The Central Bank of Nigeria (CBN) has threatened to bar exporters who fail to repatriate their proceeds from further accessing the foreign exchange market.
This is in an apparent bid to shore up the nation’s dwindling foreign exchange liquidity.
To that effect, the apex bank has directed all banks in the country to submit the names, addresses and Bank Verification Numbers (BVN) of exporters that have defaulted in repatriating their exports proceeds, for further action.
The directive issued by the CBN Governor, Mr. Godwin Emefiele, yesterday during the Bi-monthly virtual meeting of the Bankers’ Committee, came on the heels of the announcement by the CBN of its abolition of third-party “Form M” payment.
The move by the CBN followed the adoption of the strategy to discourage over-invoicing, which some businesses have allegedly used to divert foreign exchange from the country, through the opening of “Forms M” for which payment are routed through a buying company, agent, or other third parties.
In the statement signed by the bank’s Director of Trade and Exchange, Dr. Ozoemena Nnaji, the CBN also explained that the directive was aimed at ensuring prudent use of Nigeria’s foreign exchange resources and eliminating over-invoicing, transfer pricing, double handling charges and avoidable costs that are ultimately passed to the average Nigerian consumer.
AbeyaNews recalls that the CBN had earlier on warned exporters conducting export activity against diverting their foreign exchange proceeds instead of repatriating them home.
The bank, in collaboration with the Bankers’ Committee, had threatened heavy sanctions against exporters who failed to repatriate foreign exchange proceeds from their international business.
The CBN stressed that its Foreign Exchange Manual provided that all exporters should repatriate export proceeds back to the country to support the local currency and boost the economy.
Market analysts told AbeyaNews that while a number of punitive options against defaulters are open to the CBN, the bankers’ banker may, in the interim, opt for barring such exporters from the foreign exchange market and other banking services.