The Central Bank of Nigeria, CBN, has moved against unscrupulous Nigerians and corporate, who abuse the Form M system through over-pricing as it introduces the Product Price Verification Mechanism (PPVM).
It has, therefore, directed authorized dealers to use the PPVM to verify quoted prices of goods and services before approving Form M for their customers.
In a circular referenced: TED/FEM/FP/GEN/01/005, dated August 24, 2020, and signed by the Director of Trade and Exchange, Dr. Ozoemena Nnaji, the apex bank also directed authorized dealers to stop opening Form M which payment are routed through a buying company/agent or any third party.
It said: “As part of continued efforts by the CBN to ensure prudent use of our foreign exchange resource and eliminate over-invoicing, transfer pricing, double handling charges, and avoidable costs that are ultimately passed to the average Nigerian consumers, authorized dealers are hereby directed to desist from opening Form M which payments are routed through a buying company/agent or any third parties.
“Accordingly, all authorized dealers are hereby requested to only open Form M for Letters of Credit, Bills for Collection, and other forms of payment in favor of the ultimate suppliers of the product or service.
“Additionally, in line with best practices around the world, the CBN will be immediately introducing a Product Price Verification Mechanism to forestall over-pricing and /or mispricings of goods and services imported into the country.
“All authorized dealers shall use this mechanism to verify quoted prices before Form M is approved.“
The bank said that the directive was with immediate effect and that Authorised Dealers must ensure strict compliance.