In line with a fresh directive from the Central Bank of Nigeria (CBN) that all exporters with unrepatriated export proceeds should be barred from accessing all banking services from January 31st, 2021, Zenith Bank Plc has notified its customers in export business of its readiness to enforce the policy.
The bank gave the notification to its customers in a letter titled: “Barring of Exporters with Unrepatriated Export Proceeds from all Banking Services,” dated January 22.
The tier-one bank stated: “Please be informed that the Central Bank of Nigeria through its circular referenced TED/EXP/CON/NES/01/001 dated 13th January, 2021, has instructed that all exporters with unrepatriated export proceeds by 31st January, 2021, should be barred from accessing all banking services.
“Subsequently, all customers with unrepatriated export proceeds are required to comply with this directive before the specified date.”
A recent report by AZA Finance, an Africa-focused provider of currency trading solutions had attributed the pressure facing the naira on the parallel market to diversion of export proceeds away from the approved channels by a lot companies in the country.
According to AZA Finance, “Many companies and individuals are diverting export proceeds and remittances away from approved channels while directing unmet dollar demand to the parallel market. As dollar scarcity continues to linger, we foresee more pressure on the local currency.
“Dollar demand pressure continues to weigh in from importers stocking up for Christmas sales.”
The Federation of Agricultural Commodity Associations of Nigeria (FACAN) had said it was in total support of the CBN’s position on repatriation of export proceeds to boost liquidity in the forex market.
It had also called on the apex bank to further strengthen the policy to allow exporters unfettered access to their, “hard-earned foreign exchange proceeds,” going forward.
FACAN National President, Dr. Victor Iyama said, “some exporters have gone underground in order to stay afloat while some will not repatriate their forex earnings and some have resulted to smuggling”.
He added: “It is our considered view that any exporter who refuses to comply on 100 per cent repatriation of export proceeds into the country should be treated as an economic saboteur and sanctioned accordingly as we in the league of exporters are ready to enforce it.”
He argued that allowing exporters unrestricted access to their export proceed will among other things lead to increased revenue to the country, reduce smuggling activities, improve forex earnings, reduce corruption as well as improvement in the country’s balance of trade.
Iyama said: “Exporters source for their produce from local buying agents/aggregagtors/merchants at just a little margin below the international market price as an act of sacrifice. Yet, our exporters still buy from these agents/aggregagtors/merchants at those prices just to remain in businesses and when the proceeds of export are repatriated through commercial banks, exporters are forced to accept the repatriated proceeds at a predetermined bank rate of say N385 to $1, while the parallel market i.e. Bureau De Change sell the foreign exchange majorly sourced from the same CBN at N465, thereby shortchanging the exporters by a margin about N80.”
He said: “The nation’s economy is therefore being deprived of the much needed foreign exchange as a result of this obnoxious arm-twisting of all repatriated funds of the exporters, Nigerians in diaspora and foreign investors.”