By Emeka Anaeto, Business Editor

As the Central Bank of Nigeria, CBN, forges ahead with the implementation of its e-valuator and e-invoice, the new international trade monitoring platform, stakeholders are commending the initiatives. But they are also recommending some adjustments to address possible unintended outcomes.

They also expressed confidence in the policy objectives especially with regards to the implication to Nigeria’s external sector.

But it also appears that some of the policy responders are yet to understand what it is all about.

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For instance, speaking against the backdrop of some protests from a section of the business community,

the Vice Chairman of the Association of Textile Dealers and Importers, ATDE, Mr Martins Egbuna, said that some of their members are still discussing and making enquiries with their banks on what they are required to do to be compliant with the policy. See Entovo Invoice Template

He stated: ‘‘Most of us did not even know there was such a policy; We just came back from Christmas and about to start business for the new year, but our banks started telling us about the new policy. So we are trying to understand it and see how we can do it.’’

The Policy

The CBN policy released on January 21, 2022, has said that all import and export operations will require the submission of an electronic invoice authenticated by the authorised-dealer banks on the Nigeria single window portal, Trade Monitoring System, effective from February 1, 2022.

In a circular signed by the Director, Trade and Exchange Department, Dr O. S. Nnaji, to all authorised dealers and the general public, the apex bank stated: ‘‘Further to the circular referenced TED/FEM/FPC/GEN/01/005 dated August 05, 2020, all authorised dealers and the general public are hereby informed of the introduction of e-valuator and e-invoice which replaces hard copy final invoice as part of the documentation required for all import and export transactions.

“Effective February 1, 2022, all import and export operations will require the submission of an electronic invoice authenticated by the authorised dealer banks on the Nigeria single window portal – Trade Monitoring System.

“This new regulation is primarily aimed at achieving accurate value from import and export items in and out of Nigeria.”

According to the CBN, the e-invoicing guidelines require that products that are more than 2.5 per cent around the vertical price would be queried and will not be allowed successful completion of Form M or Form NXP as the case may be.

It said an importer/exporter of goods into Nigeria must ensure that the purchase/sale contract with a foreign supplier/buyer stipulates compliance with the obligations set out in this regulation and that the supplier’s/seller’s invoice must be submitted in electronic format and authenticated by authorised dealer bank as part of the documentation for payment.

The circular added, “No importer/exporter may effect payment to the credit of any foreign supplier unless the electronic invoice has been authenticated by authorised dealer banks presented together with the relevant document for payments.”

This new guideline is mandatory for all imports above $10,000. These new e-Vouchers will be issued and authenticated by Authorized Dealer Banks (ADBs).

Importers of any good or service into Nigeria will have to register that good or service supplier into an electronic database. This database is updated annually. The importer of any good or service will then proceed to submit import papers to complete a Form M. Still electronically, the price the importer will quote will be based on a “Global Price Verification Mechanism (GPM) guided by a benchmark price. The GPM will advise a benchmark price for all goods and services, which is the actual spot price advised to the importer by the supplier. 

Some stakeholders have endorsed the policy as the right step in the right direction, but have also expressed diverse views on the implementation.

Manufacturers’ position

The Manufacturers Association of Nigeria, MAN, is concerned that the new e-invoicing guidelines may prevent manufacturers from getting the most out of their exports.

The new legislation, according to MAN, is targeted at obtaining the near-accurate value of imports and exports in Nigeria.

But the group claims that the new order on the sending of validated invoices will may be riddled with red tape and various fees.

They also said the 2.5 percent variation benchmark may checkmate the opportunity of exporters to derive higher value for their exports. They are also worried about the determination of global price verification mechanism and benchmark prices.

They wondered, ‘‘What happens if some companies are able to negotiate better prices due to their scale of order and are able to get competitive lower prices? Will these competitive prices be within the benchmark? Clearly, this aspect of the policy will lead to several challenges on valuation down the line, including a floodgate of valuation issues with Nigeria Customs Service.’’

MAN stated that the new move may disturb trade rather than promote it, mostly due to added bureaucracy with attendant multiple charges.

LCCI commends, recommends

The Lagos Chamber of Commerce and Industry (LCCI) has commended the CBN over this policy, especially at the backdrop of what obtained before the policy.

The Director-General of the Chamber, Dr Chinyere Almona, said the initiative was a major step to arrest the age-long practice of over-invoicing which dodgy importers and exporters had over the years used to cart away the nation’s forex.

According to the LCCI, the use of an e-Evaluator and e-Invoicing will speed up trade operations, increase income through more accurate invoicing, and minimize the time it takes to execute import and export paperwork.

The adoption of a Global Price Verification Mechanism led by a benchmark price, according to the LCCI, is also praiseworthy.

Almona, on the other hand, raised several concerns that the CBN should address in order to ensure success of the policy.

She said, “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.”

She also pointed out that the new guideline’s implementation date of February 1, 2022, was only 10 days after the guidelines were issued, which she felt was insufficient time for a smooth transition.

She pointed out that concerns of legal liability were not clearly mentioned in the guideline, and that the dispute resolution procedure needed to be explained.

“The CBN 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,” she added.

She stated that in order to build such a system, there should be more stakeholder participation and collaboration with the organized private sector.

A statement by the Chamber also said: “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 chamber also said the automation push should extend to port operations, where sensitive procedures are still performed manually, putting importers and exporters at a financial disadvantage.

Policy takeaways

As the new policy roll-out gets underway, most observers believe it is primarily aimed at achieving accurate value from import and export items in and out of Nigeria.

All import and export activities, according to the apex bank, will need the filing of an electronic invoice on the Nigeria single-window portal – Trade Monitoring System, which will be authenticated by authorised dealer banks.

No importer/exporter may make a payment to a foreign supplier’s credit unless the electronic invoice has been authenticated by Authorised Dealer Banks and the required payment documentation have been supplied.

According to the operational handbook for Form M and Form NXP e-Invoicing, a supplier/buyer of goods or services for import/export activities into or out of Nigeria must register on a specific electronic portal provided by CBN and administered by CBN’s agent service providers.

The validated e-invoices will be delivered to the supplier/buyer by the CBN designated Service Provider for transmission to the customer and payment negotiation. In addition, the CBN-approved Service Provider will send the e-invoices to the Nigeria Single Window Portal – Trade Monitoring System (TRMS).

Some import and export operations are exempted from the submission of e-invoices such as: All individual invoices with a value of less than USD10,000 (or its equivalent in another currency), except where Suppliers have an annual cumulative invoicing value equal to or above USD500,000 (or its equivalent in another currency) they shall submit e-invoices for all their operations, regardless of the individual value of an invoice.

Other exemptions are: Import and export transactions made by all security agencies in the Country; Supplies to diplomatic and consular missions and supplies to international agencies dependent on the United Nations; and Donations made by foreign governments or international organizations to foundations, charities and recognized humanitarian organizations.