CBN bars fertiliser from Forex access

*decries abuse of forex restriction on 41 items

The Central Bank of Nigeria (CBN) on Monday barred official foreign exchange (Forex) allocation to fertiliser imports.

In a circular dated October 10, 2018 and signed by the Director Trade & Exchange Department, Ahmed Umar, it said the inclusion of fertiliser on not valid for foreign exchange becomes effective from last Friday (December 7 2018).

The circular however noted that the “CBN will ensure that transactions (Form M) on fertiliser for which payments are outstanding are settled at the appropriate settlement dates.”

In another letter to all banks dated 10th December 2018, titled “foreign exchange restriction on importation of 42 items” and signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, the apex bank decried the circumvention of policy restriction on the 41 items.

“Trade information available to the CBN indicates the circumvention of the policy as the restricted items are being dumped on the country. The implications are that the growth and employment benefits arising from the policy may be eroded if not checked.

“The CBN views this with trepidation. The economic intelligence unit of Bank in collaboration with the Economic and Financial Crimes Commission (EFCC) would commence immediate investigation of the accounts of the corporate entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits.

“Sanctions would among others include blacklisting the corporate entities and their directors; closure of their bank accounts; and restricting them from maintaining any bank accounts in any bank under the CBN remit. Banks that provide their platforms for such economic abuses would also be appropriately sanctioned,” the CBN letter stated.

The letter also advised the banks to maintain strict Know Your Customer (KYC) and know your customer’s business to avoid sanctions.

It would be recalled that the CBN had on January 1, 2015 restricted the availability of foreign exchange to the importation of 41 items which could be produced in Nigeria.

The CBN said the policy has resulted in massive investments and the establishment of cottage industries that now engage in the production of the restricted items across the country, thereby generating employments as well.