NESG Endorses CBN's Move to End Price Verification System for Forex Transactions

NESG Endorses CBN’s Move to End Price Verification System for Forex Transactions

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The Nigerian Economic Summit Group (NESG) has backed the recent decision of the Central Bank of Nigeria (CBN) to discontinue the Price Verification System (PVS) for foreign exchange transactions, saying it will remove regulatory bottlenecks and boost macroeconomic stability.

The CBN, in a recent circular, stated that with effect from July 1, applications for Form ‘M’  would no longer be needed by importers for validation via the Price Verification Report from the PVS.

In a circular released last Wednesday, the apex bank said the decision followed recent developments in the Nigerian Foreign Exchange Market.

The circular issued by the Acting Director of the Trade & Exchange Department, W.J. Kanya, also referenced a previous circular dated August 17, 2023, titled “Go-Live of the Central Bank of Nigeria Price Verification System Portal ”.

The Price Verification System Portal is an online platform introduced by the CBN to ensure that the prices of goods and services for foreign exchange transactions are accurately verified.

It was aimed at preventing over-invoicing and under-invoicing, thus ensuring fair pricing in Nigeria’s import and export activities.

With the new directive, the apex bank said all applications for Form ‘M’, will now be validated without the need for a Price Verification Report generated from the PVS Portal.

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The circular also noted that the Price Verification Report is no longer a requirement for completing a Form ‘M’.

The policy change aims to streamline processes for authorised dealer banks and the general public, potentially easing the procedural burden associated with foreign exchange transactions.

Welcoming the CBN’s decision in a communique released at the weekend, the NESG noted that “with a more efficient importation process, the manufacturing sector will benefit from timely access to essential inputs as it will enable higher levels of production and enhance the sector’s contribution to GDP. The increase in industrial output will have a positive spillover effect on other sectors, further stimulating economic activity.”

“In the same vein, the reduction in bureaucratic bottlenecks will make Nigerian businesses more competitive globally. Lower operational costs and improved efficiency will enable businesses to offer more competitive prices, increase market share, and expand their export potential. This will contribute to a favourable balance of trade and strengthen Nigeria’s position in the global economy.

 “Similarly, the policy change aligns with the CBN’s core mandate of maintaining price stability and promoting sustainable economic growth. By reducing the cost of doing business and enhancing supply chain efficiency, the policy is expected to exert downward pressure on production costs, thereby contributing to inflation moderation.

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“Moreover, increased economic activity and investment will support higher output growth, reinforcing the stability and resilience of the Nigerian economy,” the NESG added.

Dike Onwuamaeze

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