Post by Trade Forum on Feb 1, 2021 14:02:17 GMT 1
FGN To Lose $2.6 Billion In The Next Three Months Due To CBN’s Pre-Export Policy
In the next three months, the FGN may lose a whopping $2.6 Billion due to the problems faced by exporters on the nagging issue of pre-export policy of the CBN.
To avoid this, Nigerian exporters are crying out to FGN; want CBN to revisit the contentious pre-export policy.
From official statistics, Nigeria earned $10.4 Billion in 2019, so if the country earned that in 12 months, it therefore stands that in three months, we can earn $2.6 Billion from non-oil exports.
The Customs and Excise department of the Federal Government says that the logjam caused by the pre-export policy will be over in three months’ time. This was disclosed by the Federal House of Representatives Committee on Customs and Excise after their visit to Onne port in Rivers State on oversight function.
Nigerian exporters under the umbrella of Network of Practicing Non-oil Exporters of Nigeria (NPNEN) recently cried out to the Federal Government of Nigeria (FGN) through the Central Bank of Nigeria (CBN), the organ of the government entrusted with management of exports proceeds in Nigeria.
This cry by the exporters, especially the non-oil exporters is based on the policy of the CBN of the submission of NXP form to the appropriate financial authorities before engaging in any form of export from Nigeria.
The policy was changed so that the form will no longer be in hard copy format but rather in electronic form, i.e. it has to be done only through the CBN platform.
See the verbatim report of the circular from the CBN below:
“On Monday, October 28, 2019, the Central Bank of Nigeria ("CBN"), pursuant to powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 1995 to issue guidelines regulating export and import trade transactions in collaboration with relevant governmental entities, issued a circular tagged "Automation of Form "NXP" on the Trade Monitoring System ("TRMS") (the "Automation Circular").
As provided in the CBN's Revised Foreign Exchange Manual, 2018 (the "Revised FX Manual"), any person intending to export any product from Nigeria shall, in the first instance, process the Nigerian Export Proceeds Form (generally known as "Form NXP") through an Authorized Dealer Bank, irrespective of the value and whether or not payment is involved. Form NXP is used for commercial exports.
Overview of the provisions of the Automation Circular
Pursuant to the Automation Circular, with effect from Thursday, October 31, 2019, e-Form 'NXP' has replaced the hard copy Form NXP hitherto used for processing commercial exports (including oil & gas and non-oil & gas exports) from Nigeria. As from that commencement date of the automation process, a fee in the sum of Five Thousand Naira (N5, 000.00) shall be charged per declaration for e-Form 'NXP'.”
We have seen the contents of the circular from CBN above; let us now go in detail to unravel what the grouse is between the Association and the CBN.
NPNEN claims that the policy has the tendency to jeopardize export business, economic growth and diversification of the nation’s economic base through the non-oil sector.
The president of the association, Ahmed Rabiu, indicated that the chaotic condition at the Apapa port in Lagos was caused by the policy. From the statement, it can be deduced that the association is claiming that the issue of the policy and other discouraging conditions at the port are disincentives to the formal export business in Nigeria.
The terrible conditions at the port show lack of capacity on the side of the managers of the port to allow the agencies to efficiently handle the volume of shipments from different parts of the country.
In another event recently, the House of Representatives has asked the management of the Nigerian Customs Service and the Central Bank of Nigeria to fast-track the automation of the processing of the export documentations required at the ports to avoid unnecessary delays.
They were not happy with the current situation at the port as it has caused the government huge revenue losses.
The call was made by the Chairman of the Technical Committee of the House Committee on Customs and Excise, Honorable Leke Abejide, when he led members of the committee on an oversight to the Area 2 Customs Command at Onne, Rivers State. He told them that the lack of automation is slowing down export activities at the port.
In the same vein, the officials of the shipping lines at the Onne port in Rivers state complained to the committee that it is difficult to process their export documents as they are still using manual methods in processing the NXP form.
However, there was a rise in hope as the Customs Area Comptroller, Onne Customs Command, Auwal Mohammed told them that the automation process has started and will soon be stabilized. How soon, we are waiting for them.
In the next three months, the FGN may lose a whopping $2.6 Billion due to the problems faced by exporters on the nagging issue of pre-export policy of the CBN.
To avoid this, Nigerian exporters are crying out to FGN; want CBN to revisit the contentious pre-export policy.
From official statistics, Nigeria earned $10.4 Billion in 2019, so if the country earned that in 12 months, it therefore stands that in three months, we can earn $2.6 Billion from non-oil exports.
The Customs and Excise department of the Federal Government says that the logjam caused by the pre-export policy will be over in three months’ time. This was disclosed by the Federal House of Representatives Committee on Customs and Excise after their visit to Onne port in Rivers State on oversight function.
Nigerian exporters under the umbrella of Network of Practicing Non-oil Exporters of Nigeria (NPNEN) recently cried out to the Federal Government of Nigeria (FGN) through the Central Bank of Nigeria (CBN), the organ of the government entrusted with management of exports proceeds in Nigeria.
This cry by the exporters, especially the non-oil exporters is based on the policy of the CBN of the submission of NXP form to the appropriate financial authorities before engaging in any form of export from Nigeria.
The policy was changed so that the form will no longer be in hard copy format but rather in electronic form, i.e. it has to be done only through the CBN platform.
See the verbatim report of the circular from the CBN below:
“On Monday, October 28, 2019, the Central Bank of Nigeria ("CBN"), pursuant to powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 1995 to issue guidelines regulating export and import trade transactions in collaboration with relevant governmental entities, issued a circular tagged "Automation of Form "NXP" on the Trade Monitoring System ("TRMS") (the "Automation Circular").
As provided in the CBN's Revised Foreign Exchange Manual, 2018 (the "Revised FX Manual"), any person intending to export any product from Nigeria shall, in the first instance, process the Nigerian Export Proceeds Form (generally known as "Form NXP") through an Authorized Dealer Bank, irrespective of the value and whether or not payment is involved. Form NXP is used for commercial exports.
Overview of the provisions of the Automation Circular
Pursuant to the Automation Circular, with effect from Thursday, October 31, 2019, e-Form 'NXP' has replaced the hard copy Form NXP hitherto used for processing commercial exports (including oil & gas and non-oil & gas exports) from Nigeria. As from that commencement date of the automation process, a fee in the sum of Five Thousand Naira (N5, 000.00) shall be charged per declaration for e-Form 'NXP'.”
We have seen the contents of the circular from CBN above; let us now go in detail to unravel what the grouse is between the Association and the CBN.
NPNEN claims that the policy has the tendency to jeopardize export business, economic growth and diversification of the nation’s economic base through the non-oil sector.
The president of the association, Ahmed Rabiu, indicated that the chaotic condition at the Apapa port in Lagos was caused by the policy. From the statement, it can be deduced that the association is claiming that the issue of the policy and other discouraging conditions at the port are disincentives to the formal export business in Nigeria.
The terrible conditions at the port show lack of capacity on the side of the managers of the port to allow the agencies to efficiently handle the volume of shipments from different parts of the country.
In another event recently, the House of Representatives has asked the management of the Nigerian Customs Service and the Central Bank of Nigeria to fast-track the automation of the processing of the export documentations required at the ports to avoid unnecessary delays.
They were not happy with the current situation at the port as it has caused the government huge revenue losses.
The call was made by the Chairman of the Technical Committee of the House Committee on Customs and Excise, Honorable Leke Abejide, when he led members of the committee on an oversight to the Area 2 Customs Command at Onne, Rivers State. He told them that the lack of automation is slowing down export activities at the port.
In the same vein, the officials of the shipping lines at the Onne port in Rivers state complained to the committee that it is difficult to process their export documents as they are still using manual methods in processing the NXP form.
However, there was a rise in hope as the Customs Area Comptroller, Onne Customs Command, Auwal Mohammed told them that the automation process has started and will soon be stabilized. How soon, we are waiting for them.
