CBN includes Fertilizer among Items Not Valid for Foreign Exchange
by Oru Leonard
The Central Bank of Nigeria (CBN), has added Fertilizer to the list of items not valued for Foreign Exchange, with effect from December 7, 2018, thereby increasing the list of items to 42.
The statement was contained in a letter by the Director, Trade and Exchange Department, Ahmed Umar, to all authorized dealers and the general public on Monday.
The CBN however said, that it will ensure that transactions (Form ‘M‘) on fertilizer for which payments are outstanding, are settled at the appropriate settlement dates.
According to Umar, “In the continued effort to sustain the achievement recorded from the classification of 41 import items as “Not Valid for Foreign Exchange” in the Nigerian Foreign Exchange Market, Authorised Dealers and the general public are hereby notified of the Inclusion of ‘Fertilizer’ on the list, effective Friday December 07, 2018. Please ensure strict compliance” he said.
In line with the Federal Government of Nigeria’s protectionist policy, the Central Bank of Nigeria has ensured its implementation as part of its developmental objective of employment generation and inclusive growth in Nigeria, on July 1. 2015, restricted the availability of foreign exchange to the importation of 41 items which could be competitively produced within the economy.
This policy according to the Bank, has resulted in massive investments and the establishment of cottage industries that now engage in the production of the restricted items across the country, noting that the growth and employment benefits have been phenomenal.
Meanwhile, the Director, Financial Policy and Regulation Department of the CBN, Kevin Amugo on Monday, revealed that trade information available to the CBN indicates the circumvention of the policy as the restricted items are being dumped in the country.
“The implications are that the growth and employment benefits arising from the policy may be eroded if not checked”, he remarked.
Amugo in letter to all banks on the Foreign Exchange restriction on the importation of 42 items, noted that the CBN views the development with trepidation, adding that the Economic Intelligence Unit of the Bank in collaboration with the Economic and Financial Crimes Commission would commence immediate investigation of the accounts of the corporates and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits.
“Such sanctions would among others include blacklisting the corporate and their directors; closure of their bank accounts; and restricting them from maintaining any bank accounts in any bank under the C BN remit. Banks that provided their platforms for such economic abuses would also be appropriately sanctioned.
“Banks are by this notice advised on strict compliance with the Know Your Customer (KYC) and Know Your Customer Business (KY3) requirements and to be properly guided, please”, Amugo concluded.
