CBN policy on Form-M will kill trade, ANLCA raises alarm

The Association of Nigerian Licensed Customs Agents (ANLCA) has raised the alarm that the recent ban imposed by the Central Bank of Nigeria (CBN) on third party arrangement will kill trade and reduce the volume of import coming to Nigeria.

Addressing maritime journalists in Lagos on Wednesday, Vice President of ANLCA, Kayode Farinto lamented that the ploy by the CBN to ban third party arrangement in Form-M will end up taking away jobs from Nigerians.

According to the ANLCA Vice President, “The CBN issued a statement recently banning third party participation in Form-M issuance. This was disclosed in a circular dated 24th of August.

“The CBN said that 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.

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“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. Why is the CBN dabbling into fiscal policy issues? Why is CBN not focusing on the monetary policy function that is germain to its operation?

“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.

“Globally, outsourcing is acceptable. There is no way we can do away with third party arrangement with the way global trade is currently is. 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.”

Also, Mr Farinto explained that the CBN policy on product price verification will take Nigeria ten years backwards.

“The CBN product price verification policy simply means that they want to bring us back to the pre-shipment inspection era. Nigeria is already in the destination inspection era, we just hope that the CBN is not taking us back to the pre-shipment inspection regime.

“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.”

Recall that the CBN, in a memo signed by O.S. Nnaji, Director of Trade and Exchange, said it will no longer approve payment of foreign exchange to form-M applicants who do so through a company and agent, thereby eliminating third parties.


CBN policy on Form-M

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