Shippers’ Council, CBN brainstorm over Form ‘M’ controversy

 Abiola Seun    |  


The Nigerian Shippers Council (NSC) may meet the Central Bank of Nigeria (CBN) over its new circular on opening of Letter of Credit also known as Form ‘M’. 

Recall that the CBN, has directed banks to  end the era of opening Form  ‘M’ through third party, agent or buying company.

CBN had in the circular released last week said this was to end decades of over-invoicing and foreign exchange scam through which some importers and other businesses use to secure more foreign exchange allocations from banks.

But the Manufacturers Association of Nigeria (MAN) said the good intention of the CBN  was inimical to the survival of many manufacturers who may not be involved in any  trade malpractices.

MAN added that  most manufacturers, particularly  Small and Medium Enterprises (SMEs) go through accredited agents for their supplies, adding that many   Original Equipment Manufacturers (OEMs) overseas do not supply goods directly to individual buyers.

Similarly, the  Association of Nigerian Licensed Customs Agents (ANLCA)  criticised the   CBN circular,   saying    it  was aimed at reintroducing pre-shipment inspection of imports through product price verification as against Destination Inspection (DI).

However,  the Executive Secretary, NSC, Mr. Hassan Bello said the ports economic regulator would be meeting the MAN, Lagos Chamber of Commerce and Industry (LCCI), freight forwarders associations and other stakeholders to aggregate their comments on the new CBN policy on Form ‘M’.

Bello said the Council would after aggregating the views of   critical stakeholders, look at what the CBN is doing, explaining that this was because the apex bank has done a lot.

He said, “I was at the Export Promotion Council and this issue came up. But we are still studying the situation and will make appropriate pronouncement”.

The Vice President of ANLCA,  Kayode Farinto,   told  newsmen  that  such product price verification policy by CBN would mean that the CBN  wants to  bring back pre-shipment inspection and do away with DI.

He said what this means is that the CBN would be engaging pre-shipment  inspectors  through the back door in total disregard to  article 7 of the general agreement on tariff and trade  which requires five to six principles before a price is agreed that Nigeria has entered into in agreements and protocols.

He  also said that the implication of banning third party agreements in Form-M will affect Nigerian imports negatively, but more seriously as  many will lose their jobs.