Nigeria, for over five years now has persistent balance of payment problems. The forces that shaped the balance of payments are numerous and varied. Over the years, such basic real factors as resource endowment, the state of technology and consumer preference – in each case both at home and abroad – exert a decisive influence.
Most of the problems associated with Nigeria’s b balance of payment relations with other countries however arise out of shorter run influences of monetary or cyclical character. Among the most important of these are exchange rates, price levels, income levels of autonomous earnings from exports. Foreign exchange earnings are important to any country because for any country in the world to make international payments, she needs it. Foreign exchange is provided by a variety of transactions the main categories of which are the export of goods and services, an inflow of capital from abroad, unilateral transfer receipt and gold exports. Nigeria’s main sources of same is from oil and non-oil export and loans from abroad.
Foreign exchange is needed to pay for imported goods and services, to finance capital payments and to pay for any gold imports.
A country’s international monetary problems arise out of the relationship between these sources and uses of foreign exchange and their inter-connection with domestic economic and monetary affairs.
Nigeria, today faces foreign exchange problem as a result of capital outflow, huge imports of the past and unilateral transfers.
Nigeria as a nation is endowed with various material resources from which she can earn a lot more foreign exchange. These resources have not been fully exploited given management and control is enough to make the country truly great and see no one suffer. Sad enough, this is not the case.
For quite sometime now, the export of non-oil products has been a cause for a running battle between the Central Bank and exporters. As a result of generous package of incentives given to exporters in order to encourage them to export more to earn high foreign exchange for the country, the exporters have taken undue advantage of the provision and refuse to bring home the proceeds of their export.
The CBN concerned for this betrayal have resorted to writing letters daily to authorise dealers informing them of embargo on defaulting companies.
The CBN, a paper tiger has not relented in its effort but their effort is not just enough to deter exporters
The CBN for instance only monitor exporters who open letters of credit with their bankers who in turn send same to CBN in their frequent returns to the bank. But a good number of these exporters are known to have bought large quantities of Nigerian commodities and export them through the borders without going through the banks.
It is estimated that half of agricultural products produced in Nigeria are exported through this means.
As a result, a large proportion of foreign exchange rightly due to Nigeria is denied her.
The foreign exchange repatriation problem is further compounded by the fact that some exporters have huge resources to finance their export directly.
They do not ask for bank loan and have no cause to go through local banks.
What this class of exporters do is to ask their foreign banks to open letters of credit in their foreign office name and credit them directly. In that case, they may not register a little amount with local banks and that is all.
The monetary authorities have no way of finding out true position of things especially in a country like Nigeria where data are not available on regular and current basis. The Nigeria export business is known to be the most corrupt, especially with the present level of moral decadence in the economy. Exporters are known to bribe top government officials in order to help them reverse punishment meted out to them.
Top government functionaries are known to see through export items out of the country’s border without official escort.
This, of course, the CBN cannot do anything about. The bank cannot equally ask exporter of banks under its control why exporters have asked for relatively little financing when apparently its exportable items are much more than what it asked for.
The CBN can hardly determine the foreign exchange value of export handled by exporters as the prices of primary products very everyday as there is no unit at the bank at present to monitor the prices of Nigerian products at the international market.
The CBN-Exporter situation seem a little bit tricky, f or one thing it will not be in the interest of the present deregulation of the economy to impose an administrative control of export. That would mean going some steps back on the free market enterprises. For another, there seems to be no data bank to ascertain foreign exchange coming into the country and those going out.
Some of the exporters have accused the CBN of not checking its fact properly before clamping embargo on them.
One exporting company revealed that it was wrong accused of non-repatriation of foreign exchange proceeds post-SFEM while in actual fact it repatriated everything.
