Streamlining The New Export Documentation & Procedures: Doing More Harm Than Good To The Exporters – NPNEN
The Network of Practicing Non-oil Exporters of Nigeria has said that streamlining the new export documentation & procedures: is doing more harm than good to the exporters.
The Network of Practicing Non-oil Exporters of Nigeria is an umbrella association with primary vision to create a hub of interconnected players in the non-oil export sector, collectively committed to leading the advocacy for the creation of an enabling environment for non-oil export trade, and ensure a larger share of global markets for Nigeria’s physical goods and services.
The statement read, “As players in the sector and direct beneficiaries or victims of Government’s policies, we have deemed it necessary to issue this press release in order to offer some suggestions on how the recently pre-export procedures introduced by the Central Bank of Nigeria, (CBN) requiring exporters to process electronic Nigeria Export Proceed (eNXP) form, can be properly implemented for optimum compliance that ensures a win-win outcome for the Nigerian Government as well as exporters.
“While we acknowledge that this procedure is well-intended by the CBN, and has the potential to move the nation further closer to global best practices of automated processes and streamlined documentation, we will like to bring to the notice of the CBN that the transaction dynamics, as being currently implemented, is doing more harm than good by creating a lot of bottlenecks that were not part of the process before. We also acknowledge the CBN’s desire to ensure that all export out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.
“However, the reality in the field shows that the process is causing undue delays and consequently, encouraging corruption. The recent report in the December 9, 2020 edition of The Guardian Newspaper to the effect that about N868billion worth of goods bound for export are stuck at the ports dictates a compelling need for urgent attention to reverse the ugly trend.
“For example, the new procedure requires that an export transaction be initiated through eNXP processing on the Trade Monitoring System (TRMS), after which the Pre-shipment Inspection Agent (PIA) the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.
“The PIA then issues a Clean Certificate of Inspection (CCI) while the Customs issues the Single Good Declaration (SGD). For the PIA to issue the CCI, the exporter is required to upload a Certificate of Origin (CoO) as one of the supporting documents for the eNXP. The PIA is also required to upload the CCI to the TRMS(M) and until this is done, Nigeria Custom Service (NCS) will not issue the SGD. After issuing the SGD, the NCS is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.
‘These several layers of activities are generating serious problems in the new process and are now constituting a disincentive to formal exports out of Nigeria. First of all, asking for CoO as a compulsory requirement for pre-export documents when the agency issuing this document requires a copy of the Bill of Lading (a document obtained after shipment) is a contradiction.
“To get the Bill of Lading number and container number means that an exporter will remain stuck if he does not find a way to get these Bill of Lading details from the shipping line before the original is issued. Another problem is that there is no timeline given to the PIAs and Customs to issue and upload this document.
“Also, there is lack of capacity to enable the agencies to efficiently and effectively handle the volume of shipments from the different parts of the country. Besides, frequent system downtime and network issues hinder or delay the issuance of and uploading of documents onto the system.
“The protracted delays caused by all these new processes are causing deterioration and losses for Agro commodity exporters, forcing many exporters to miss their allocated shipment periods, and consequently, loss of future business opportunities.
“Another issue that is making exporters not to want to document their export is the exchange rate. What CBN did not realise is that as the exchange rate of Naira to dollar is rising, the local market price for the products are also rising but the export market price remain stable or even decline from the impact of COVID-19.
“So someone that is exporting Hibiscus flower that use to export a tonne at about N380,000 when exchange rate was N360 to a dollar now has to pay about N445,000 per tonne to export the same products due to increase in cost of products and logistics while the export market has largely remained stable.
“This means that the only way to break-even is to leverage on the exchange rate differential. However, a situation where the exporter is forced to sell at 380 via the I&E window will mean a loss to the exporter and this will be a disincentive to use NXP or the bank in their export process.
“As practicing exporters and operators of the procedures, NPNEN wishes to recommend the way forward for the CBN, so as to be able to reverse this ugly trend as soon as possible. First, the CBN needs to remove CoO as part of pre-export document as it is actually a post-shipment documentation requirement. It can be submitted online immediately after shipment.
“The penalty on any company that fails to submit this document would be an inability to process a fresh eNXP for their next shipment. Second, CBN needs to set a clearly-defined timeline for the processing, issuance and uploading of CCI & SDG by the PIA and NCS respectively.
“It is only when the system is set and properly understood that sanctions for non-compliance can be activated. Third, the units issuing these documents in all the agencies need to commence night shift so as to clear all the backlog while the agencies are working to build capacity and staff strength. Fourth, there should be deployment of high speed and very reliable Internet service and systems in order to speed up the work of these agencies.
“Most importantly, releasing circulars and introducing procedures without engaging the practitioners has the potential risk of ending up counter-productive, We therefore request that the CBN consider the need to urgently have an online stakeholders meeting with the exporters, NCS and the PIAs and other relevant players in the documentation chain with a view to discussing all other issues and agreeing on the best and practicable way forward.
“Once again, NPNEN commends the CBN in finally automating the export process in Nigeria. The benefits of the initiative will be huge if its design captures the evidential inputs of the players. This is where the role of the private sector, in this case, the practicing exporters comes to play.
“Basically, what is required for exports to grow and thrive is to build supply-side capacity and appropriate systems needed to expand trade in order to benefit from enhanced integration into the world economy. This is the core focus of export development and this is what NPNEN was created for – to provide evidence-based input from the field that will enable the formulation of proactive policies that will enable export growth to happen.
“The Central Bank of Nigeria no doubt has the power (and the money) to enable export to grow, but they cannot and must not do it in isolation. The dialogue approach will definitely help the CBN’s desire to see more inflow of non-oil export dollars into the nation’s economy, and a speedy reversal of the recent slide in the country’s currency, the statement concluded