Tuesday, November 10, 2015

CBN Mulls Extra Fines For Banks Over Non-Remittance of Export Proceeds

Reports reaching Nairametrics suggests that the CBN could be mulling another round of fines for banks that failed to remit the foreign exchange earned from export proceeds.
The penalty could be targeted at export proceeds earned between July 2014 and April 2015, to the tune of 10% of the Free on Board (FOB) value of the export transaction.
The Central Bank of Nigeria (CBN) had earlier warned exporters to repatriate their earnings into their domiciliary accounts within a stipulated period or be barred from the foreign exchange market.
“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”, the CBN said in February.

Customs laments revenue loss due to CBN forex restriction policy

The revenue of the largest revenue collecting command of the Nigeria Customs Service (NCS) – the Apapa Area Command – plummeted for the third straight month due to the policy of the Central Bank of Nigeria (CBN) restricting sales of foreign exchange to the importers of 41 select items.
The Command’s Area Controller, Comptroller Charles Edike, told stakeholders in Lagos yesterday that the command collected N23.8 billion in September this year as against the N30.4 billion it collected in the corresponding period of last year, representing about 22% loss of revenue.
Edike also painted a gloomy picture when he declared that the situation would not get better anytime soon.
He attributed the decrease majorly to the low level of importation, which he said was as a result of some government policies, especially the CBN policy.
He said, “Since the CBN policy was rolled out, for the first three months, the remnant that came in were the ones we have been clearing but the remnant is now dwindling, finishing and so that explains why this month may not be as rosy as the previous month was.
“We also know that so many containers are trapped in the port. This month is not too rosy as at now and we all know the reason.
“The trend is not moving as it ought to move and importation is very low and that is the major reason because we only collect duty on things imported but when there is no importation, we cannot collect revenue.”
He also announced that the command would offer reprieve to importers whose goods were trapped at the port as a result of the implementation of the forex restriction policy.
“Before you import, you are supposed to get your proforma invoice with which you will approach your bank and the bank will help you with your Form ‘M’ to customs portal and then customs approves your form M, that is only when you can now import.
“When you import, before your goods arrive here, your papers would have been ready and that makes it pre-arrival. But many people would rather import and when the goods are about getting to our waters; that is when they will now start going to the bank to get Form M and begin to rush.
“Those set of people were the people that by the time the CBN policy (restricting sales of foreign exchange to importers of select imports) came, they were caught off guard and because there is no PAAR, we cannot clear them and they are trapped in the port.
“So that things will not get too bad, we want to grant conditional release to those containers that are trapped,” Edike said.
He added that after the conditional release, the importer would still be require to apply for PAAR to ascertain if the appropriate duty has been paid on the consignment.
“At the end of all this, you will still go for PAAR, and when the PAAR is gotten, then we will know whether you are paying more or less,” Edike said at the meeting he had with representatives of the freight forwarding associations and other stakeholders.
The organised private sector including the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) have all condemned the policy introduced by the apex bank on June 23.
“Significant disruptions, distortions and dislocations have been created in the business environment by the CBN as a consequence of the following policy measures: restrictions on the use of export proceeds, denial of access to foreign exchange market for 41 broad categories of products, including critical inputs needed in manufacturing and service sectors, prohibition of cash lodgements into domiciliary accounts and tight exchange controls and administrative allocation of foreign exchange are typically characterized by lack of transparency, corruption and considerable abuse,” President of LCCI, Remi Bello, said the chamber’s third quarter press conference.

CBN Refuses To Devalue Naira, Plans PAVE

Governor, Central Bank of Nigeria, CBN, Mr. Godwin Emefiele has restated that the CBN will not devalue the Naira anytime soon to revive the falling economy.

He said that the Bank has had to depreciate the currency from N155 to N197 in February, recalling that even President Mohammdu Buhari and Vice President Yemi Osinbajo had also re-echoed the position of the CBN.

Emefiele however stated that the CBN would soon launch a policy called PAVE meaning “Produce locally, add value  and export your product and earn your foreign exchange  for your imports” to help local industries.

He spoke to State House Correspondents after a meeting on the economy with the Vice President, Yemi Osinbajo at the presidential villa on Friday.

He said: “There has been a lot of talk on whether or not we want to depreciate our currency again.

The truth is that we had adjusted the currency by depreciating it from N155 to N197 in February this year.There is no intention to depreciate or adjust the currency any longer.

“The President has been very clear on this. The Vice President has been very clear on this and let me further reiterate our position at the Central Bank of Nigeria that we are not considering any further depreciation of the currency.

“What we are trying to concentrate on right now is how to improve and deepen the foreign exchange market by improving supply of foreign exchange into the market.

And to do so, we are trying to encourage people to export and earn your export proceeds and use your export proceeds to import whatever you need to import.

We are also concentrating on how to reduce the import of items that we can produce in the country today.

“So that is our focus. I’m saying and very soon the CBN will be launching a campaign called PAVE, which means “Produce locally, add value  and export your product and earn your foreign exchange  for your imports’’ because this is the only way we can support the efforts of CBN in intervening and providing foreign exchange in the market to meet the import needs of our people.

“It is very clear, what we need to do is reduce our propensity to import but we will not depreciate our currency. For now we will not.”

The governor also revealed that the CBN was working a list to exclude a number of items from foreign exchange market.

“First of all, the CBN does not have the power to ban the import of any item.
What we have done is to exclude certain items that are imported into the country from obtaining foreign exchange from the Nigerian foreign exchange market.

“Yes, it is also true we held a stakeholders’ meeting with the organized private sector and prominent and leading private sector stakeholder were at that meeting.

“It was not meant for the press. The purpose of that meeting was to engage the private sector to make the private sector understand that government realizes that they are engine of growth and we also used the opportunity to explain to them the basis and purpose of those policies that we have introduced and at the end of that meeting they were very happy, they saw our position and indeed at the end of that meeting some of them in fact  provided us with the names of some items that should be included in the list that should be excluded from foreign exchange.

“And I must confess that at this stage given the determination of some of the organized sectors to say that yes, they produce these items and that we should exclude those items from foreign exchange.

We are reviewing that list and we may in due course include more items products that can be produced in Nigeria in the list of items that will be excluded from foreign exchange in the Nigerian foreign exchange market”, he said.

Meanwhile he Naira on Friday depreciated further at the parallel market amidst intense regulation of the activities of operators of the Bureau de Change (BDCs) by the Central Bank of Nigeria (CBN).

The currency lost N0.5 to the dollar as it exchanged for N226.5, as against its previous value of N226.

The official exchange rate at the interbank window remained at N197 to the dollar.

Traders at the parallel market attributed the recent depreciation of the naira to the apex banks further tightening of the conditions of operation of the BDCs, making more people to access forex at the parallel market.

They said that the CBN now required operators of the BDCs to show the name of the person/company buying forex, his Bank Verification Number (BVN) and his ticket, if he was travelling.