the Central Bank of Nigeria (CBN) has significantly revised the allowable deviation limits for the Price Verification System (PVS) used in monitoring the pricing of exports and imports from 2.5 to 15 per cent.
This development, a decisive move to address the impact of global inflation and enhance the efficiency of foreign exchange utilisation in Nigeria, was announced through a circular released by the apex bank.
The circular, signed by Dr Hassan Mahmud, the Director of the Trade and Exchange Department at the CBN, underscores the CBN’s commitment to safeguarding the economy from price manipulation activities that could exacerbate the foreign exchange crisis and outlines the adjustments made to the PVS, a mechanism initially designed to combat the financial malpractices of over-invoicing imports and under-invoicing exports.
Previously, the system flagged any declared prices of import items that exceeded global average prices by more than 2.5 per cent.
However, acknowledging the challenges posed by persistent global inflation, the CBN has now expanded the deviation limits for both exports and imports and effective immediately, the new regulation permits a deviation of up to -15% and +15% from the global average prices for exports and imports, respectively.
This adjustment represents a 500% increase in the allowable limit for price verification.
The CBN said the measure will provide more flexibility in the face of fluctuating global prices while preventing the exploitation of the system.
“Following the implementation of the Price Verification System (PVS) to curb over-invoicing of imports and under-invoicing of exports, the CBN in a circular referenced TED/FEM/FPO/PUB/01/001 stated that declared prices of import items that are more than 2.5 percent above the global average prices of the referenced item will be queried.
“However, due to global inflation and other related challenges, the CBN has reviewed the allowable limit of price deviation for exports and imports to -15% and +15% of the global average prices, respectively.
“Authorized Dealer Banks and the general public are hereby advised to note and comply accordingly,” the statement read.