New Telegraph

LCCI: Form M policy causing delay in export, import

Barely two months after the Central Bank of Nigeria announced a circular on Form M for letters of credit, bills for collection and other forms of payment for local manufacturers and small and medium scale enterprises (SMEs), the Lagos Chamber of Commerce and Industry (LCCI) has raised the alarm that report reaching it indicated that business owners and importers’ Form M documents are currently lying fallow in Nigerian banks without being treated or processed as they await the apex bank’s nod.

Director-General of LCCI, Dr. Muda Yusuf, in an interview with New Telegraph in Lagos, said that the fallout of the delay in processing business owners/ importers’ Form M to ship in or import goods was causing serous crisis in the country’s manufacturing sector and the economy in general.

He said the policy had been roundly condemned by the organised private sector (OPS) with a call for a review. Yusuf disclosed to this newspaper that the private sector had met the hierarchy of the apex bank on the need to reverse it in the interest of the real sector and Nigerian economy post- COVID-19. He said: “On the Form M circular, which excluded access to intermediary or agents, we have said that this is going to disrupt lots of businesses because it is going to affect SMEs as most of them actually import through agents.

“Bcause of the scheme and size of the agreement, they cannot afford to import directly from the original manufacturers or producers because of the level of their imports. So, as I am speaking to you, many of them are facing very serious crisis because their Form M have not been processed and there have been a lot of representation also from the chamber (LCCI) and many others OPTS to the CBN to review this position on the policy because it is not in the interest of the economy to completely exclude almost 80 per cent of those who import either raw materials or equipment, machinery and the likes into the economy.

“So it is not a policy that we support, and we have said so and we have also made representation to the CBN.” The renowned economic analyst was of the view that the LCCI appreciated the efforts of the CBN in curbing abuses in foreign exchange market with this policy.

“Unfortunately, the measure is creating more problems than it would solve in the system,” he noted. Acording to him, already, most foreign exchange transactions have been frozen on account of this circular. What this means is that the supply chain of over 80 per cent of the business community has once again been disrupted and dislocated.

The LCCI DG explained that it was impractical to expect all importers of raw materials, equipment, and other inputs to buy directly from the ultimate producer, manufacturer, or supplier, especially in an economy driven by SMEs. “Even in the domestic economy, distributors and dealers form the bridge that connects the major manufacturers to the retailers and consumers. “Middlemen play a critical role in the supply and distribution chain in any economy, domestically and globally. “They bring a great deal of value to the process,” he added.

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