CBN cuts forex for maize importation

The Central Bank of Nigeria (CBN) on Monday directed banks to stop processing new foreign exchange documents (Form M) for maize imports.

In a circular to commercial banks, the apex bank said it wanted to support the increase in local production, stimulate the economy and safeguard rural livelihoods lost as a result of the COVID-19 pandemic.

The bank asked dealers to submit an import document, called Form M, for maize by tomorrow.

Form M is a document to be completed by importers into Nigeria. The documentation also enables lenders submit bids to the apex bank for hard currency to pay for the imports.

The government is seeking to fund a balance of payment gap of around $14 billion in the year, according to central bank data.

Dollar demand has been swelling and piling pressure on the naira. Importers with past due obligations have scrambled for hard currency while providers of foreign exchange, such as offshore investors, have exited.

The oil price crash caused by coronavirus pandemic has exacerbated a shortage of dollars for Nigeria, whose reserve has declined 20 per cent to $36.13 billion over the last year.

Last year, the CBN told lenders to stop processing milk imports on a credit basis after it said it would ban access to forex for diary to spur local production. It later lifted forex restrictions for milk imports for six firms.