Nigeria Seeks to Curb Forex Demand With New Digital Invoice Rule

(Bloomberg) -- Nigeria's central bank has introduced a digital invoicing system for importers and exporters to curb over-pricing, the deputy governor said. 

The new system that became operational Feb. 1, seeks to “save more foreign exchange earnings that will be channeled to the most productive sectors of the economy,” said Kingsley Obiora in a communique published Friday on January's monetary policy committee meeting. “This will boost local production capacity, promote inclusive growth and sustain a strong naira exchange rate,” he said.

Importers and exporters must submit an electronic invoice authenticated by their banks. The central bank verifies all prices submitted based on a global benchmark. 

“The aim is to eliminate over-invoicing, mispricing of exports and imports, as well as activities of money laundering,” Obiora said.

The Abuja-based central bank has introduced various measures to curb dollar demand since 2020, following a crash in oil income that accounts for about 90% of foreign exchange earnings. Still, it has been forced to devalue the local currency three times in the last two years and has a backlog of about $1.7 billion in unmet dollar demand from investors, according to the International Monetary Fund. 

The local unit exchanged 415.61 naira to a dollar at the official spot market as of 2.56 p.m. in Lagos and traded 37% weaker on the parallel market, owing to a shortage of the greenback. 

©2022 Bloomberg L.P.