Nigeria’s non-oil export has come under serious threat as exporters say they are finding it extremely difficult to export agro commodities following the delay in obtaining the Nigerian Export Proceeds (NXP) Number, a new procedure introduced by the Central Bank (CBN).
As a result, agro commodities worth billions of naira are stuck in warehouses at a time the country direly needs foreign exchange.
The CBN, in a circular with the number TED/FEM/FPC/GEN/001/008 dated October 6, 2020, had said it observed with dismay the non-compliance by shipping and airline companies to the provisions of the circular referenced TED/FEM/FPC/GEN/01/009 dated June 6, 2017, requiring that Bills of Lading/Airway Bill in respect of exports from Nigeria must carry the Form NXP number in respect of the underlying cargos.
“In line with the provisions of these circulars, shipping and airline companies are required to access the Trade Monitoring System (TRMS) platform to generate Form NXP numbers for capture on the Bill of Lading for export cargoes. Consequently, all shipment of export cargoes from Nigeria shall with effect from the date of this circular be in accordance with the aforementioned procedures,” the circular said.
The circular, which was addressed to all authorised dealers, Nigeria Customs Service (NCS), Nigerian Shippers’ Council, Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), Shipping Companies, Airlines Companies, among others, was signed by Ozoemena Nnaji, director, Trade and Exchange Department of the CBN.
But operators say the new clearing procedure is causing a major setback to the country’s diversification and export drive as it has increased the turnaround time of export trade, leading to losses especially in the export of perishable agro commodities.
Tola Faseru, vice president of, African Cashew Alliance, said the compulsory Export Proceeds (NXP) number is the greatest problem exporters currently face after foreign exchange issues.
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Faseru said the policy has grounded the country’s export businesses and has also increased the congestion at Lagos ports as export containers are being delayed for too long because it now takes months to get approval since the CBN is the one giving approval.
“The business turnaround time for exporters has increased because of this policy. Many ships are coming in but are going empty because of this policy,” Faseru told BusinessDay in an interview.
“This is going to affect the image of the maritime industry and the economy at large. When shipments and exports are not going out, how can we earn foreign exchange?” he asked.
Citing an example, he said his company has about 60 export containers that have been stuck in the port for two months because the CBN is not granting the Export Proceed Number as fast as it should.
“When one’s goods have gone through all the clearance stages, the person now has to wait to get NXP approval from the CBN. There are backlogs of containers of up to 1,000 at the ports that are waiting to get that approval and the process of approval from CBN is slow,” Faseru said.
“Most of the agro products are perishable commodities and after the delay the goods will still spend another month on the sea, depending on the designation. In case of perishable items, such goods may arrive at the destination already bad,” he said.
Victor Iyama, president, Federation of Agricultural Commodity Association of Nigeria (FACAN), who confirmed this development, described the new export procedure as a very obnoxious policy that will only further kill the export business.
Nigeria’s export trade is already affected by so many factors and the CBN’s slow process of approving NXP number will eventually kill export trade completely, Iyama said.
“It will destroy the country’s non-oil export. The country needs foreign exchange and if our agro commodity is taking us two to three months before we can ship them, then how do we earn the foreign exchange?” he asked.
Tony Anakebe, managing director, Gold-Link Investment Limited, a clearing, and forwarding company, while acknowledging the delay in getting the approval from CBN, said the policy is facing teething problems that need to be rectified by the apex bank.
He described the procedure as a way the CBN regulates the inflow of foreign exchange into the country.
He said though the approval is difficult to obtain, the policy would in the long run have a positive economic impact in-country as it would enable CBN to ensure the repatriation of foreign exchange earned from export back to the country.
