CBN to sanction exporters withholding forex proceeds

CBN to sanction exporters withholding forex proceeds

The Central Bank of Nigeria (CBN) is threatening to sanction exporters who fail to repatriate foreign exchange (forex) proceeds from their businesses into the economy.


CBN Director (Banking Supervision) Abdullahi Ahmad, who issued the warning yesterday during the Bankers’ Committee meeting in Lagos, spoke of a provision in the CBN Foreign Exchange Manual that mandates all exporters to repatriate their proceeds back to the country to support the local currency and the economy.

The manual stipulates that proceeds of oil and non-oil exports are to be repatriated into the export proceeds domiciliary accounts of their exporters’ accounts within 90 days for oil exports and 180 days for non-oil exports. Where this policy is violated, the collecting bank will be liable to a fine of 10 per cent of the Free On Board value of the transaction, including other appropriate penalties as provided in the Banks and Other Financial Institutions Act.

Likewise, where the exporter fails to repatriate the proceeds into the domiciliary account within the stipulated period, the exporter will be barred from participating in all the segments of foreign exchange market in Nigeria.

Ahmad said many exporters, who benefited from Federal Government’s support scheme, continually failed to comply with this directive, adding that the defaulters would be barred from other banking services.

He said the CBN had continued to take strategic steps to ensure that Nigeria exporters’ businesses thrived and that not sending earned dollar back to the economy was not proper.

He said the Gross Domestic Product (GDP) growth of 0.5 per cent, which brought the country out of recession, needed to be improved on, and called for more hard work to achieve better growth for the economy.

The stability in the foreign exchange market, moderation in inflation and capital market recovery are indications that the economy is getting better, Ahmad said.

Also speaking, Unity Bank Managing Director/CEO Mrs. Tomi Somefun said the disbursement of N26 billion special fund for players in the agricultural sector would begin at the end of this quarter. The fund, first announced in June, was part of the banks’ plan to finances agro-based small and medium scale enterprises (SMEs).

The contribution follows the directives of the CBN to all commercial banks to remit five per cent of their annual after-tax profit in support of a scheme as part of the guidelines for the Operations of the Agricultural/Small and Medium Enterprises Investment Scheme (AGSMEIS). The programme was first approved at the 331st Bank’s Committee meeting, held on February 9th this year.

Also speaking at the Bankers’ Committee meeting, Managing Director/CEO Emeka Emuwa said the Bankers’ Committee was also worried about the return of ponzi scheme- Mavrodi Mundial Moneybox (MMM).

He said such schemes always thrived when the end of the year approaches. “The Ponzi schemes are back and more about them as the year comes to an end,” he said.

According to the Union Bank boss the CBN has instituted the collateral registry to help SMEs access funds, and create more jobs. “The Collateral Registry is going to facilitate lending to the SMEs and also boost employment,” he said.

The Bankers’ Committee praised the CBN for the stability achieved in the foreign exchange market, adding that the apex bank had been steadfast in executing its policies.