CBN Reveal Sanction Options For Exporters Refusing To Repatriate Export Proceed

The Central Bank of Nigeria (CBN) might bar some exporters for failing to repatriate their export proceeds, as the apex bank request for names, addresses, and bank verification numbers (BVN) of defaulters. This comes a day after the CBN announced that it will no longer deal with third parties for forex applications.

The CBN said exporters avoid repatriating their proceeds and such action doesn't help the economy, neither does it strengthen the naira. This prompted the CBN governor Godwin Emefiele to direct deposit money banks to submit the defaulters' list for possible sanctions.

CBN has been busy releasing policies this week, and it said the clampdown on defaulting exporters will ensure Nigeria's foreign exchange resources are well utilised and prevent diversion of export proceeds which should serve as a foreign exchange to the country.

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CBN Weighing Several Sanctions Against Defaulters

The CBN had warned defaulters and threatened to sanction them if they don't desist from hoarding their export proceeds or fail to repatriate their proceeds to the country. Now, AllNews gathered that the CBN is weighing several sanctions against the defaulting exporters.

In a statement signed by the Director of CBN Trade and Exchange Department, Ozoemena Nnaji, it was learnt that the sanctions include “but not limited to, barring the exporters from the foreign exchange market and other banking services”. The CBN governor gave the directive during the bi-monthly virtual meeting of the bankers’ committee.

AllNews had reported that the COVID-19 pandemic and global economic lockdown had affected Nigeria's forex balance as major foreign exchange sources like aviation industry stopped operation, while the oil revenue was severely affected by the oil price war between Saudi Arabia and Russia, as well as the low demand for oil amidst the pandemic - both of which crashed oil price.

These factors have prompted the CBN to tighten the grip on foreign exchange and limit accessibility to only essential goods that can't source their materials in Nigeria. Just yesterday, August 25, 2020, the CBN announced that it will no longer accept third party applications for forex.

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Why CBN Eliminated Third Party Forex Applications?

Individuals or organisations with Form M who apply for forex through third parties such as companies and agents will no longer have access to forex as the Central Bank of Nigeria (CBN) tightens its grip on the disbursement of forex. The new policy by the CBN is to eliminate third parties in the process of acquiring forex.

AllNews gathered that CBN now wants to deal directly with the companies or applicants in need of forex and not a third party. This will enable CBN to track the disbursement and ensure prudent use of the forex. The decision is also expected to prevent double-handling as well.

Third-party collection of forex often affects the market price of goods and services as third parties place their fee for the collection of the forex on behalf of the applicant in need. The third-party financial cost are often placed on consumers, and the CBN in a statement wants to curb the culture.