NESG Applauds CBN’s Decision to End Price Verification System for FX Transactions

The Nigerian Economic Summit Group (NESG) has expressed strong support for the Central Bank of Nigeria’s (CBN) recent decision to discontinue the Price Verification System (PVS) for foreign exchange transactions, viewing it as a significant step towards removing regulatory bottlenecks and enhancing macroeconomic stability.

In a communique released over the weekend, the NESG endorsed the CBN’s move, which was announced in a recent circular stating that, effective July 1, importers will no longer require validation of Form ‘M’ applications via the Price Verification Report from the PVS.

The CBN’s circular, issued last Wednesday by the Acting Director of the Trade & Exchange Department, W.J. Kanya, followed developments in the Nigerian Foreign Exchange Market and referenced a prior circular from August 17, 2023, concerning the launch of the Price Verification System Portal. The portal was initially designed to prevent over-invoicing and under-invoicing by ensuring accurate pricing for goods and services in foreign exchange transactions.

With the new directive, all applications for Form ‘M’ will now be validated without needing a Price Verification Report generated from the PVS Portal, aiming to simplify processes for authorised dealer banks and the public, thereby easing the procedural burden associated with foreign exchange transactions.

The NESG noted that this policy change would significantly benefit the manufacturing sector by providing timely access to essential inputs, leading to higher production levels and enhancing the sector’s contribution to GDP. They further emphasized that a more efficient importation process would positively impact other sectors, stimulating economic activity across the board.

“The reduction in bureaucratic bottlenecks will make Nigerian businesses more competitive globally. Lower operational costs and improved efficiency will enable businesses to offer more competitive prices, increase market share, and expand their export potential. This will contribute to a favourable balance of trade and strengthen Nigeria’s position in the global economy,” the NESG stated.

The policy change aligns with the CBN’s core mandate of maintaining price stability and promoting sustainable economic growth. By reducing the cost of doing business and enhancing supply chain efficiency, the policy is expected to exert downward pressure on production costs, thereby contributing to inflation moderation. Additionally, increased economic activity and investment will support higher output growth, reinforcing the stability and resilience of the Nigerian economy.