NO Foreign Transactions with your Naira ATM/Debit/Credit Cards from January 2016-What is The Solution For Bloggers

The news has propagated to every nook and crania’s of the walls,
Every single Nigeria especially bloggers and subsequent stakeholders in the
blogosphere, shopping sphere and import domain  is been affected in one way or the other. Nobody
can say authoritatively if survival is still possible.

Unfortunately, Yesterday at about 6:00pm, I received an alert from
my bank (UBA) relating my Facebook ads. This alert was containing a detailed
financial transaction so far and the total accumulated fee (which was $55)
which was deducted from my account. Currently my Facebook ads is not running
and its disturbing and worrisome. I doubt if there will be any on time solution
for this impending crisis.

In case your still on the loop, this means,if you travel abroad
and try to use your visa/debit Naira card, it will not work. If you decide to
shop online and the transaction is billed in any foreign currency, it will not
work. If you are in Nigeria and try to use your card for a foreign currency
transaction, it will not work. Seriously speaking, but still subject to
correction.

According to Sunday Punch, which reveals the following;

In a notice to its customers, Standard Chartered
said, “This is to notify you that from January 1, 2016, your naira card will no
longer be enabled for international use. This is as a result of the limited
foreign exchange supply in the financial market.”

Asked how long the suspension of cards from
international transactions would be, the spokesperson for Standard Chartered
Nigeria, Mrs. Dayo Adurogbo, said, “We cannot give a definite date. It depends
on how soon it is available. We will do everything to meet our customers’
demand once it is available.”

Further findings showed that a number of other banks
had stopped customers from using their ATM cards abroad but had yet to
officially communicate this to them.

This is indeed bad news for Nigerian travellers and
business owners/ entrepreneurs who rely on this service for their blogging
activities, exportation/importation pursuit, hotels, flight bookings and
ordering goods.

on the other hand, a source at CBN says it is “inevitable”.
Punch outlined this by explaining the cause – the fall in prices of crude oil,
the main earner of foreign exchange for Nigeria, has made the nation’s forex
income to reduce drastically, creating dollar scarcity crisis for the Central
Bank of Nigeria.

The CBN has been rationing dollar to banks, importers
and other forex users as the nation’s foreign exchange reserves continue to
deplete, hitting $29.4bn on December 7, 2015.

The difficulty is how do we triumph over this confrontation and
crisis (impending) and keep either your business buoyant or sustain yourself as
a blogger, businessman/woman, entrepreneur, student? We are going to look at a
solution to tackle this issue. For now, this is what we can say is the reassuring
remedy…

Domiciliary Account/Foreign Currency based debit card
Worthy to note, the limitations in transactions is only limited to Naira cards
(Naira based debit/credit cards), hence you can open a domiciliary account
(Euro, Dollar or Pounds Sterling based) with any bank and request for debit
card (MasterCard or VISA). After opening this account, the next challenge is
funding the account. Earlier in August, 2015 the Central Bank had
banned/restricted payment of cash into domiciliary accounts in the country, so
you may not be able to buy dollar, pounds or euros from black market and
deposit cash to your domiciliary account. A statement released then reads in
part:

“Therefore, in its continued efforts to stop illicit
financial flows in the Nigerian banking system which aligns with the anti-money
Laundering stance of the Federal Government, the CBN hereby prohibits from the
date of this circular the acceptance of foreign currency cash deposits by
Deposit Money Banks (DMBs). “For foreign currency cash lodgments made prior to
the date of this circular, the account holder has the option to either withdraw
his or her foreign currency cash or the Naira equivalent.

For the avoidance of
doubt, only wire transfers to and from Domiciliary Accounts are henceforth
permissible. “The CBN advises individuals that wish to source foreign currency
for eligible and legitimate purposes such as BTA, PTA medical, mortgage, school
fees, goods etc. to do so through recognized channels with the use of Form ‘A’
for “invisible” and Form ‘M’ for “visible” transactions.”

So how do you fund the
domiciliary account?

The CBN restriction is not outright, as you are
allowed to deposit of dollars into your domiciliary account in some cases.
However, some banks totally reject physical deposit of dollars into domiciliary
accounts.

Option 1: Direct Deposit

In a case your bank accepts deposit, you can buy dollar from any Bureau De
Change or black market and deposit into the account. But if your bank doesn’t,
you can use option below.

If you are a student, note that CBN says you can
access dollars to pay for school fees and or student maintenance allowances. To
get the dollars all you need to do is walk up to your bank and show proof. For
e.g school fees, tuition etc. The bank is expected to sell the dollars to you
once you provide these documents.

Note: You may not be allowed to
transfer money out of your account if the dollars sitting in your account was
deposited physically.However, if the dollars was wired to you, then you can
transfer it without restriction.

Option 2: Use Form ‘A’ or Form
‘M’ to request for foreign currency.

If your imports are not included in the banned list
http://nairametrics.com/cbn-bans-toothpick-indian-incense-and-these-38-other-imported-items-from-fx-market/
then you can apply for forex through your bank by filling a Form A for
invincible transactions and Form M for visible transactions.

Electronic Foreign Exchange forms (e-form M) and (e-form A) were introduced by
the Central Bank of Nigeria (CBN) and Nigeria Customs Service (NCS). The pilot
phase for the processing of electronic form M commenced November 22, 2012,
while the full implementation begins on December 06, 2012.

Features & Benefits e-form
M and e-form A

The automation of international trade transactions and

Reduction of turnaround time from importation to the clearing stage of all
international trade transactions.

The requirements for accessing
and using the single window platform include:

– Registration of Taxpayer Identification Number (TIN) at Federal Inland
Revenue Service (FIRS) offices.

– Validation of TIN by Customers with existing TIN at FIRS offices.

– Logging on to FIRS portal to register as ‘importer’.

– Logging on to https://app.trade.gov.ng/formx by Bank/customer to initiate the
e-Form ‘M’.

– Forwarding all original documents (Proforma Invoice, Insurance etc.) to the
Bank for approval.

– Kindly note that e-mail notifications will be sent to you once the Form M is
approved by the Bank and also when the Form M is accepted/rejected by the
Scanning Company.

Here is a guide on how to fill form M

Option 3: Wire Transfer

You can have a friend or BDC operator wire foreign currency to your account
while you pay them the Naira equivalent. This way you can avoid depositing
cash, however, banks often scrutinize any wire transfer in foreign currency
vigorously before approval.

Once you have funded your domiciliary account, you
can then transfer money to your debit card and use at your discretion or make
wire transfer payment for products/services.

Please share your view on these
steps or if you have any other solution we missed let us know below in the
comment section.