The Central Bank of Nigeria (CBN) issued a Circular Ref. No. TED/FEM/FPC/GEN/ 01/005 of 24 August 2020 to the effect that authorised dealers are no longer permitted to open Form M in favour of procurement companies. CBN further stated that, going forward, Form M for letters of credit, Bills for collection and any other form of payment can only be opened for ultimate suppliers of goods or services. The aim of the new directive is to curb incidences of price manipulation, transfer pricing, over-invoicing, cost duplication and double handling charges.
We have highlighted below some of the key benefits of procurement agency arrangements which should inform the need for stakeholder engagement and the design of a mechanism to prevent its abuse:
Benefits of using procurement agents
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