The recent e-invoicing policy that was introduced by the Central Bank of Nigeria will worsen Nigeria’s already bad international trade transactions process, increase transaction cost, entrench red tape, increase uncertainty, escalate business disruption, weaken investors’ confidence and heighten corruption risk.
This was disclosed in a statement sent to Nairametrics by Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise and former President of the LCCI.
He warned that there is no compelling justification for their introduction in the first place and urged the CBN to collaborate with the Nigeria Customs to address any gaps in the valuation processes.
What the CPPE is saying about the policy
The CPPE warned that last October, Director General of the World Trade Organization, Dr[Mrs.] Ngozi Okonjo-Iweala expressed worry over the high trade cost in Nigeria, which she said was an equivalent of 306% tariff, which is above the African average.
“Her assertion summarizes the harrowing experience of Nigerian investors in the international trade process.
“There are issues of overlapping regulation, excessive documentation, weak application of Technology, physical examination of cargo, extortion, inadequate cargo handling equipment, stifling bureaucracy, difficult transportation logistics, challenges of access to the ports and weak dispute resolution system. We should therefore be seeking to alleviate the pains of investors in the economy, not exacerbate to it,” they warned
They added that the E-invoice and E-evaluator policy will only worsen an already bad international trade transactions process.
“The policy will increase transaction cost, entrench red tape, increase uncertainty, escalate business disruption, weaken investors’ confidence and heighten corruption risk. The truth is that there is a strong correlation between red tape and corruption” they said.
They also warned that the increasing incursion of the CBN into the trade policy space is an aberration in Nigeria’s economic management system and a serious cause for concern to the business community, citing Issues of import valuation and classification that are statutory functions of the Nigeria Customs Service, with the Finance Ministry as the supervising organ.
They also warned that as CBN now undertakes valuation and product price benchmarking of imports and exports It will create an additional regulatory compliance burden and costs for the business community.
They urged The CBN could collaborate with the Nigeria Customs to address any gaps in the valuation processes, rather set up a parallel institutional framework and commends the prompt intervention of the House of Representatives on the matter.
What you should know
- Recall Nairametrics reported last month that The Central Bank of Nigeria (CBN) announced the introduction of e-evaluator and e-Invoice to replace hard copy final invoices as part of the documentation required for all import and export transactions, the new regulations orders that imports and exports with unit prices that are more than 2.5% of the verified global checkmate prices would be queried and will not be allowed for successful completion of either Form M or Form NXP.
- The CBN ordered that No importer/exporter may make a payment to a foreign supplier’s credit unless the electronic invoice has been authenticated by Authorised Dealer Banks and the required payment documentation have been supplied.
- According to the operational handbook for Form M and Form NXP e-Invoicing, a supplier/buyer of goods or services for import/export activities into or out of Nigeria must register on a specific electronic portal provided by CBN and administered by CBN’s agent service providers.
- The Nigerian House of Representatives ordered the CBN to halt the implementation of e-evaluator and e-invoicing for imports and exports businesses. According to the House, the CBN has increasingly shifted away from its basic role as a banker to the government, focusing more on fiscal policy measures, which are the responsibility of the Federal Ministry of Finance.