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The Central Bank of Nigeria (CBN) has said 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 apex bank’s Director, Trade and Exchange Department, Dr. O.S. Nnaji, said the CBN will now pay the ultimate provider of goods and services the forex directly.
“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 memo read.
“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 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.
“All authorised dealers shall use this mechanism to verify quoted prices before Forms M are approved,” the bank added.