New Telegraph

February 29, 2024

Pressure mounts for scraping of electronic invoicing initiative

Renowned economist and Chief Executive Officer (CEO) Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has called on the Central Bank of Nigeria (CBN) to scrap the recently introduced electronic invoicing and evaluation aimed at curbing foreign exchange (forex) malpractices.

 

Yusuf, a key member of the organised private sector, made this known in a press statement made available to New Telegraph in Lagos.

 

He said the new policy was worsening the already bad international trade transactions process and should be scrapped in the interest of boosting investor confidence in the Nigerian economy.

 

According to him, there is a concern among the business community on the electronic scheme in the country, which, if not addressed in time, could impact badly on investors trading on the international scene.

 

Yusuf said: “The Centre for the Promotion of Private Enterprise (CPPE) notes with concern the recent introduction of electronic evaluator and electronic invoicing by the Central Bank of Nigeria (CBN) purportedly to curb foreign exchange malpractices.

 

“We recall that only last October, the Director General of the World Trade Organisation, Dr. (Mrs.) 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. “Her assertion summarises 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 it.

“The electronic policy will only worsen an already bad international trade transaction process. The policy will increase transaction cost, entrench red tape, increase uncertainty, escalate business disruption, weaken investor confidence and  “She stated this while addressing the Mid-term Ministerial Performance review of the Federal Government.

 

“Her assertion summarises 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 it.

 

“The electronic policy will only worsen an already bad international trade transaction process. The policy will increase transaction cost, entrench red tape, increase uncertainty, escalate business disruption, weaken investor confidence and  heighten corruption risk. “The truth is that there is a strong correlation between red tape and corruption.”

 

According to him, “the increasing incursion of 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.”

To him, the decision of 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. He added that it would create an additional regulatory compliance burden and costs for the business community. Yusuf said: “We, therefore, submit that the initiatives be rescinded by CBN.

 

There is inno 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 than set up a parallel institutional framework.”

 

Meanwhile, the CPPE has commended the prompt intervention of the House of Representatives on the matter.

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