Nigeria Import-Export Trade Info Portal

The Central Bank of Nigeria issued a circular dated January 21, 2022 with reference number TED/FEM/FPC/PUB/01/001 to all authorised dealers banks and the general public on the plan to modify the import/export process in Nigeria through the introduction of an e-evaluator and e-invoicing system for import and export trade transactions in Nigeria. The circular stated that the e-evaluator and e-invoicing will replace the final invoice which is a part of documentation required for import and export trade transactions in the country. However, there are a lot of questions begging for answers because there are so many gray areas in this circular that need to be addressed by the CBN before this new process goes live.

Firstly, the circular stated that the implementation of the e-evaluator and e-invoicing system will become effective for all import and export trade transactions in the country from February 1, 2022. This commencement date is just 11 calendar days and 6 working days from the date of issuance of the CBN circular on this new process and this is a very short time for the deployment of such a major change in the import and export trade processes in the country. The implication of this shortness of time is that some importers and exporters be caught unprepared in between a transaction and the CBN circular did not exempt on going transactions that have already been negotiated and the contract signed and the production of goods already commenced or the shipment of goods already done with the goods on the way to Nigeria. The trade agreement for such transaction will not have any clause that stipulates this regulation as stated in paragraph B of the the CBN circular. It will be great if the CBN can extend the implementation date of this new process by at least 3months to enable the stakeholders understand the process well enough before it commences. It is expected that this circular should exempt transactions that have already been signed with the Form M or NXP already approved and this means that this new process should therefore be applicable to any new Form M or NXP that is submitted after the commencement date of this new process.

According to the circular, “this new regulation is primarily aimed at achieving accurate value from import and export items in and out of Nigeria”. It also went further to state that the e-evaluator and e-invoicing system will operate on a global price verification mechanism guided by a benchmark price. In addition to this, it stated that any Form M or NXP that has a unit price that is more than 2.5% of the verified global checkmate price will not be approved. This is a great idea if this is implemented for Form M to ensure that over-invoicing is prevented to ensure that money laundering is prevented. However this should not be applicable for NXP in export business because it is preventing the seller in Nigeria from getting more value for the goods being shipped and this will prevent exporter’s from bringing in more foreign exchange that is desperately needed in this economy.

It is also important to state that each agricultural commodities being imported into and exported out of Nigeria have different qualities and these affect the prices of the items being imported or exported. Does this mean this pricing to be used as benchmark will capture the different prices of different qualities of commodities like raw cashew nuts, sesame seeds and cocoa? For example, will this platform have prices for raw cashew nuts that have very low nut count and high out turns (which are characteristics of high quality nuts)? Then another price for raw cashew nuts that have very high nut count and low out turns (which are characteristics of low quality nuts)? It is obvious that this is not likely going to be the case and that means that an importer or exporter would be prevented from doing their shipment if the quality of the commodity is low (but acceptable to the buyer). This therefore means that the price agreed by both parties would most likely going to be markedly different from the benchmark that CBN is using to evaluate the right price for the goods.

The circular also stated in paragraph D that the electronic invoice authenticated by the authorised dealer banks is only advisory to the Nigeria Customs Service (NCS). This means the NCS can still come back to the importer to uplift the FOB when issuing the Pre Arrival Assessment Report (PAAR). This will be done after the CBN might have reduced the invoice amount because it is higher than the benchmark price by more than 2.5%. Since the CBN and NCS are working for the same federal government, it will be better if both of them agree on the platform to be used for price verification and therefore work with the same benchmark price in order to ensure that the importer does not have to pay an additional duty for FOB uplifted by NCS after the CBN has forced the importer to reduce the price in the first place.

Also the suppliers and buyers of goods and services into or out of Nigeria are expected to register again on another dedicated electronic portal to be provided by the CBN and operated by an agent of CBN. Why the duplication of platforms for trade when everyone is clamouring for a single window for trade. According to paragraph H, the authenticated invoice will be transmitted from the CBN dedicated platform to the Nigerian Single Window portal for import and the Trade Monitoring System for export. Why can’t the new application be hosted on the current platforms for import and export trade in Nigeria so that the suppliers of goods into Nigeria and buyers of goods out of Nigerian can register on these platforms. This will therefore mean that, there would be no need for transmission from a CBN dedicated platform to the Nigerian Single Window portal for import and the Trade Monitoring System for export.

Considering the fact that trade, particularly exportation is desperately needed today for the growth of the Nigerian economy, is this decision to ask suppliers to pay not going to be discouraging? Also who exactly is to effect the payment of an annual fee of $350? Is it to be paid only by the suppliers of goods into Nigeria (as stated in paragraph I) or it include the buyers of goods out of Nigeria (since both of them are to register on the platform according to paragraph E). It is important to state that this policy can make suppliers and buyers abroad to consider other markets in order to reduce their cost of doing business. It will be great if the CBN can reconsider the payment of this fee by either reducing it or scrapping it altogether and look for other means of funding the maintenance of this platform. If this is not done, most suppliers are going to push back and make Nigerian importers to pay this fee if they need them to supply the goods to Nigeria and thereby further increasing the cost of doing import business in Nigeria.

There is also a confusion in the circular that needs to be clarified. When the circular says “buyer” does it mean the buyers of imported goods in Nigeria or the buyer of exported goods out of Nigeria? The reason for this question is that the paragraph E said the supplier/buyer is required to register and submit e-invoices to the CBN dedicated portal for validation and authentication. Since the supplier is the one to issue the invoice, why is “buyer” added to this statement. If the buyer in this case is buyers of imported goods in Nigeria or the buyer of exported goods out of Nigeria, does it mean they are to get the invoice from the supplier and then submit it for authentication? Does this statement in paragraph E on registration on the platform only applicable to supplier/buyer abroad and not importer/export in Nigeria?

The CBN would also need to clarify the confusion between paragraph B and paragraph G. This is because both paragraph talked about the suppliers submitting invoices but to two different organizations and platforms. Paragraph B stated that the invoice must be submitted in electronic format to authorised dealer banks while paragraph G said that the supplier is to submit e-invoice to a dedicated portal of CBN which is being managed by an agent appointed by the CBN. The question arising from these statements is as follows: is this the same invoice or they are different invoices (like pro-forma and final invoices) if they are different, it will be great if CBN can issue an addendum to this circular and clarify.

In conclusion, even though this circular might be well intended by the CBN but there is need for some modifications in the circular before a successful implementation can be achieved. These are my recommendations:

That CBN should issues an addendum to this circular to clarify some issues which are stated below
That the addendum to this circular should correctly define parties by stating who exactly CBN is referring to when it stated importer, exporter, buyer, and supplier in the circular
That the addendum to this circular should contain a transaction dynamics stating the step by step processes of how this new policy will work for both import and export transactions
That the the CBN should extend the date of commencement of the implementation of this new policy by at least 3months for proper sensitisation and education of the stakeholders
That Form M and NXP that have been processed and approved before the effective date of implementation should be exempted from this new process
That CBN needs to have series of stakeholders engagement and education for bankers, importers, exporters and the clearing and forwarding agent. These should be done separately for import transactions and export transactions
That CBN should consider either reducing the annual fee or scrapping it altogether and look for other means of raising money for the maintenance of the platform.

I believe that if the CBN would consider the recommendations made in this article and others that might be coming from the trade and banking communities, it will make what the CBN want to do to be more robust and there helping the apex bank to achieve the aims and objectives that it had in mind before embarking on this new trade policy of e-evaluator and e-invoicing system for import and export trade transactions in Nigeria.

For the love of Nigeria, Africa and Mankind.

Bamidele Ayemibo (bayemibo@3timpex.com)

Lead Consultant, 3T Impex Trade Academy