The Lagos Chamber of Commerce and Industry has appealed to the Central Bank of Nigeria to review its new directive on payment for imports in the interest of the Nigerian economy.
In a statement on Sunday, its Director General, Dr. Muda Yusuf, said the appeal became pertinent following the adverse impacts of fall in oil prices and the coronavirus pandemic.
CBN had on August 24 issued a circular on a new directive as part of continued efforts to ensure prudent use of the nation’s forex resources and eliminate cases of over-invoicing.
The LCCI boss said, “While the Lagos Chamber of Commerce appreciates the efforts of the CBN in curbing abuses in the foreign exchange market, this policy measure would create more problems than it would solve.
“What this means is that the supply chain of over 80 per cent of the business community has once again been disrupted and dislocated.
“This is like substituting the global supply chain problem with a domestic supply chain disruption.
“Even in the domestic economy, distributors and dealers form the bridge that connects the major manufacturers to the retailers and consumers.
“Middlemen play a critical role in the supply and distribution chain in any economy, domestically and globally, as they bring a great deal of value to the process.
“We urge the CBN to please review this new policy on payments for imports to save the already ailing and distressed Nigerian economy from complete collapse.
“This policy negates the current laudable efforts by the government (and even the CBN itself) to ensure business continuity, sustainability, and recovery.
“It is also in conflict with the letters and spirit of the Economic Sustainability Plan of the Federal Government.”
CBN, in the circular, directed authorised dealers to desist from the opening of ‘Form M’ with payments routed through a buying company/agent or any other third parties.
The form is a mandatory statutory document to be completed by all importers for the importation of goods into Nigeria.
The CBN requested all authorised dealers to only open Form M for Letters of Credit, bills for collection and other forms of payment in favour of the ultimate supplier of the product or service.
The bank said that all authorised dealers should use the mechanism to verify quoted prices before Forms M are approved.
Explaining further, Yusuf said small and medium-size enterprises lacked the capacity to place huge orders that the main producers or manufacturers would require.
He said: “There is a high degree of uncertainty which fuels speculation; there is a high component of forex demand driven by the arbitrage opportunities which differential rates offer.
“There is the component of demand driven by the accumulation of inventories of raw materials caused by the current opacity in the market; there is the desperation of the non-resident portfolio investors to exit the Nigerian economy.”
