11 December 2018

Nigeria: CBN Vows to Clamp Down On Businesses, Banks That Abuse Forex On 42 Restricted Items

The Central Bank of Nigeria (CBN) on Monday vowed to clamp down on individuals and businesses engaging in clandestine activities to frustrate the restriction of foreign exchange on the importation of 41 items into the country.

In June 2015, CBN listed 41 items it said were ineligible for allocation of foreign exchange for their importation, on grounds that they could be competitively produced within the Nigerian economy.

Some of the affected items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and process vegetable products, poultry, tomatoes/tomato paste, soap and cosmetics, and clothes.

Other items included private airplanes/jets, Indian incense, tinned fish in sauce, cold rolled steel sheets, galvanised steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes/containers, enamel ware, steel drums and pipes, wire mesh, steel nails, wood particle boards and panels.

Also included were security and razor wire, wood particle and fibre boards and panels, wooden doors, furniture, toothpicks, glass/glassware, kitchen utensils, tableware, tiles (vitrified, ceramics), textiles, wooden fabrics, plastic/rubber products, polypropylene granules and cellophane wrappers.

The CBN, on Sunday, included fertiliser as the latest commodity to be affected by the policy.

But, the CBN director, Financial Policy and Regulation Department, Kevin Amugo, said in a statement sent to PREMIUM TIMES, the policy has resulted in massive investments and the establishment of cottage industries that are now producing the hitherto restricted items across the country.

Mr Amugo said it was unfortunate for the CBN to observe that the policy was fast being circumvented through the importation and dumping of the goods and services.

The director said the implication is that the benefits, by way of growth and employment benefits as a result of the policy, may be eroded if not checked.

Frowning at the development, Mr Amugo said the Economic Intelligence Unit of the apex bank in collaboration with the Economic and Financial Crimes Commission (EFCC) would start the immediate investigation of corporate accounts and entities suspected to be abusing the policy.

The CBN warned that it would not hesitate to impose severe sanctions on all the culprits and perpetrators of these abuses.

Such sanctions, the director said, in a letter to all banks, 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 supervision.

"Banks that provide their platforms for such economic sabotage and abuses would be appropriately sanctioned," the CBN said.

He urged banks to ensure strict compliance with the Know-Your-Customer (KYC) and Know-Your-Customer Business (KYCB) requirements to avoid unpleasant consequences.

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