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CBN threatens action against exporters over non-repatriation of forex
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Analysts say that a number of punitive options are open to the CBN, including, but not limited to, barring the exporters from the foreign exchange market and other banking services.
The Central Bank of Nigeria (CBN), on Tuesday, 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. According to a statement by the CBN, the directive was part of its effort to increase foreign exchange liquidity in the country.
The directive was issued by the CBN Governor, Godwin Emefiele, during the Bi-monthly virtual meeting of the Bankers’ Committee, which is a club comprising bank CEOs, directors of the different departments of the CBN, with the CBN governor as chairman. The new directive on repatriation of export proceeds came barely 24 hours after the reserve bank announced the abolition of third-party “Form M” payment.
The CBN said its latest effort 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.
The statement signed by the CBN’s Director of Trade and Exchange, Ozoemena Nnaji, explained that the directive was aimed at ensuring prudent use of Nigeria’s foreign exchange resources and the elimination of incidences of over-invoicing, transfer pricing, double handling charges and avoidable costs that are ultimately passed to the average Nigerian consumer.
The CBN had previously warned exporters against diverting foreign exchange from the export proceeds, instead of repatriating same to the country. In collaboration with the Bankers’ Committee, the apex bank 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.
According to the new statement by CBN sent to Financial Nigeria, analysts say that a number of punitive options are open to the CBN, including, but not limited to, barring the exporters from the foreign exchange market and other banking services.
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