The Central Bank of Nigeria (CBN) has said that it would henceforth verify the prices of goods and services from the supplier abroad before approving forex for the importer. This is even as the bank said it would no longer approve payment of foreign exchange to Form M applicants who apply through an agent, thereby eliminating third parties.
The move by the CBN is seen as part of its efforts to reduce pressure on the Naira, which has crashed by more than 30% in the past six months.
CBN Director of Trade and Exchange, O.S. Nnaji, said in a memo that the apex bank will now directly pay forex to the ultimate provider of goods and services.
The memo reads: “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.
“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.
“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. All authorised dealers shall use this mechanism to verify quoted prices before Forms M are approved.”
The new directive, the apex bank said, is with immediate effect.