27 August 2018, Sweetcrude, Lagos — The Central Bank of Nigeria, CBN, has mandated all shipping agencies in Nigeria to operate Disbursement Accounts (DAs) from where the local agents carry out operational costs for their principals overseas.
The apex bank anticipates that this will entrench transparency in the forex market and curb the incidence of capital flight among the operators in the maritime sector
This is contained in the just released, revised CBN Foreign Exchange Manual with provisions and mandate that have taken effect since August 1, 2018. Henceforth, according to the new rule, the CBN, and the port economic regulator, the Nigerian Shippers’ Council (NSC) will jointly moderate ship and container demurrage charges and not just the monitoring foreign exchange inflows and capital repatriation.
Consequently, the apex bank and the NSC will compel all shipping agencies to open DAs and give a report on their functionality on a regular basis even as the manual provides penalty in event of infringement.
The NSC said this was in line with Article 4 of the United Nations Conference on Trade and Development (UNCTAD) minimum standards for shipping agents all over the world.
A circular announcing the regulations to authorized dealer banks and the public, signed by the Director, Trade, and Exchange at the CBN, F..O Okonji stated that the changes made in the manual were aimed at streaming documentation requirements, enhancement of transparency of transactions and engendering compliance by stakeholders.
Part of the guideline stipulates that CBN shall operate a single market structure through the autonomous/inter-bank market, including the Inter-Bank Foreign Exchange Market with the CBN participating in the FX market through interventions directly in the inter-bank market or through dynamic “Secondary Market Intervention Mechanisms”.
Furthermore, to promote the global competitiveness of the market, CBN said the inter-bank FX market will be supported by the introduction of additional risk management products offered by the CBN and authorised dealers to further deepen the FX market, boost liquidity and promote financial security in the market.
This Foreign Exchange Manual is compiled and issued by the Central Bank of Nigeria (CBN) pursuant to the powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act of 1995. The Manual is intended as a guide to authorized dealers in processing foreign exchange applications for their customers.
“This edition has been revised in line with the provisions of the Act of 1995 and therefore, supersedes all other editions and amendments issued prior to the date of this publication,” the bank noted.