Don't Miss


Home   >   Business   >   CBN warns exporters against misusing earnings

CBN warns exporters against misusing earnings

By on February 24, 2015

The Central Bank of Nigeria says any exporter that uses export proceeds for non-eligible transactions will be barred from the foreign exchange market.

In a circular on its website on Sunday, the CBN’s Director, Trade and Exchange Department, Mr. Olakanmi Gbadamosi, said it had become imperative to clarify the term “unfettered access” as contained in the provisions of Memorandum 26, Paragraph (5), Section D of the foreign exchange manual, following different interpretations of the provisions.

He said, “For the avoidance of doubt, all authorised dealers and the general public are to note that, henceforth, the term ‘unfettered access’ granted to holders of export proceeds domiciliary accounts shall be strictly construed to mean that the proceeds of exports in the account can only be used by the exporters to finance eligible and other trade-related transactions supported with appropriate documentation.”

The proceeds, according to the CBN, can also be sold to authorised dealers (banks) for eligible transactions only.

“Any exporter that, henceforth, utilises the export proceeds for non-eligible transactions will be barred from the foreign exchange market in Nigeria. Please, be guided accordingly and ensure strict compliance,” the CBN said.

The bank had on Thursday warned exporters who failed to repatriate their earnings into their domiciliary accounts within the stipulated period would be barred from the forex market.

It stated, “Proceeds of oil and non-oil exports are to be repatriated into the export proceeds, domiciliary accounts of their respective exporters’ accounts within 90 days for oil exports and 180 days for non-oil exports, failing which the collecting banks will be liable to a fine of 10 per cent of the FOB value of the transaction, including other appropriate penalties as provided in the BOFIA of 1991, as amended.”

 

[Punch]

One Comment

  1. Mr Concern

    February 25, 2015 at 5:41 pm

    Its a shame that CBN is coming hard on the only set of people who are bringing FX to Nigeria. If you ask me, which exporter will not want to brinng FX into the country at this crucual time. What remains questionable is the fact that they are mandated to sell to the banks by force. This is a disinsentive to exporters or would be exporters. The market forces should be allowed to take its channel. CBN interbank fund should be restricted to only value adding imports and not importation of tooth picks and other unreasonaboe items.
    The little gains made in the export market which has contributed to the non-oil proceeds will be wipped away in the next few days. Why should exporters be funding reckless imports. If you want to import any item that is not valid for Foreign exchange, you buy from the exporters at the exporters price. If this is done, with time, people will think twice before importing any item. Over a period, the market forces will drive the value of dollar down and the Naira will automatically appreciate in the parallel market because more companies will be exporting and getting dollars to service the parallel market.
    However if the this circular holds, the import frenzy will continue and it will further put more presure on the country’s reserve while there will be short supply of dollars to service the parallelm market . Naira might depreciate to as high as 270 in the parallel market in the coming weeks.
    I hope the leaders of the Apex bank think thrice before punishing the only golden eggs left