Home African CEOs Profiles The CBN promises to crack down on companies, banks that abuse Forex on 42 restricted items
Profiles - December 11, 2018

The CBN promises to crack down on companies, banks that abuse Forex on 42 restricted items

The Central Bank of Nigeria (CBN) on Monday promised to crack down on individuals and businesses engaged in clandestine activities to prevent foreign exchange restrictions on the import of 41 items into the country.

In June 2015, CBN listed 41 items that it believed were not eligible for foreign exchange allocation for their importation on the grounds that they could be competitively produced in the Nigerian economy.

Some of the affected items include Rice, cement, margarine, palm kernel, palm oils, vegetable oils, processed meat and meat products, vegetables and processed vegetable products, poultry, tomatoes/dough tomatoes, soap and cosmetics and clothing.

Other items included Private aircraft/jets, Indian incense, canned fish, cold-rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes/containers, enamelware, steel drums and pipes, wire mesh, steel nails, wood particle board 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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