By Merit Ibe
Centre for the Promotion of Private Enterprise (CPPE) has condemned increasing incursion of the Central Bank of Nigeria (CBN) into the trade policy space, saying it is an aberration in in the country’s economic management system.
The centre, which noted with concern the recent introduction of e-evaluator and e-invoicing by the apex bank, purportedly to curb foreign exchange malpractices, said issues of import valuation and classification are statutory functions of the Nigeria Customs Service (NCS) with the Finance Ministry as the supervising organ.
CPPE Chief Executive Officer, Dr Muda Yusuf, who called for scrapping of the scheme, said it would only worsen an already bad international trade transaction process. He posited that the decision of CBN to undertake valuation and product price benchmarking of imports and exports is a duplication of the statutory responsibility of the NCS.
He said it would create an additional regulatory compliance burden and costs for the business community.
Citing a statement by the Director General of the World Trade Organisation, Dr Ngozi Okonjo-Iweala that the high trade cost in Nigeria was an equivalent of 306 per cent tariff, which is above the African average, Yusuf said the assertion summarised the harrowing experience of Nigerian investors in the international trade process.
He lamented 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 to exacerbate it.
“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. 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. 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-evaluator and e- invoicing initiatives be rescinded by the CBN. There is no compelling justification for their introduction in the first place. The CBN could collaborate with the Nigeria Customs to address any gaps in the valuation processes, rather set up a parallel institutional framework.
Meanwhile, the CPPE has commended the prompt intervention of the House of Representatives on the matter.
“The CPPE appreciates the concern of the CBN regarding malpractices in foreign exchange transactions. But the truth is that over 80 percent 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.