The Centre for the Promotion of Private Enterprise [CPPE] has urged the Central Bank of Nigeria to repeal its recently introduced electronic invoicing and evaluator for import and export trades.
The Apex Bank had commenced a new regime of e-invoicing and e-evaluator on February 1, to replace final invoice as part of the documentation required for all import and export Transactions in the country.
CBN said the new regulation is primarily aimed at achieving accurate value from import and export items in and out of Nigeria.
However, in a note signed by Muda yusuf, the Chief Executive Officer of the CPPE, the Centre noted that the e-invoice and e-evaluator policy would only worsen an already bad international trade transactions process.
He said the policy will increase transaction cost, entrench red tape, increase uncertainty, escalate business disruption, weaken investors’ confidence and heighten corruption risk, adding that there is a strong correlation between red tape and corruption.
He said: “The increasing incursion of the CBN into the trade policy space is an aberration in our economic management system and a serious cause for concern to the business community.
“Issues of import valuation and classification are statutory functions of the Nigeria Customs Service, with the Finance Ministry as the supervising organ. The decision of the CBN to now undertake valuation and product price benchmarking of imports and exports is a duplication of the statutory responsibility of the Nigeria Customs Service. It will create an additional regulatory compliance burden and costs for the business community.
“We therefore submit that the E-invoicing and E-evaluator initiatives be rescinded by the CBN.”
The Centre, through Yusuf, insisted that there is no compelling justification for their introduction in the first place.
Alternatively, he proposed that the CBN could collaborate with the Nigeria Customs to address any gaps in the valuation processes, rather than set up a parallel institutional framework.
Meanwhile, the CPPE commended the prompt intervention of the House of Representatives on the e-invoicing and e-evaluator matter, while also appreciating the concern of the CBN regarding malpractices in foreign exchange transactions.
Regardless, the Centre note that over eighty per cent of these misconducts are outcomes of the current distortions created by the current foreign exchange policy regime, especially the administrative fixing of the exchange rate.
“A parallel market premium of about 40 per cent offers an incredible incentive for roundtripping, brokerage activities and all manner of abuses in the forex market.
‘It is thus advisable to address the causes, rather than the symptoms of the problem. A market driven exchange rate will reduce, and possibly eliminate, these malpractices.
“Such a pricing framework will also reduce the distractions that the CBN has to grapple with on foreign exchange market challenges,” the said.
The Centre recalls that only last October, the Director General of the World Trade Organization, Dr Ngozi Okonjo-Iweala expressed worry over the high trade cost in Nigeria, which she said was an equivalent of 306 per cent tariff, which is above the African average.
She stated this while addressing the Mid-term Ministerial Performance review of the federal government.
According to the CPPE, her assertion summarizes the harrowing experience of Nigerian investors in the international trade process.
Specifically, 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,” Yusuf concluded.
