The Central Bank of Nigeria has stopped the issuance of Foreign Exchange ( forex) for the importation of maize into the country.
This is just as the CBN has issued a guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector.
The forex restriction order was made known on Monday in a circular signed by the director, Trade and Exchange Department of CBN O.S. Nnaji.
The decision, according to CBN, is to boost local production of maize in the country.
“As part of an effort by the Central Bank of Nigeria to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods and increase job, which was lost as a result of the ongoing COVID-19 Pandemic, Authorized dealers are hereby directed to discontinue the processing of Form M for the importation of maize/corn with immediate effect,” CBN said in the memo.
Form M is a mandatory document used by the Ministry of Finance and the CBN to monitor goods that are imported into the country as well as enable the collection of import duties where applicable.
The bank, however, asked the dealers to still submit the already registered forms.
“Accordingly, all authorized dealers are hereby requested to submit the list of Form M already registered for the importation of maize/corn using the attached format on or before the close of business on Wednesday 15, 2020,” CBN said.
Data obtained from the United State Department of Agriculture (USDA) shows that Nigeria imported 400,000 tons of maize in 2019 as it did in 2018.
That figure, recorded separately in both years, is the second-highest maize import volume for the country since 2009.
The highest was recorded in 2016 when 650,000 tons of maize was imported by the country.
Meanwhile, the GSI according to the apex bank shall serve as a last resort by a Creditor bank, without recourse to the Borrower, to recover past-due obligations (Principal and Accrued Interest only, excluding any Penal Charges) from a defaulting Borrower through a direct set-off from deposits/investments held in the Borrower’s qualifying bank accounts with participating financial institutions.
The CBN describes GSI as an instruction (written or digital) executed by a borrower being an Account Holder in a Participating Financial Institution, authorizing the recovery of an amount specified by the Creditor from any/all accounts maintained by the Account Holder across all Participating Financial Institutions.
The CBN said this is in pursuant of the powers conferred on it by Section 2 (d) of the Central Bank of Nigeria Act, 2007; to promote a sound financial system in Nigeria; the CBN hereby issues this guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector.
“The objectives of GSI include: a) Facilitate an improved credit repayment culture; b) Reduce Non-Performing Loans (NPLs) in the banking industry, and c) Watch-listing consistent loan defaulters.
“The GSI shall not serve as a tool to recover ANY Penal Charges that may have accrued on a credit/loan and included as part of outstanding balances/obligations of a borrower,” the document read in part.
According to the apex bank, the following types of accounts qualify for GSI: Individual Savings Accounts; Individual Current Accounts; Individual Domiciliary Accounts; Investment/Deposit Accounts (N & Foreign Currency); and Electronic Wallets.