WED 26 JAN, 2022-theGBJournal- The objectives for the introduction of E-Evaluator and E-Invoicing for import and export by the Central Bank of Nigeria (CBN) are quite commendable as it is expected to facilitate trade transactions, boost revenue through more accurate invoicing, and reduce processing time for import and export forms. The application of a Global Price Verification Mechanism guided by a benchmark price is also commendable.
As we transit to a more automated system, there is a need to increase our investment in digital infrastructure to support the innovative digital products that are emerging in the country. We also encourage the Federal Government to automate more processes to reduce human interface as a way of curtailing corruptive tendencies in our trade chain.
The automation drive should also move to port operations where there are still sensitive procedures done manually with attendant cost burdens on importers and exporters. Since the trade sector has shown some level of resilience and has become one of the fastest-growing sectors recording a year-on-year growth rate of 11.90 percent in the third quarter of 2021 and a contribution of 14.93 percent to GDP in Q3 of 2021, the government should do more to make the Nigerian trade system more efficient and easier to navigate by all parties.
This will boost our trade balance and position Nigeria to take advantage of the opportunities offered by the African Continental Free Trade Agreement (AfCFTA) which is expected to gain some momentum this year.
A few other issues requiring attention include:
-Ideally, for a critical change of this nature, there should be a pilot phase to help identify potential challenges and deal with these before the commencement date.
-The commencement date of 1 February provides only 10 days from the issuance of the guideline, which does not give sufficient time for proper transition.
-Issues of legal liability are not clear, and dispute resolution mechanisms need to be articulated.
-The Central Bank of Nigeria needs to establish an interactive and live customer complaints resolution section within the Trade Monitoring System to address any bottlenecks that may occur during transactions.
-There is a need to clarify if the subscription fee of $350 (US Dollars), is to be paid in Naira equivalence or foreign currency and if in US Dollars, whether affected users will be allowed to source the Dollars through the CBN.
-The 2.5 percent around the vertical prices appears stringent and should be reviewed to about 5 percent given that discriminatory pricing may be a factor.
-The exemption of imports worth $10,000 appears too low that no import will effectively be exempted.
-There should be sufficient transparency and governance around the CBN-appointed agents, and authorized dealer banks to ensure adequate independence and supervision.
Beyond these, consideration should be given to users of this platform that are Small & Medium Scale Enterprises (SMEs). We are also concerned about the potential impact of this new guideline on headline inflation.
Finally, there should be deeper stakeholder consultation and collaboration with the organized private sector in developing such initiatives to ensure that implementation is efficient.
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