The Nigeria Custom Service (NCS), the Manufactural Association of Nigeria, (MAN), and other stakeholders on Thursday faulted the Central Bank of Nigeria, (CBN) recent policy of e-valuation, e-invoice for import and export in the country.
This was as both agencies and other stakeholders appeared before the House of Representatives Committees on Customs and Excise as well as Banking and Currency to address issues arising from the introduction of the new system by the CBN.
While the CBN explained that the new system would plug leakages and enable the governemnt to recover more funds, the Customs said it was in violation of the law which did not follow due process as it would encumber trade.
MAN on its own declared that the policy was too hasty and was done without inputs from relevant stakeholders in the sector
The CBN had issued a circular that the new system would kick off on February 1, 2022, but the House had on January 27, 2022 suspended it and directed the apex bank to adopt a 90-day timeline for the implementation of fiscal measures to avoid destabilising effects on the economy.
The resolutions followed a motion moved by Chairman of the Committee on Customs and Excise, Hon Leke Abejide.
However, Director, Trade and Exchange of the CBN, Dr Ozoemena Nnaji, explained that the new system was seamless and integrated with the import and export process in a manner that would not hamper any of the stakeholders.
She added that the price of goods involved in a trade transaction is sometimes manipulated by those wishing to launder the proceeds through the financial system and some regulators suggested that a simple way to identify such activities is by banks implementing a price check on all trade transactions.
This, she said, is the goal of the new system that the CBN in collaboration with other MDAs is implementing.
According to her, “This would be one way of ensuring what we should earn in trade comes to us without loss of foreign exchange and duties. The main aim is to ensure that we allocate our scarce foreign exchange resources to imports and we collect the export duties and transaction values due to us at valued market rates,”.
She said an analysis of trade invoicing in Nigeria in 2014 show that the potential loss of revenue to the government was approximately 2.2 billion for the year, an amount, which represents, four percent of total annual government revenue as reported by the IMF, and representing approximately 15 percent of the country’s total trade.
But Assistant Controller General of Customs, Galadima Saidu, among other concerns, said the new CBN policy was in violation of World Trade Organization Facilitation Agreement of which Nigeria is signatory.
He said the use of bench-marking in valuation would negate the aim of the agreement on Customs valuation and would result in delays and uncertainties.
He said the use of bench-marking in valuation was abolished due to the dynamic nature of pricing especially in this current time when technology is rapidly evolving.
According to him, “Nigeria is a signatory to the WTO trade facilitation agreement. The agreement are legally binding with punitive measures that would adversely affect the Nigerian economy. The introduction of the CBN initiative is against Article 7 of General Agreement on tariff and trade 1994 and Article 1, 2 and 6 of the WTO TFA.
“The agreement aims for a fair, uniform and neutral system for valuation of goods for Customs purpose and it conforms to commercial realities and which outlaws the use of arbitrary or fictitious customs values. The use of bench-marking in valuation would negate the aim of our agreement on Customs valuation and would result in delays and uncertainties. The use of benchmarking in valuation was abolished due to the dynamic nature of pricing especially in this current time when technology is rapidly evolving”
He added that WTO agreement emphasizes the need for a timeframe for the publication of any additional fees or charges, hence the CBN circular to introdice the policy dated 21st January 22, with an effective date of 1st February, 2022 violated this.
He said the window which is just 10 days apart is too short and would disrupt the trade supply chain and revenue collection.
Saidu said that the Customs was only informed through newspaper publications on the introduction and effective date of the CBN initiative as there was no consultation done prior to the release to the public.
He said added that the Customs had a system that integrates with several partners and government agencies involved in international supply chain including CBN and authorized dealer banks.
He pointed out that the Federal Executive Council approved e-Customs as a programme that would serve as enabler for the national single window project, hence the introduction of a new system that would create another cumbersome process for the import and export would not help the economy.
According to him, “the introduction of additional fees and or charges and procedures though the e-evaluating and e-invoicing would definitely set back Nigerian traders and adversely affect Nigerian economy which has struggled to recover from two recessions in the past five years.
“It would not be in the best interest of CBN, NCS or the Nigerian Government to proceed with any initiative that would hinder Nigerian traders from being able to compete in this trying times”.
A representative of MAN, Folurunsho Adeyemi, said there is need to ensure the CBN does not go ahead to implement the policy without accommodating constructive inputs of stakeholders, especially those whose businesses would be negatively impacted.
This, he said, is necessary to ensure government does not create a regime of chaos that would decelerate the already low level of activity in the economy.
The Committees directed the CBN and Customs to harmonize their differing opinions on the import/export electronic invoice policy and report back on March 17, 2022 for further action.
Ruling on the matter, the Chairman of the Committee on Customs and Excise, Hon Leke Abejide said that the policy remains suspended until they come back and conclude on the way forward.
Chairman of the Committee on Banking and Currency, Hon Victor Nwokolo, said that there must be cohesion between both agencies of government.
According to him, “the aim of CBN is how do we check leakages of foreign exchange. How do we make the common man to feel they have government. How do we make them to have confidence in our economy. In as much as there leakages here and there in our foreign reserve, we are dealing with the common man.
“The whole idea is how do we generate revenue. The issue is quite interwoven. Please we want to appeal that the Min of Finance must be part and parcel of this meeting. This matter must be resolved. If the Finance Ministry was here, they would be able to shed light on these grey areas, but whatever it is, there must be cohesion. It is critical. Let us avoid what has kept Nigeria where we are where one agency is fighting another agency. There must be sensitization for people to know. We are agree with MAN that the time frame was not sufficient, therefore let us not do anything that would throw people out of jobs,” he said.
Other members of the Committees stressed the need for both agencies to work with the Ministry of Finance and other stakeholders to arrive on a common position as the CBN initiative is aimed at helping the country get funds that that are lost through leakages.
One of the lawmakers, Hon Sada Soli, said “What we are doing here is not to knock the heads of the agencies together. It is to bring them together to see how they can work together on this FG policy.
“Nobody is against this policy because what I understood from then presentation of CBN is that the crux of this policy is to remove fraudulent requests from foreign exchange on non existing trade and overall reduction on slippage.
“That is the key issue. There is a lot of fraud going on in this country with respect to importation and exportation of goods in this country. We need to nip this in the bud. That is the issue the CBN commissioned a study to look at how we can save our foreign reserve. We know some people are shortchanging some of the weak policies we have in this country.
“CBN has no issues in trading but to tighten our fiscal policy. So the issue is to bring them together. If they have not sat down to agree on one or two issues. Let us bring them together, let the Customs and Ministry of Finance, and CBN go sit down on the same template and bring a common position to this committee.”
Another lawmaker, Hon John Dyegh, said that both agencies were crucial to revenue generation for the country and cannot be allowed to keep disagreeing with themselves.L
Tinubu asks Senate to endorse $8.6bn, €100m loans approved by Buhari’s govt
President Bola Ahmed Tinubu has asked the Senate to give him the authorization to borrow $8,699,168,559 and €100 million to carryout critical projects across the country.
The president’s request was contained in a letter read at the commencement of plenary on Tuesday by Senate President Godswill Akpabio.
Tinubu, in the letter, explained that the request was part of the federal government 2022-2024 external borrowing plan approved by former President Muhammadu Buhari’s administration.
He said the projects to be funded with the loan cuts across different sectors of the economy, and were selected based on economic evaluation and the expected contribution to the country’s development.
The letter reads, “I write in respect of the above subject and to submit the attached the federal government 2022-2024 external borrowing plan for consideration and early approval of the National Assembly to ensure prompt implementation of the projects.
“The Senate may wish to note that the past administration approved a 2022-2024 borrowing plan by the federal executive council (FEC) held on May 15, 2023.
“The projects cut across all sectors, with specific emphasis on infrastructure, agriculture, health, water supply, roads, security, and employment generation as well as financial management reforms.
“Consequently, the required approval is in the sum of $8,699,168,559 and €100 million.
“I would like to underscore the fact that the projects and programmes in the borrowing plan were selected based on economic evaluations as well as the expected contribution to the social economic development of the country, including employment generation, and skills acquisition.
“Given the nature of these facilities, and the need to return the country to normalcy, it has become necessary for the Senate to consider and approve the 2022- 2024 external abridged borrowing plan to enable the government deliver its responsibility to Nigerians.”
Niger Coup: Northern Senators ask ECOWAS to lift restrictions on Niger Republic
***Plead with Tinubu to restore electricity supply to Niger
The Northern Senators Forum on Monday called on President Bola Tinubu to as a matter of Urgency use his position as Chairman of ECOWAS to lift restrictions on Niger Republic in the interest of business and border community
They also demanded that Nigeria restore electricity supply to Niger Republic in line with the Nigeria-Niger treaty mandate.
The senators had in July on the heels of the military forceful take over of the democratically elected government in Niger, cautioned President Tinubu against use of Military power towards tackling the military coup, as they called for diplomatic options.
A communique issued at the end of their emergency meeting which was read by the chairman of the forum, Senator Abdul Ningi (Bauch Central) stated, “The forum on very strong terms condemn the spate of Military intervention in the democratic spaces in the West African subregion.
“The Northern Senators Forum in particular condemns the coup in Niger and urged the military junta in Niger to soften the relationship with the rest of ECOWAS military by setting free President Muhammed Bazoum and his immediate family to freely choose a country of his choice for asylum
They further urged the junta in Niger to bring about a transition time table that will last not more than two years.
They ask ECOWAS to lift restrictions on Niger Republic in the interest of business and border community.
“It is important that Nigeriens should not suffer because of the coup that took place just like we have seen what is happening in Gaza
“We ask the President of the Federal Republic of Nigeria and the Commander in chief of the Armed forces and of course the chairman of ECOWAS, President Muhammed Bola Tinubu to as a matter of humanitarian gesture restore electricity supply to Niger Republic in line with the Nigeria-Niger treaty mandate.
Ningi called on Nigerians and Nigerien to remember that they remain brothers, partners and Africans and above all, we remain human beings
Senate okays 2024-2026 MTEF, FSP as it seeks to probe Tax Waivers from 2015 Till Date
The Senate has approved the 2024-2026 Medium Term Expenditure Frame Work (MTEF) and Fiscal Strategy Paper (FSP).
The upper legislative chamber also ordered an investigation into all tax waivers from 2015 till date and directed that all waivers not directly linked to non-governmental/non-profit organizations should not be granted.
The Senate observed that before waiver can be approved, there are certain conditions attached, adding that some people have been benefitting from the waiver year in, year out.
Addressing newsmen, shortly after the plenary, the Chairman of the Joint Senate Committees on Finance, Appropriations, National Planning and Foreign Debt, Senator Sani Musa, lamented that so much have been lost to the waiver.
He said: “We can not continue to talk of waiver while we kill our local manufacturers.
What we have today are catels, who are not given back to Nigeria. We will take the bull by the horn.”
He said that the customer told the Senate that the nation lost about N1.3 trillion to waiver, adding that it doesn’t make any economy sense, when waiver is granted, and nothing is gained.
In the report of the Senate Joint Committees, President Bola Ahmed Tinubu will borrow N7.8 trillion to fund the 2024 budget of N26 trillion that will be presented to the National Assembly soon.
In the budget, N8.2 trillion is earmarked for debt services.
In the report presented for consideration on the floor of the Senate, Sani Musa revealed that the federal government projected the reduction in inflation from 27.33 % to 21.4% in 2024.
“The total budget for the 2024 will be N26 trillion with N16.9 trillion in retained revenue, N243.6 billion for the sinking fund, the statutory transfer for the budget will be N1.3 trillion, N1.2 trillion. In pension gratuity and retirees benefits.
“The total recurrent (non-debt) of N10.2 trillion, personal cost of MDAs- N4.49 trillion, capital expenditure (exclusive of transfers ) -N5.9 trillion, special Intervention (recurrent)- N200 billion and special Intervention capital -N7 billion comprise the.aggregate of Federal government expenditure of N26 trillion,” the report said.
The report further reads: “Following the criteria in the overview of the framework for revenues and expenses, which forms the basis of the 2024 FGN budget FGN proposed spending N26 trillion, of which N16.9 trillion was retained, new borrowings of N7.8 trillion (including borrowing from foreign and domestic), debt service to revenue ratio of 49%, pension, gratuities, and retiree benefits of N12 trillion, and a fiscal deficit of N9 trillion (including GOES)
“The projected N16.96 trillion revenues to the federal government for the 2024 fiscal year is attainable with effective revenue monitoring exercise and oversight by the relevant Committees of the National Assembly
“The projected fiscal deficit of N9.048 trillion, N10.02 and N11.48 proposed for the 2024, 2025 and 2026 fiscal years are 22%, 13.6% and 1% lower than the N11 6 trillion fiscal deficit for the year 2023. The proposed strategy for the government in 2024 towards deficit financing is to increase funding from privatization proceeds and foreign borrowing and reduce funding from multilateral and bilateral project- tied loans and domestic borrowing
“The Federal Government’s commitments to progressively restructure its debt portfolio towards achieving a balanced domestic-to-external debt ratio is evident in the 2024-2026 MTEF and FSP
“A significant number of the Federal Government’s Revenue- Generating Agencies engaged in arbitrary, frivolous, and extra-budgetary expenditure.”
The oil bemcark is pegged at $73.6 per barrel with daily production of 1.78 million barrel per day with an exchange rate of N700 to $1 .
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