Nigerian manufacturers fault CBN over kick-off date of import, export e-valuation, e-invoicing

The Manufacturers Association of Nigeria (MAN) has disagreed with the Central Bank of Nigeria (CBN) over the commencement of the newly introduced e-valuation, e-invoicing policy for import and export.

In a statement signed by Segun Ajayi-Kadir, Director-General, MAN, the body of manufacturers in the country argued that the implementation of the new policy is hasty as the apex bank issued a circular announcing its introduction on January 21, for a policy which is slated to start on February 1.

“This is just 11 days grace before implementation. This is rather hasty. A circular on monetary or fiscal guidelines requires adequate adjustment time. This is more so when it involves international trade and transactions; where a minimum of 90 days allowance of time is normally required, as many operators would have opened Form M and concluded deals either for import or export. Straightaway, one must say that transactions already embarked upon before the commencement of the guidelines should be exempted and the commencement date should be extended by a minimum of 90 days,” it asserted.

The association also expressed worry over the CBN’s stance that any Form M or NXP that bears a unit price of more than 2.5% of the verified global checkmate price will not be approved.

MAN claimed “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 the 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 Nigeria Customs Service (NCS).”

The manufacturers asked the regulator to clarify paragraph D of the guidelines; wherein the CBN is directing that …” the content of the electronic invoice authenticated by Authorized Dealer Banks is only advisory for the Nigeria Customs Service (NCS)”.

“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 harmonize their functions in this regard. Otherwise, businesses and indeed our members will be subjected to paying unnecessary and additional FOB upliftment by the Nigeria Customs Service. This is in addition to a situation that may arise where the CBN forces such importer or manufacturer to reduce its price if it is considered not in conformity with the benchmark pricing,” it reasoned.

MAN noted that CBN decision to direct suppliers and buyers to transmit their authenticated invoices, which would be transmitted through the CBN appointed Service Provider to the Nigeria Single Window portal, may be borne out of the need to check perceived malpractices, it noted that the essence of Single Window’ policy is being diminished and this could introduce unnecessary bureaucracy with attendant multiple charges, adding that its members are already contending with this type of anomaly and could ill afford any addition as it will also be a disincentive to local and foreign investors.

“Finally, the annual subscription fee charge 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 the potential of triggering a run-on Nigeria business by their foreign partners and simultaneously encourage these suppliers to look elsewhere in the region as well as the continent,” it argued.

It called on the CBN to develop a clear, step-by-step process of transaction under the guidelines as this is necessary to ensure that government does not inadvertently create a regime of chaos that will decelerate the already low level of activity in the manufacturing sector in particular and the economy in general.