Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has issued a circular removing buying agents/companies or any third parties from accessing its SMIS forex window through FORM M forex purchases.
In a circular dated August 24, 2020, the apex banks instructed authorized dealers to desist from opening of Form M whose payment are routed through a buying company/agent or any other third parties. This new policy framework effectively eliminated third parties or middlemen from transacting in forex deals in its official SMIS window.
The apex bank explained that its decision was based on the need to ensure prudent use of our 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.
It also instructed authorised dealers to only open FORM M for Letters of Credit, Bills for Collection, and other forms of payments in favour of the ultimate supplier of the product or service.
The CBN also revealed it will be introducing a “Product Price Verification Mechanism to forestall over-pricing and/or mispricing” of goods and services imported into the country.
The bank wants all authorized dealers to use the mechanism to verify quoted prices before FORM Ms are approved.
