boost Nigeria’s non-oil export revenues.
Industry experts have lauded the move, noting that it aligns with the African Continental Free Trade Area (AfCFTA) objectives of promoting intra-African trade. “This is a game-changer for Nigerian exporters, especially small and medium-sized enterprises (SMEs) who often face delays and losses due to forex bottlenecks,” a trade analyst told Naija247news.
Naija247news reports that the policy is particularly beneficial for exporters of agricultural products, solid minerals, and manufactured goods, who frequently engage in trade with neighboring countries like Benin, Togo, Niger, and Cameroon. These nations, which use the CFA franc, are key trading partners under the Economic Community of West African States (ECOWAS) framework.
However, some stakeholders have raised concerns about potential challenges, including exchange rate volatility between the CFA franc and the naira. Naija247news gathered that the CBN is working on mechanisms to mitigate such risks, including the establishment of a transparent exchange rate framework for the two currencies.
The approval of the CFA franc for export proceeds repatriation marks a pivotal step in Nigeria’s efforts to diversify its economy and strengthen regional trade ties. As Naija247news understands, this policy could serve as a model for other African nations seeking to reduce their reliance on foreign currencies and foster economic collaboration within the continent.
