The Central Bank of Nigeria (CBN) recently announced the implementation of price control measures in a bid to combat global inflation and other economic challenges. According to a circular from Dr. Hassan Mahmud, Director of the Department of Trade and Commerce of the CBN, the move aims to regulate financial transactions and documentation in the banking sector to reduce overcharging and ensure accuracy of prices of imported goods.
Initially introduced in 2022 to combat import overinvoicing, the Price Validation System (PVS) was responsible for verifying the prices of imported items that were more than 2.5% higher than the global price average. However, due to global inflation and other related challenges, the CBN has revised the acceptable price variation limits for exports and imports, setting them at -15% and +15% respectively from the average world prices.
It is important to emphasize that the PVS is not intended to determine government-imposed tariffs or duties, but rather to limit excessive outflows of foreign currency through overinvoicing and other price manipulation.
In another related decision, the CBN also announced that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) payments will now be made exclusively electronically. This decision aims to ensure the transparency and stability of the foreign exchange market, while avoiding any fraudulent practices. Authorized banks will therefore have to make PTA/BTA payments only through electronic channels, including debit or credit cards.
These price control measures as well as the promotion of electronic payments demonstrate the CBN’s continued commitment to ensuring economic stability and combating fraudulent practices. These decisions are aimed at protecting the Nigerian economy and promoting transparency in financial transactions.
In conclusion, the CBN is taking proactive steps to combat global inflation and economic challenges by implementing price controls and promoting electronic payments. These efforts will benefit the country by ensuring economic stability and reducing fraudulent practices.