Why did the CBN introduce a new trade policy?

It is not easy to do business in Nigeria.

Either you avoid an increase in the cost of your already expensive inputs, or you avoid erratic government policies. Take the 2020 okada ban in Lagos for example. Prior to the ban, mobility startup, Gokada, was preparing to expand across Nigeria and had built a fleet of over a thousand motorcycles. Fortunately, they were able to pivot, but they shouldn’t have had to because of a disruptive state government.

Some takeaways:

  • The CBN’s recently launched electronic invoicing policy aims to address the problem of undervalued exports and inflated imports.

  • Although the policy aims to improve foreign exchange earnings from trade, it ignores issues such as the quality and cost of transport, making imports more expensive and exports cheaper than world market prices.

  • Nigeria is already known for its commercial tariffs significantly higher than the African average. With this new policy, the cost of trading with Nigeria will increase significantly.

You can find many similar examples in different industries. Either the Central Bank of Nigeria (CBN) freezes the bank accounts of wealth tech apps or it bans currency sales at Bureaux de Change (BCD). The list is lengthened increasingly. Government regulation is a constant threat, whether your business is technology-driven or operating in the real economy.

It is therefore not surprising that when companies hear that another CBN circular is circulating, people worry about the possible uncertainty it brings. This happened when the CBN Commerce and Exchanges Department announced the recent e-invoicing policy. According to the statement, international traders (importers and exporters) with invoices worth $10,000 would be required to submit an electronic invoice online. This guideline aims to ensure that the values ​​of goods entering and leaving Nigeria are bought and sold at the correct market price.

Basically, anyone wishing to import or export goods worth more than $10,000 must submit their invoice on the CBN platform to check whether the value of the traded goods is within the price range of the international market.

For exporters, if the value of their goods is less than 2.5% of the market price, the NXP form

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