10 important lessons from CBN’s mechanism for verifying foreign exchange rates

A method for verifying foreign exchange prices has been introduced by the Central Bank of Nigeria to provide importers access to foreign currency.

As of August 31, 2023, all Form M requests must include a price verification report from the site, according to a statement from the apex bank’s Trade and Exchange Department on Thursday evening.

According to the CBN, Form M is a legally required form that must be filled out by all importers when bringing products into Nigeria.

“The Central Bank of Nigeria hereby announces the Go-Live of the Price Verification System (PVS),” the announcement said. “Following the successful conduct of the pilot run and various trainings held with all the banks,” it continued.

The PUNCH summarises 10 major findings from the CBN forex pricing verification system in this paper, which is a development of the e-evaluator and e-Invoice CBN established in 2022 to replace hard copy final invoices in documentation processes for FX;

1. On August 31, the Price Verification System will go online.

2. A valid Price Verification Report, which can only be produced via the recently formed Price Verification System, must be submitted with every application for Forms M.

3. The Price Verification Report will now be a necessary trade document before Form M can be submitted.

4. The Federal Ministry of Finance of the Federal Republic of Nigeria, in coordination with the Central Bank of Nigeria (CBN) and the Nigerian Customs, has implemented the mandatory Form M documentation process, which enables the collection of import duties when necessary.

5. The PVS will assist in streamlining and controlling financial activities and paperwork in the banking industry.

6. The PVS is a development of the e-evaluator and e-Invoice, which CBN introduced in 2022 to replace the paper copy final invoices that were a requirement for all import and export operations.

7. Prices for imports and exports that exceed 2.5% of the confirmed prices will be questioned and Form M will not be accepted.

8. Nigerian importers and exporters of goods and services are required to register on the CBN’s designated electronic portal, which is run by the CBN’s chosen service provider.

9. A verification report and digital certificate, both of which are valid for a year, will be given to the importer or exporter following successful registration and authentication.

10. For each provider that is authenticated on the system, an annual subscription fee of an unconfirmed amount (formerly $350) will be paid.