- Says global benchmarking will kill competitive pricing, bring problem with customs
By Anthony Nwachukwu
Citing a lack of dialogue with stakeholders who the policy will adversely affect and their inputs, the Manufacturers Association of Nigeria (MAN) has urged the Central Bank of Nigeria (CBN) to postpone by 90 days the commencement of its recently released import/export guidelines billed to take effect on February 1, 2022.
The 90-day window will enable the apex bank clarify and review contending issues, the MAN Director-General, Segun Ajayi-Kadir, explained in the association’s reaction to the January 21st mandate titled, “Guidelines on the Introduction of e-Valuation, e-Invoicing for Import and Export in Nigeria.”
Among the issues, MAN stated that though the guidelines were intended to sanitise foreign trade transactions, as they have some impact on Nigeria’s foreign exchange profile, the 11-day grace before implementation is “hasty.”
“A circular on monetary or fiscal guidelines requires adequate adjustment time,” it argued. “This is more so when it involves international trade and transactions, where a minimum of 90 days allowance is normally required, as many operators would have opened Form M and concluded deals either for import of export.
“Straightaway, one must say that transactions already embarked upon before the commencement of the guidelines should be exempted and the commencement date extended by a minimum of 90 days.”
Stating that the regulations are primarily to achieve a near accurate value of imports and exports in Nigeria, it noted that by implication, any Form M or NXP that bears a unit price in excess of 2.5 per cent of the verified global checkmate price will not be approved.
“This is concerning, as it will checkmate the opportunity of our exporters to derive higher value for their exports. Besides, we are worried about the determination of global price verification mechanism and benchmark prices.
“What happens if some companies are able to negotiate better prices due to their scale of order and are able to get competitive lower prices? Will these competitive prices be within the benchmark?
“Clearly, this aspect of the policy will lead to several challenges on valuation down the line, including a floodgate of valuation issues with the Nigeria Customs Service (NCS).”
MAN also seeks clarification on the CBN’s directive that “…the content of the electronic invoice authenticated by Authorised Dealer Banks is only advisory for the Nigeria Customs Service (NCS),” stating: “This means that the NCS may vary it, probably uplift the FOB when issuing the PAAR.
“MAN considers CBN and NCS as agencies of the Federal Government and hence should harmonise their functions in this regard, otherwise, businesses and indeed our members will be subjected to paying unnecessary and additional FOB uplift by the NCS.
“This is in addition to a situation that may arise where the CBN forces such importer or manufacturer to reduce price if considered not in conformity with the benchmark pricing.”
It also faulted the directive to suppliers and buyers to transmit their authenticated invoices through the CBN appointed service provider to the Nigeria Single Window portal.
Accordingly, “while MAN considers this measure a step to check perceived malpractices, we believe that the essence of single window policy is being diminished and this could introduce unnecessary bureaucracy with attendant multiple charges. It will also be a disincentive to local and foreign investors.
Also, “the annual subscription fee of $350 per authentication by suppliers on the portal meant to maintain the system is a clear disincentive to suppliers of imports to Nigeria, particularly raw materials and spares for manufacturers.
“This has potential of triggering a run-on on Nigerian businesses by their foreign partners and simultaneously encourage these suppliers to look elsewhere in the region as well as the continent.”