The Central Bank of Nigeria’s Trade and Exchange Department launched a Foreign Exchange (FX) Price Verification System (PVS) portal. This move aims to assist importers in accessing forex, addressing the ongoing forex challenges in the country.
Dr. Ozoemena Nnaji, the Director of the Trade and Exchange Department at CBN, communicated this development through a circular. The circular noted the successful completion of the pilot phase and the training sessions conducted with domestic banks.
Given the current forex crisis, the implementation of the Price Verification System (PVS) portal is a significant step. Effective from August 31 onward, the Central Bank mandates that all applications for Form M must include a valid price verification report generated via the PVS portal. Accurate price information plays a crucial role in the foreign exchange process, highlighting the significance of this requirement.
Form M is an online documentation process introduced by the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS). This process is obligatory for all importers who wish to bring goods into Nigeria. Its primary purpose is to closely monitor the imported goods and facilitate the appropriate collection of import duties, when applicable.
To initiate the Form M procedure, importers need to have the following essential documents:
- Certificate of Incorporation/Registration: This document verifies the company’s legal status in Nigeria.
- Registration with Federal Inland Revenue Services (FIRS): Importers must be registered with FIRS, the tax authority in Nigeria.
- Proforma Invoice: A detailed and preliminary invoice that outlines the expected costs and details of the imported goods.
- Insurance: Proof of insurance coverage for the goods being imported.
- Product Certificate (PC): For items that fall under the regulation of the Standards Organization of Nigeria (SON), a Product Certificate is required to demonstrate compliance with standards and regulations.
These requirements ensure a streamlined process for importation, allowing for efficient monitoring and appropriate duties to be collected.
The lifespan of a Form M is either 180 days for general merchandise or 365 days for plant and machinery. If needed, an extension of 180 days (for general merchandise) or 365 days (for plant and machinery) can be granted by the Authorised Dealer. For any additional extension beyond this, approval from the Central Bank of Nigeria (CBN) is required.
The introduction of the price verification system portal by the CBN aims to enhance transparency in forex transactions. This system will maintain records of how customers acquired foreign currencies and the corresponding exchange rates.
Accusations of round-tripping, specifically directed at banks and their staff, have been placing strain on the Nigerian Naira within the FX market. The introduction of the price verification system is also designed to effectively address and combat this problem.
The CBN emphasises the importance of strict compliance with these measures by all parties involved.
