Post by Trade facilitator on Feb 23, 2021 15:25:53 GMT 1
CBN Vows To Prevent Exporters Who Have Un-repatriated Export Proceeds From Carrying Out Banking Services In Nigeria
With effect from January 31st, 2021, the Central Bank of Nigeria will no more allow exporters who fail to repatriate their export proceeds to access banking services across the country.
Please remember that the CBN has a standing policy which instructs exporters to repatriate their export proceeds into their various domiciliary accounts with their various banks in the country.
The policy has it that if you are an exporter of oil and gas, you must repatriate your proceeds within 90 days, and if you are an exporter of non-oil goods, you have 180 days to repatriate your export proceeds. If any exporter fails to do this, he or she has gone against the law that established this policy.
According to some banks, the CBN has sent out a circular instructing them that they should bar any exporter who fails to fully repatriate the export proceeds on or before January 31st, 2021 from enjoying any banking services in the country.
Please see the contents of the circular below barring exporters with un-repatriated export proceeds from enjoying banking services.
“Please be informed that the Central Bank of Nigeria (CBN) through its circular referenced TED/EXP/CON?NEX/01/001 dated 13th January 2021 has instructed that all exporters with un-repatriated export proceeds before 31st January 2021 should be barred from accessing all banking services.”
This means that as an exporter with un-repatriated export proceeds, you need to expedite action in repatriating your export proceeds not yet brought into your domiciliary account in the country before that date.
This issue is more than the ordinary eyes can see. Does it mean that Nigerian exporters just refused to repatriate their export proceeds or that they have an issue to sort out with the authorities concerned on this matter?
The Central Bank believes that by repatriating their export proceeds through the Nigerian Foreign Exchange window (Investor and Exporter window) that there will be liquidity in the market. This will in turn strengthen the naira rate at the black market.
There had been this controversy between the Central Bank of Nigeria and stakeholders of the export community regarding this controversial export policy. This issue has forced many exporters, especially small scale exporters to abandon the business entirely due to non-workability of the policy.
Others have gone underground to carry out the business informally, as they said that it is impossible to do export business following the policy of the CBN on the repatriation of export proceeds.
The simple process involved here is that exporters will source their export commodities at the ruling market price, because all export commodities are priced at the ruling market rate which reflects the black market rate.
Then the exporters will incur additional charges which include shipping and documentation, when the transaction is completed and the export proceeds are paid into the domiciliary accounts of the exporters. When the exporters want to withdraw their money, the CBN pays them at the official exchange rate.
The exporters bought their commodities at black market rate, and are paid at the official exchange rate by the apex bank. How can this work?
The authorities should look into this matter and see that there is no way this can work, as no sane business person will go into business that the loss is clear from day one.
From reports that abound all over, revenue from the non-oil sector will continue to drop if something is not done urgently to arrest the ugly situation.
The country needs the foreign exchange that comes from the non-oil sector badly to help in stabilizing the exchange rate of the naira.
A typical example is the new policy of the CBN that all funds from the diaspora must be paid to the beneficiaries in US Dollars. This policy will in the long run encourage people abroad to send money home as they are sure of getting value from their sweat.
We hope that the Federal Government and the Central Bank of Nigeria will have a rethink and tinker with the policy to accommodate all parties involved.
With effect from January 31st, 2021, the Central Bank of Nigeria will no more allow exporters who fail to repatriate their export proceeds to access banking services across the country.
Please remember that the CBN has a standing policy which instructs exporters to repatriate their export proceeds into their various domiciliary accounts with their various banks in the country.
The policy has it that if you are an exporter of oil and gas, you must repatriate your proceeds within 90 days, and if you are an exporter of non-oil goods, you have 180 days to repatriate your export proceeds. If any exporter fails to do this, he or she has gone against the law that established this policy.
According to some banks, the CBN has sent out a circular instructing them that they should bar any exporter who fails to fully repatriate the export proceeds on or before January 31st, 2021 from enjoying any banking services in the country.
Please see the contents of the circular below barring exporters with un-repatriated export proceeds from enjoying banking services.
“Please be informed that the Central Bank of Nigeria (CBN) through its circular referenced TED/EXP/CON?NEX/01/001 dated 13th January 2021 has instructed that all exporters with un-repatriated export proceeds before 31st January 2021 should be barred from accessing all banking services.”
This means that as an exporter with un-repatriated export proceeds, you need to expedite action in repatriating your export proceeds not yet brought into your domiciliary account in the country before that date.
This issue is more than the ordinary eyes can see. Does it mean that Nigerian exporters just refused to repatriate their export proceeds or that they have an issue to sort out with the authorities concerned on this matter?
The Central Bank believes that by repatriating their export proceeds through the Nigerian Foreign Exchange window (Investor and Exporter window) that there will be liquidity in the market. This will in turn strengthen the naira rate at the black market.
There had been this controversy between the Central Bank of Nigeria and stakeholders of the export community regarding this controversial export policy. This issue has forced many exporters, especially small scale exporters to abandon the business entirely due to non-workability of the policy.
Others have gone underground to carry out the business informally, as they said that it is impossible to do export business following the policy of the CBN on the repatriation of export proceeds.
The simple process involved here is that exporters will source their export commodities at the ruling market price, because all export commodities are priced at the ruling market rate which reflects the black market rate.
Then the exporters will incur additional charges which include shipping and documentation, when the transaction is completed and the export proceeds are paid into the domiciliary accounts of the exporters. When the exporters want to withdraw their money, the CBN pays them at the official exchange rate.
The exporters bought their commodities at black market rate, and are paid at the official exchange rate by the apex bank. How can this work?
The authorities should look into this matter and see that there is no way this can work, as no sane business person will go into business that the loss is clear from day one.
From reports that abound all over, revenue from the non-oil sector will continue to drop if something is not done urgently to arrest the ugly situation.
The country needs the foreign exchange that comes from the non-oil sector badly to help in stabilizing the exchange rate of the naira.
A typical example is the new policy of the CBN that all funds from the diaspora must be paid to the beneficiaries in US Dollars. This policy will in the long run encourage people abroad to send money home as they are sure of getting value from their sweat.
We hope that the Federal Government and the Central Bank of Nigeria will have a rethink and tinker with the policy to accommodate all parties involved.
