Thursday, June 27, 2019

Improving Export Trade Data in Nigeria Through CBN TRMS

The Central Bank of Nigeria (CBN) governor Godwin Emefiele recently announced that the CBN is almost set to launch a Trade Monitoring System (TRMS) in October 2019. This is an automated system that is designed to reduce the length of time required to process export documents from about one week to just one day. This is a system designed by the government to improve the processes involve in shipping goods and services out of Nigeria. This is a much-awaited initiative and innovation of the Central Bank which has been delayed for so long. Many people in the sector has been clamoring for the need to automate export processes in Nigeria in order to ensure that the timeline required for processing of documentation is significantly reduced. 

Another value of the TRMS is the fact that it will likely correct the discrepancies seen in the export data reported by different agencies of government in the country. For example, the export data from the Pre-Shipment Inspection Agent (Cobalt) is different from the export data from CBN, the data from CBN is different from the data obtained from the National Bureau of Statistics (NBS). This distortion in the data is results from the uncoordinated way in which the data is being collected without any thorough monitoring. That is why the launching of the TRMS is extremely important.

It is also important for CBN to understand that the reason why some export data cannot be captured in Nigeria and put this into consideration in the development of the TRMS. This is because some foreigners are sent into Nigeria to export as a foreign representative of manufacturing companies. Another category use export to clean illicit funds via trade-based money laundering while the last category deliberately hides their export from the eyes of government to avoid the payment of tax. The individuals, who are foreigners should be of interest to CBN because, they come into Nigeria to buy commodities and ship them out to their companies who use these raw materials. Since they are not planning to set up any business in Nigeria, they partner with a Nigerian to be able to operate an account to receive dollar and convert it to Naira to be able to buy the raw materials.

It is also interesting to know that no products would leave the shore of Nigeria, especially containerized items, without passing through Nigerian Customs Service. The question we should begin to ask is, whether the NCS is aiding the exportation of products out of Nigeria without documentation. The TRMS will be able to help answer that question if eventually NCS will have to see that the NXP for any transaction is registered on the TRMS before they will approve such a transaction for loading on the ship for exportation out of Nigeria.

When CBN issued the policy that NXP number must be stated on the Bill of Lading, it was as if that will be the solution to ensuring that every export out of Nigeria is documented. But alas! The exported circumvented this. What has happened was that exporters just simply concoct their own NXP number and they give it to the shipping line to put it on their Bill of Lading in line with the CBN regulation. If the shipping line is made to insist that they get the actual NXP document from NCS to extract the NXP number on the document themselves, this would have curb this menace of undocumented export but the CBN regulation was not thought through and therefore did not envisage these sharp practices and make hence no provision was made to prevent it.

However, with TRMS, it will be necessary for the shipping line to have access to the portal to be able to check the detail of the transaction themselves after NCS approval in order to pick the NXP number directly and insert it on the Bill of Lading. This means that after custom have approved the goods for shipment, the shipping line should be able to spot this transaction on the TRMS to obtain the NXP number from the application and put it on the Bill of Lading. If this becomes the case in the export clearance process in Nigeria, it will significantly prevent the export of products out of Nigeria without documentation. So, at the end of the day, data obtained from outside the country from bodies like World Trade Organization, World Top Export etc can be similar to that which NBS and CBN are releasing to the public. It is not enough for CBN to launch the TRMS, it has to ensure that all the agencies involved in the clearance of goods for export in Nigeria are carried along in order to get their commitment to support the implementation of the TRMS in order to make it a success.

Finally, I will like to commend the effort of the management of the CBN for eventually actualizing the dream we have all have regarding the automation of the export business documentation and processes in Nigeria.

Friday, June 21, 2019

Starting & Managing Export Business Part 1

Hello everyone, please join me on an amazing journey in this over 80 parts series on Starting and Managing Export Business on Youtube