CBN Ask Banks To stop Processing Import Documents For Maize

By Our Correspondent with Agency Report

The Central Bank of Nigeria has asked lenders to stop processing new trade documents for maize imports with immediate effect.

In a circular on Monday, the apex bank said it wanted to support the increase in local maize production, stimulate the economy and safeguard rural livelihoods lost as a result of the COVID-19 pandemic.

The CBN also asked banks to submit existing import documents, called Form M, opened for importation of maize by Wednesday.

Form M is a document to be completed by all importers into Nigeria. The documentation also enables lenders submit bids to the central bank for dollars to pay for imports.

Bankers estimate forex demand of around $2 billion from importers with past due obligation. Meanwhile the government is seeking to fund a balance of payment gap of around $14 billion in 2020, according to the central bank.

Dollar demand has been swelling and piling pressure on the naira. Importers with past due obligations have scrambled for hard currency while providers of foreign exchange, such as offshore investors, have exited.

The oil price crash caused by the coronavirus pandemic has exacerbated a shortage of dollars for Nigeria.

Last week the naira eased on the official market, losing 5.5 per cent against the dollar after the central bank adjusted the currency, in its second adjustment in six months.

Data from the U.S. Department of Agriculture estimate Nigeria’s maize imports at 400,000 metric tons (MT) for 2019/20 against a consumption of 10.7 MT over the forecast period.

Nigeria imports maize mainly from the U.S.

The apex bank in August told lenders to stop processing milk imports on a credit basis after it said it would ban access to forex for dairy to spur local production. It later lifted forex restrictions for milk imports for six firms.