The LCCI has called for review of the Central Bank of Nigeria ( CBN ) directive that Form M for Letters of Credit, Bills for Collection and other forms of payment should only be opened in favour of ultimate suppliers of a product or service.
Applauding the efforts of the apex bank in curbing abuses in the foreign exchange market, the chamber noted that the policy measure would create more problems than it would solve.
According to the Director General of the LCCI, Dr Muda Yusuf, already most foreign exchange transactions have been frozen on account of the policy, which means that the supply chain of over 80per cent of the business community has once again been disrupted and dislocated. He 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 retailers and consumers. Middlemen play a critical role in the supply and distribution chain in any economy locally and globally.