In 7 Months, CBN Sold $867.68m Forex To SMEs
The Central Bank of Nigeria, CBN, has raised the volume of foreign exchange sales to the Small and Medium Enterprises (SMEs) category businesses by 31 percent in the first seven months of this year (January to July 2021).
Findings from the CBN’s schedule of “foreign exchange flows through the Nigerian economy”, indicated that a total of $867.68 million was sold to the SMEs during the period, as against $660.9 million in the corresponding period of 2020.
However, in March 2020 the apex bank suspended sales of forex to SMEs due to the COVID-19 induced economic lockdown.
In the review period of 2021, CBN made the highest sales of forex amounting $153.58 million to SMEs in June. This was higher by 47 percent when compared to $104.2 million sold in the corresponding period of 2020.
The lowest sale of forex was made in January 2021 ($89.88 million) representing a 43 percent decline when compared to $158.1 million sold in January 2020.
It should be noted that in 2017, the CBN introduced the use of Form ‘Q’, as part of its effort to improve access to foreign exchange by SMEs. The form was also designed to ease documentation requirements by this sector.
In the same year, the CBN opened a special Forex window for SMEs to enable them import eligible finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.
The apex bank explained that this special intervention was necessitated by its findings that a large number of SMEs were being crowded out of the forex space by large firms.
It stated, “The sum of $20,000 per SME customer per quarter can be effected by telegraphic transfer subject to completion of Form ‘M’ supported with proforma Invoice and the importer’s Bank Verification Number (BVN)”