CBN Policy On Form ‘M’ Is an Attempt to Bring Back Pre-shipment Inspection, Kill Trade, ANLCA Raises Alarm

By DAPO OLAWUNI

The Association of Nigerian Licensed Customs Agents (ANLCA) has kicked against the recent policy of the Central Bank of Nigeria (CBN) on stoppage of middle-men in the opening of Form M and Product Price Verification Mechanism (PPVM), saying that this is an attempt to kill trade in Nigeria.

Speaking with newsmen in his office on Wednesday, National Vice President of ANLCA, Dr Kayode Farinto argued that the CBN by virtue of its Act is saddled with Monitary Policy and not Fiscal Policies, and should rather concern itself with stabilising Nigerian exchange rate.

Farinto who is also a board member of Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) argued that the product verification as being introduced by the CBN is an attempt to take Nigeria back to the stone age of pre-shipment era, even though Nigeria is now operating destination inspection.

According to him, by virtue of World Customs Organisation (WCO) and World Trade Organisation (WTO) agreements, it is the duty of the Nigeria Customs Service to treat issues of price verification and product values.

The ANLCA top man accused the CBN of ineptitudeness and suggested that the entire management team of the CBN should be sacked by chairman of the Nigerian EconomicTeam, Prof Yemi Osinbajo.

He argued that if the CBN goes ahead with its new policy, level of importation would drop because, already, importers are now confused.

“Nigeria is an import dependent economy, virtually everything here is imported, in the last one year, CBN has been placing different trade goods under import prohibition list, the list has increased to 85 items from 24 and this is causing serious crisis in the industry”

“Price regulations in importation of commodities is the sole responsibility of Nigeria Customs Service, what CBN should have done is allow the Nigerian Customs Service to do her job, WCO sees a situation where this can happen, and that was why we have the grant agreement and the WTO agreement about pricing and value of cargoes”

“If you are doing product price verification, you are taking us back to the pre-shipment inspection era, let it not be that CBN is coming through the back to to bring pre-shipment inspectors, because we are in the destination inspection era”

“The management of CBN is moving 1,000 steps forward, 20,000 steps backwards”

“Chairman of the Economic Team should talk to the management team of CBN, if I have my way, I would say that the entire management team should be sacked because it looks as if their ineptitudeness is now more obvious”

The CBN had said two days ago that it wants to ensure prudent use of foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing, double handling charges, and avoidable costs that are ultimately passed to the average Nigerian consumers, they are eradicating third party involvement in Form-M.

The CBN memo was signed by Dr. Ozoemena Nnaji, Director of Trade and Exchange, saying the apex regulatory body will no longer approve payment of foreign exchange to form-M applicants who do so through a company and agent, thereby eliminating third parties.

But in his reaction, Dr Farinto said “Whoever signed this circular does not have the interest of Nigerians at heart because what this policy means is that there won’t be third-party involvement in Form-M again and this would eliminate outsourcing, all over the world, outsourcing is allowed”

“In the last one year, about 81 items have been on the forex prohibition list, causing many importers not to want to declare what they bring in. As if this is not enough problem for us at the ports, the CBN alters the Naira exchange rate at its own whims and caprices. You can wake up tomorrow and the Nigerian Customs Services (NCS) will tell you that the CBN has changed the exchange rate. Now the CBN has banned third-party involvement in Form-M issuance. This is killing trade and will affect the nation’s import volume.

“There is no way we can do away with third party arrangement with the way global trade is currently. The CBN policy on Form-M is going to kill a major component of trade and ultimately kill our economy”

“What we expect CBN to be doing is to look at how to stabilise our exchange rate which has been fluctuating in the last four months. Last year, we were actually using N345 to a Dollar to process import declaration. This year, we are now using N361 to a Dollar to do the same job. As I am talking to you, we are already hearing that it will change to N381 to a dollar in the next few weeks. There is no predictability in our exchange rate, and this is not helping trade.”

“Nigeria has already entered into various agreements and protocols, like article 7 of the General Agreement on Tariff and Trade which requires six to five principles before a price is agreed. This product price verification implies that the CBN wants to employ an inspector and bring in pre-shipment inspection through the backdoor. Right now, many importers are already confused.” he reiterated.

He charged CBN to investigate why foreign exchange accrued from exports are not being remitted back to the banks in order to make the Naira stronger, instead of trying to regulate imports.

Farinto advised that National Financial Intelligence Unit (NFIU) should be allowed to do investigative work and bring back its reports.