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CBN to punish non-compliant exporters

The Central Bank of Nigeria (CBN)-backed Bankers’ Committee yesterday announced the commencement of sanctions against exporters who fail to repatriate Foreign Exchange (forex) proceeds from their business into the economy. The sanctions will be implemented by the apex bank.

Addressing financial journalists at the end of the Bankers’ Committee meeting in Lagos, Citibank Nigeria Managing Director/CEO Akin Dawodu spoke of a provision in the Central Bank of Nigeria (CBN) Foreign Exchange Manual that mandates all exporters to repatriate export proceeds back to the country to support the local currency and the economy.

There is a 90-day grace period during which all proceeds from non-oil exports must be repatriated to the country and all arrears cleared. Dawodu said after the moratorium, non-compliant exporters will be blacklisted and banned from accessing banking services as well as forex from the CBN.

He said repatriating export proceeds will boost Nigeria’s balance of trade.

Also speaking, CBN Director, Banking Supervision, Abdullahi Ahmad, said the apex bank is monitoring non-oil exporters and assessing compliance levels. “The period of grace is gone and now is the time for heavy sanctions against defaulters. Defaulters will be banned from accessing banking services,” he said.

Nigeria’s foreign exchange reserves have hit $42 billion, according to Ahmad, who added that the economy remained at its lowest risk rating at present.

“Nigeria’s capital market is the best in the world; inflation has been coming down, even as Gross Domestic Product (GDP) growth is expected to be sustained above two per cent,” he said.

External reserve was $40.4 billion as at last December. The last time the foreign reserves hit the $40 billion mark was January 2014, about five months before the crash in global oil prices. In September 2008, the country’s foreign exchange reserves hit $62 billion, with the Federal Government spending $12 billion from it to settle external debts.

FSDH Merchant Bank Managing Director Mrs. Hamda Ambah said the Bankers’ Committee also adopted a unified rate N360/$ for all Personal Travel Allowances (PTAs), Basic Travel Allowances (BTAs), school fees and transactions without commission.

She said the committee also urged bank customers to report any defaulting lender for appropriate sanctions. The banks are to buy dollar from the CBN at N357/$1 and sell to end-users at N360/$1.

According to the CBN manual, proceeds of oil and non-oil exports are to be repatriated into the export proceeds domiciliary accounts of their exporters’ accounts within 90 days for oil exports and 180 days for non-oil exports. Where this policy is violated, the collecting bank will be liable to a fine of 10 per cent of the Free On Board value of the transaction, including other appropriate penalties as provided in the Banks and Other Financial Institutions Act (BOFIA).

Likewise, where the exporter fails to repatriate the proceeds into the domiciliary account within the stipulated period, the exporter will be barred from participating in all the segments of foreign exchange market in Nigeria.

Ahmad said many exporters, who benefited from Federal Government support scheme, have continually failed to comply with this directive. The defaulters will be barred from accessing other banking services.

To Ahmad, since the CBN is taking strategic steps to ensure that Nigerian exporters’ businesses thrive, not sending earned dollar back to the economy is not proper.


This post first appeared on Chrisblend, please read the originial post: here

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CBN to punish non-compliant exporters

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