CBN ends forex for fertilizer importation, raises concern over banks sharp practice

The Central Bank of Nigeria (CBN) in a circular ‘Inclusion of some imported goods and services on the list of items not valid for forex in the Nigerian forex market.’ released yesterday has added fertilizer to the list of 41 import items classified as ‘not valid for foreign exchange’ in the Nigerian forex market effective from December 7 2018.

The apex bank however added that it would ensure that transaction (Form M) on fertilizer “for which payments are outstanding are settled at the appropriate settlement dates.”

Recall that on July 1 2015, the apex bank restricted the availability of foreign exchange to 41 items which could be competitively produced within the economy. The policy by the CBN has resulted in massive investment and the establishment of several cottage industries that now engage in the production of the restricted items across the country.

The CBN however raised an alarm over activities of some banks which may erode the benefits and gains of the restriction policy if not nipped in the bud. The apex bank noted that unfortunately, trade information available to it indicated the circumvention of the policy as the restricted items were being dumped in the country.

According to CBN

“The CBN views this development with trepidation. The Economic Intelligence Unit of the bank in collaboration with the Economic and Financial Crimes Commission (EFCC) would commence immediate investigation of the accounts of the corporate and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits.”

“Banks that provided their platforms for such economic abuses would also be appropriately sanctioned.”

It however vowed to impose heavy penalty on financial institutions found culpable. Such sanctions include blacklisting the corporate and their directors; closure of their bank accounts; and restricting them from maintaining any bank account in any bank under the CBN remit.

Source: Nairametrics

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