Report according to the investment and research arm of FBN Holdings showed that the Investors’ and Exporters’ (I&E) Forex Window has attracted $11.2 billion as at September 15.
The foreign exchange reserves which currently stand at $33 billion is expected to cover 8.1 months imports, when imports of services are added, it said.
The research firm said: “The pick-up in oil production has been an obvious positive for accumulation. Officials are encouraging the view that it is back at, or close to the 2.0 million barrels per day level. Further, the FGN may well return to the Eurobond market this year. The heavily-oversubscribed Iraqi sovereign issue last month without US guarantees was a reminder of the strength of the market.”
Continuing, it said: “On the basis of the balance of payments for 2016, reserves at end-August provided 10.8 months’ merchandise import cover. When we add imports of services, the cover is still 8.1 months,” it said.
The report explained that the Central Bank of Nigeria (CBN) will also be boosted by the signals from the I&E window, where turnover has continued to soar since it was launched in April 21.
The positive performance at the window has also been attributed to CBN’s policies, especially its instruction to banks and other authorised dealers to implement electronic Certificate of Capital Importation (eCCI) for foreign investors.
The Certificate of Capital Importation is given to foreign investors to confirm the level of investment they have brought into the country. The certificate has always been on hard copy until this policy shift.
The eCCI implementation, which takes effect tomorrow, is expected to boost transparency and enhance confidence of foreign investors in the local market. The foreign investors constitute about 70 per cent of the total transaction turnover in the capital market.
The eCCI would enable foreign investors to easily find out the status of their investments in the country, increase transaction efficiency and ensure that investors get adequate returns on their investments.
In a circular to all authorised dealers, CBN Director, Trade and Exchange Department, W. D. Gotring, said: “To enhance transparency and efficient processing of foreign investment flows to the country, the CBN informed all authorised dealers and the public of the deployment of electronic Certificate of Capital Importation (eCCI) platform.”
Continuing, he said the eCCI shall replace the hard copy of CCI normally issued in respect of all capital inflows either in form of cash or machinery/ equipment.
“The policy, takes effect from tomorrow, meaning that from this date, processing of all Certificate of Capital Importation in Nigeria shall only be done electronically on the eCCI platform,” he added.
Speaking also on the development, Head of Treasuries at Ecobank Nigeria, Olakunle Ezun, said the volume of capital inflows was likely to rise with the coming of eCCI, which is expected to cut off all processing bureaucracies that discourage investors.
He explained that before now, the CBN had appointed the Financial Market Dealers Association (FMDA) as the sole issuer of certificate of capital importation.
He said the banks buy booklets of Certificate of Capital Importation from FMDA and issue them to foreign investors. The Certificate of Capital Importation, Ezun added, allows the foreign investors to buy dollar at the official rate when they are repatriating their profits or exiting the economy.
“If any bank has a customer that brought dollar into the economy, such bank gets the CCI from FMDA and issues it to the customer. It helps the customer to access dollar from official rate official rate when he is exiting the economy,” Ezun said.
He said that the eCCI would take the market to the next level because the transactions were available for everybody to see.