The Central Bank of Nigeria on Friday warned foreign exchange dealers against undue delay in repatriating proceeds from oil and non-oil exports to the domiciliary accounts within the stipulated time.
The CBN’s director of Trade and Exchange department, Olakanmi Gbadamosi, said failure to adhere to the provisions of the Memorandum on the Foreign Exchange Manual would attract severe sanctions.
The manual requires dealers to repatriate the proceeds for oil exports within 90 days, and those for non-oil exports within 180 days.
Mr. Gbadamosi said collecting banks risk a fine of 10 per cent of the value of the transaction for failure to ensure that the repatriated funds hit the exporters’ domiciliary accounts within the stipulated period.
According to him, the fine would also include other appropriate penalties in line with the provisions of the Banks and Other Financial Institutions Act, BOFIA Act 1991, as amended.
“Where an 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 the foreign exchange market in Nigeria,” Mr. Gbadamosi warned.
The warning is part of the effort by the CBN to plug loopholes that could be exploited by operators in the foreign exchange market engaging in speculative activities that fuel attacks on the national currency.
This is coming few days after the CBN announced its decision to shut-down the twin foreign exchange auction windows and limit official retail and wholesale FOREX trading to the interbank market to stem the pressures on the Naira.
Reviewing the impact of the CBN’s closure of the foreign exchange auction windows, deputy director of communication, Ugochukwu Okoroafor, said in the short to long term it would eliminate multiple exchange rates, replacing with a single exchange rate consistent with global practice.
The decision, Mr. Okoroafor, said has removed discriminatory pricing in the market, as everyone interested in foreign exchange would now be buying from the same market.
This, he said, would help moderate the level of dependence on other foreign exchange markets by operators for speculative purposes.
“It will also give a lot of boost to local producers, and by extension promote the growth of the local economy as well as improve the standard and quality of products and services. This is what Nigerians need to have a more qualitative and competitive economy,” he said.
On the directive on repatriation of export proceeds, Mr. Okoroafor said anyone using foreign exchange to do export processing were expected to make returns to enable the CBN replenish the stock of foreign available in the market.
“If one takes foreign exchange and not repatriate the proceeds, it is bad market practice, which is against the law.
“These is an existing rule. The CBN is merely reiterating the fact that the quicker people repatriate funds taken for business, the better for the system and everybody,” he said.