Nigeria operates a state-managed forex policy which entails the direct supervision of the  foreign exchange market by the central bank of Nigeria. In other words, the CBN  manages requests for foreign exchange through authorized dealers and regulates the  exchange rates through a hybrid system of auctions. The CBN also maintains an  exhaustive list of goods/items that are eligible for foreign exchange at the official rate.

However, the prevailing economic strains in the country occasioned by Covid 19,  intermittent devaluation of the Naira, and the gradual depletion of our foreign reserves  have made a review of the processes for accessing foreign exchange inevitable. To this  end, the Guidelines were issued by CBN to plug some identified loopholes in the prior  existing procedures applicable to exporters and importers in accessing foreign exchange  and promote overall prudency and efficiency in these processes.

Content of the Guidelines

The following summarizes the key provisions of the Guidelines:

  • The Guidelines was to take effect on February 1, 2022;
  • The introduction of e-Valuator and e-Invoice documentation process which replaces the hard copy final invoice documentation process for all import and  export transactions;
  • The adoption of the Global Price Verification Mechanism in estimating the prices of goods for import and export transactions. The Global Price Verification  Mechanism is to be guided by a benchmark price which is the actual spot market price obtainable at the time of consummation of invoicing, in that market where  the goods are traded;
  • The prohibition of import and export transactions with unit prices that are more than 2.5% from the global benchmark prices from successful completion of either  form M or Form NXP (as the case may be).

The following exemptions are provided:

  • Exemption of individual invoices with a value of less than USD10,000 (or its equivalent in another currency) from submitting e-invoices, except where  suppliers have an annual cumulative invoicing value equal to above USD500,000 (or its equivalent in another currency);
  • Exemption of import and export transactions made by all security agencies in the country;
  • Exemption of supplies to diplomatic and consular missions and supplies to international agencies dependent on the United Nations;
  • Exemption of donations made by foreign governments or international organisations to foundations, charities and recognised humanitarian agencies;
  • Exemption of goods directly supplied by a foreign government.


The provisions of the Guidelines are generally laudable and reformative. The digitization  of the documentation process for procuring foreign exchange for import and export  transactions is long overdue and consistent with the evolving trends and practices of the  digital age. This will further fast-track the review process and ensure that decisions on  the status of each application are communicated in good time. Furthermore, applications  that do not fully satisfy the requirements prescribed can be easily sorted and  discountenanced without wastage of productive in reviewing such applications. The automation of the application process will also limit the incidence of human  influence/manipulation of the process since the latitude of human discretion will be  greatly reduced.

In the same vein, the introduction of the Global Price Verification Mechanism (GPVM)  will help in curbing fraudulent and subversive practices in the forex market. It is no  longer news that many importers/exporters regularly doctor invoices and other  documents presented in their applications for forex for selfish gains. This has further  worsened the pressures on the CBN in meeting forex demands leading to forex scarcity  and deprivation of other deserving applicants of forex. However, with the GPVM which  is anchored on a benchmark pricing of commodities at the spot market price, bogus and  fraudulent applications can be easily identified and rejected.

The prescription of a margin of difference of 2.5% as the maximum permissible difference  between the commodity price stated in the application and the price computed pursuant  to the GPVM will further entrench prudency in the pricing of commodities by applicants.  The fact that GPVM can easily be ascertainable by any importer/exporter will ensure that  they are guided and have this price as a reference point when negotiating the prices of  commodities with their suppliers/buyers. In addition, this policy will also ensure  competitive pricing and ensure that importers in particular source for commodities with  competitive prices as a condition precedent to accessing foreign exchange. This will  invariably help reduce the cost of imported goods and ultimately benefit the local  consumer in the country.

The clarity and certainty in the language used in specifying the consequences for non[1]compliance with the Guidelines is commendable. For ease of reference, the relevant  provision of the Guideline on this subject is reproduced below:

Imports and exports with unit prices that are more than 2.5 per cent of the verified global  checkmate prices would be queried and will not be allowed for successful completion of  either form M or Form NXP as the case may be.

From the above excerpt, the consequence for non-compliance - which is query and decline  of the application - is not in doubt nor subject to the discretion of the reviewing officer.  This will stamp out the likelihood of applicants inducing reviewing officers to  compromise the application process.


The moratorium period of less than two weeks to the implementation of the Guidelines  is considerably insufficient. Given the relatively profound impacts of the Guidelines on  import/export transactions in the country, it would have been desirable for a longer  moratorium to be provided in the Guidelines so that relevant stakeholders can make  necessary adjustment in preparation for compliance. Pertinently, the CBN should have  created time for pilot-testing the new digital process and embark on advocacy explaining  the process to the stakeholders.

Furthermore, less literate/non-computer savvy merchants may stand the risk of being excluded from forex for their transactions. As is common knowledge, Nigeria has a large  population of non-literate persons and an even larger population of persons that are  unable to operate computers. Accordingly, since the Guidelines incorporate and  contemplate a lot of digital processes, it may be difficult for this significant class of the  population to comply with its provision.

Additionally, the annual subscription fee of $350 payable for registration and  authentication is high. Rather than paying $350 as annual subscription, a reduced  renewal fee of $100 be paid after the expiration of first registration. This is because, the difference of $250 is quite substantial when converted to our local currency and can be  saved by the importer/ exporter in the Nigerian economy.

In similar vein, the annual cumulative supplier's invoicing threshold of $500,000  prescribed for the eligibility for exemption of individual invoices not exceeding $10,000,  should be reduced to $100,000. This will guard against the likelihood of abuse of this  regulatory exemption.

Lastly, there are doubts on the availability of the technical capacity and infrastructure  required to facilitate the implementation of the Guidelines. In a country like Nigeria with  epileptic power supply and slow internet connections, the efficacy and smooth  implementation of the Guidelines may be jeopardized. Furthermore, adequate measures  should be adopted to safeguard the integrity of the data and documents that will be  uploaded to the electronic portal against hacks and compromise.


The Guidelines is a welcome initiative of government and should help curtail the ongoing  severe hemorrhage of forex resources by unscrupulous import and export merchants and  their willing collaborators. That said, the CBN should address the concerns raised earlier  in this write-up and evaluate the impact/efficacy of the Guidelines in achieving its  intended objectives. Doing this will provide valuable information that will assist in future  amendments or revisions to be made to the Guidelines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.