The Central Bank of Nigeria on Tuesday threatened to sanction exporters that failed to repatriate their export earnings from their international business transactions as foreign exchange scarcity continues to undermine its efforts on Naira exchange rate stability against foreign currencies and improve the nation’s foreign reserves.
The apex bank gave the hint through a directive issued by the Governor, Mr. Godwin Emefiele, during the Bi-monthly virtual meeting of the Bankers’ Committee barely 24 hours after the Bank announced the abolition of third-party “Form M” payment.
To demonstrate its seriousness on sanctioning erring exporters, it 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 measure by the CBN was sequel to 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.
A statement issued on the directive signed by the Bank’s Director of Trade and Exchange, Dr. Ozoemena Nnaji, indicated 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 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.
It would be recalled that the apex bank had earlier warned exporters conducting export activity against diverting foreign exchange from the export proceeds, instead of repatriating same.
Financial market analysts yesterday commended the apex bank for its sundry measures to tackle the age-long sharp practice of forex exchange over-invoicing.