The Central Bank of Nigeria (CBN), has directed Authorised Dealers and the general public on the use of forex exchange resources to avoid disruptions such as over-invoices, transfer pricing, double handling charges, and avoidable costs.
According to a statement released by the apex bank on August 24, titled ‘DESTINATION PAYMENT FOR ALL FORMs, LETTERS OF CREDIT AND OTHER FORMS OF PAYMENT’ and signed the Director of Trade and Exchange Department, Dr O.S. Nnaji, the CBN said that the development is aimed at ensuring that avoidable costs are not transferred to the average Nigerian consumers.
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The statement reads:
As part of the continued efforts by the Central Bank of Nigeria to ensure prudent use of our foreign exchange resources and eliminate incidences of over-invoices, transfer pricing, double handling charges, and avoidable costs that are ultimately passed to the average Nigerian consumers, Authorised Dearlers are hereby directed to desist from opening Forms M whose payment are routed through a company/agent or any other third party.
Accordingly 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. This Directive is with immediate effect.
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 the country. All the authorized Dealers shall use this mechanism to verify quoted prices before Form M are approved.
