CBN to sanction exporters who fail to remit their foreign exchange back to Nigeria

NIGERIAN businesses who fail to repatriate foreign exchange proceeds from their international business will now face heavy sanctions under new guidelines being drawn up by the Central Bank of Nigeria (CBN).

After meeting yesterday, the CBN's Bankers’ Committee said the move was part of its effort to increase foreign exchange liquidity in the country. It, therefore, 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.

This directive issued by the CBN governor Godwin Emefiele, came barely 24 hours after the bank announced the abolition of third-party Form M payments. This will 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.

Dr Ozoemena Nnaji, the CBN's director of trade and exchange, 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. It is part of a programme that has seen the CBN warn exporters conducting export activity against diverting foreign exchange from the export proceeds, instead of repatriating it home.

With this latest move, the CBN, in collaboration with the Bankers’ Committee, had stressed that its Foreign Exchange Manual provided that all exporters should repatriate export proceeds back to Nigeria to support the local currency and boost the economy. With the recent collapse in crude oil prices and demand, Nigeria is desperately short of foreign exchange, being a mono-economy heavily dependent on the sale of petroleum products.