Nigeria’s Central Bank Introduces Forex Price Verification System

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The Central Bank of Nigeria (CBN) has launched a Foreign Exchange Price Verification System aimed at facilitating importers’ access to foreign exchange. According to the CBN’s Trade and Exchange Department, a price verification report generated from this system will be mandatory for all Form M requests, with the system set to go live on August 31, 2023.

Form M is a necessary statutory document that importers are required to complete for the importation of goods into Nigeria, as outlined by the CBN.

Key Takeaways from the Forex Price Verification System:

  1. The Price Verification System will become operational on August 31.
  2. All Form M applications must include a valid Price Verification Report generated exclusively from the newly established system.
  3. The Price Verification Report will be an essential trade document needed to finalize the Form M process.
  4. Form M is a mandatory documentation process introduced by the CBN and the Nigeria Customs, overseen by the Federal Ministry of Finance, to monitor imported goods and collect import duties where applicable.
  5. The Price Verification System will streamline and regulate financial transactions and documentation within the banking sector.
  6. The system builds upon the e-evaluator and e-Invoice initiatives introduced by the CBN in 2022, replacing hard copy final invoices for import and export transactions.
  7. Transactions involving imports and exports with prices exceeding 2.5% of the verified prices will be queried and may not be approved for Form M.
  8. Importers and exporters are required to register on the CBN’s dedicated electronic portal operated by an appointed service provider.
  9. Upon successful registration and authentication, importers/exporters will receive a verification report and digital certificate, valid for one year.
  10. An annual subscription fee will be charged for authentication of suppliers on the system.

Opinion: The introduction of the Forex Price Verification System by the Central Bank of Nigeria demonstrates the country’s efforts to enhance transparency, accuracy, and regulatory oversight in foreign exchange transactions. By implementing a mandatory Price Verification Report for Form M requests, the CBN aims to ensure that importers provide accurate pricing information, thereby reducing potential misuse of foreign exchange resources. Additionally, this move aligns with global trends towards digitization and electronic documentation in financial and trade processes. While the system offers potential benefits, stakeholders should closely monitor its implementation to assess its effectiveness in curbing fraud and ensuring a smoother importation process.

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