The Central Bank of Nigeria (CBN) says it will no longer
approve payment of foreign exchange to form M applicants who do so through a
company and agent, thereby eliminating third parties.
According to a memo signed by O.S. Nnaji, the director of
trade and exchange department at the bank, the CBN will now pay the ultimate
provider of goods and services 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 memo
read.
“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 bank said the “directive is with immediate effect”.
CBN said 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.”
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