While key players in the banking sector have expressed their discontent with the ways in which the Naira is presently handled, international businesses now share a similar sentiment towards some of the new policies introduced by the Central Bank of Nigeria (CBN).

Canadian firm, Manitoba Hydro International Nigeria Limited (MHINL), has finally agreed to receive outstanding invoices in Naira after what came across as a heated argument with the System Operations/Market Operations (MO) of electricity Transmission Company of Nigeria(TCN). Although the firm had previously alleged that part of the TCN opened a different bank account into which electricity funds were diverted, The Central Bank’s ban on payment into domiciliary accounts is also a factor to be considered in the MHINL squabble. MHINL remained adamant that pending funds be paid in U.S dollars by the Systems operations of TCN.

The Managing Director of MO, Mrs. Vera Osuhor, had insisted that paying in dollars would breach a CBN directive that stated that all payments must be made in local currency. In a bid to clarify the possibility of paying in dollars, MHINL had written CBN but got a response that only affirmed the MO’s position that every payment must be in Naira.

In as much as the MO made the right decision to follow the stipulated directive, the events that followed put a strain on business relations with the firm which was contracted to manage the electricity Transmission Company of Nigeria (TCN). It is also important to note that many other contracts to be paid in U.S dollars were signed before this ban and as such companies were faced with either paying in local currency or withdrawing the foreign currency cash or Naira equivalent.

In cases where as an individual or business, customers need to make and receive payments in a foreign currency, only a domiciliary account permits customers to have accounts in currencies other than the Naira. This disagreement further raised the question as to whether the entire drag may have been averted if CBN hadn’t put a ban on payments into domiciliary accounts.

In a circular released on August 6 and signed by the Director of Trade and Exchange, CBN, Olakanmi Gbadamosi, the Central Bank said the ban followed recent statements by individual banks suspending the payment of foreign currencies into domiciliary accounts. An action also aimed at stopping illicit financial flows in the Nigerian banking system, in alignment with the anti-money Laundering stance of the Federal Government.

The firm’s eventual acceptance of the Naira payment is contained in a letter signed by MHINL’s Director, Cassandra Siemens, and addressed to the Managing Director of System Operations/Market Operations (MO) of TCN. The MO was also asked to “immediately transfer 93,764.09 U.S. dollars in Naira “at the prevailing exchange rate,’’ into its Zenith account whose number was stated in the letter.

MHINL’s position that this mode of payment is that it will only be a “onetime exception,’’ illuminates the fact that the firm intends to subsequently receive dollar payments in future.

Manitoba had threatened to pull out if the TCN contract over alleged “substantial breach of contract. The firm alleged that part of the TCN had opened a different bank account into which electricity funds were diverted, giving the federal government a 14-day ultimatum within which to address its concerns. Also that TCN owed it outstanding invoices amounting to $3.4 million USD (N668 million) dating back to May 1, 2015.