CBN Pursues Forex Stability, Approves New Policies To Discourage Abuse
By UDO ONYEKA
The Central Bank of Nigeria, CBN, has said approval payment of foreign exchange will no longer be granted to form M applicants who do so through third parties.
The CBN said this in a circular signed by Director, Trade and Exchange Department, O.S Nnaji
According to the apex bank, the ultimate provider of goods and services will henceforth receive the forex directly.
“As part of continued efforts by the Central Bank of Nigeria to ensure prudent use of foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing, double handling charges, and avoidable costs that are ultimately passed to the average Nigerian consumers, Authorised dealers are hereby directed to desist from opening of Forms M whose payment are routed through a buying company/agent or any other third-parties,” the circular said.
“All authorised dealers are hereby requested to only open form M for letters of credit, bills for collection and other forms of payment in favour of the ultimate supplier of the product or service”.
The directive, according to the regulatory bank is with immediate effect.
Also the CBN disclosed it will now follow global best practices by verifying prices before approving forex for the purchase of goods and services abroad.
“Additionally, in line with best practices around the world, the CBN will be immediately introducing a Product Price Verification Mechanism to forestall over-pricing and/or mispricing of goods and services imported into country,” the bank added.
“All authorised dealers shall use this mechanism to verify quoted prices before Forms M are approved”, the circular noted.
