Key Points
- CBN discontinued the price verification system portal
- Expert underscored the importance of collaboration between CBN and the private sector
- Executive orders have been consistently violated
- Fiscal policy protection to support domestic investments in petroleum refineries
The Centre for the Promotion of Private Enterprise (CPPE) has applauded the Central Bank of Nigeria (CBN) for its decision to discontinue the Price Verification System Portal. This portal was viewed as unnecessary due to its replication of functions already carried out by the Nigeria Customs Service.
Purpose of the Price Verification System Portal
The Price Verification System Portal was an online platform introduced by the CBN to ensure that the prices of goods and services for foreign exchange transactions were accurately verified. It aimed at preventing over-invoicing and under-invoicing, thus ensuring fair pricing in Nigeria’s import and export activities.
The CPPE highlighted that the existence of such a system was a direct consequence of the challenges posed by an ineffective foreign exchange regime.
Importance of Collaboration Between CBN and Private Sector
The Chief Executive Officer of CPPE, Dr Muda Yusuf, underscored the importance of continued collaboration between the CBN and the private sector in order to gather reliable, data-driven feedback on the impact of monetary policies.
This call for sustained engagement aims to ensure the formulation of policies that are not only effective but also responsive to the dynamic needs of the private sector.
Yusuf’s recommendation underscores the significance of fostering a partnership that prioritises transparency, accountability, and mutual understanding between regulatory bodies and private enterprises.
Challenges of Overlapping Regulatory Functions
Dr. Yusuf emphasized the need to identify and eliminate overlapping regulatory functions that impede domestic and foreign investments.
He pointed out that numerous regulatory overlaps exist with institutions such as the Federal Ministry of Environment, National Environmental Standards and Regulations Enforcement Agency (NESREA), state environmental protection agencies, and local government environmental units.
Additionally, there are overlapping functions involving the Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), Nigeria Agricultural Quarantine Service, Weights and Measures Department, and the Federal Competition and Consumer Protection Commission (FCCPC).
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These overlaps create avoidable distractions and significant financial burdens for investors.
“We should identify other overlapping regulatory functions which have continued to constitute impediments to domestic and foreign investments. The impact varies across sectors.
“Some of these regulatory overlaps exist with respect to the following institutions: Federal Ministry of Environment, National Environmental Standards and Regulations Enforcement Agency (NESREA), state environmental protection agencies, local government environmental units, and state waste management agencies.
“There are also the overlapping functions in respect of SON, NAFDAC, Nigeria Agricultural Quarantine Service, Weights and Measures Department, Federal Competition and Consumer Protection Commission [FCCPC]. These are some of the numerous regulatory institutions with overlapping mandates. They are sources of avoidable distractions and significant financial burden to investors.”
Impact on the Logistics Sector
Dr Yusuf highlighted the challenges faced in the logistics sector, noting that numerous regulatory and institutional obstacles posed by a multitude of state and non-state agencies create a complex and challenging environment for investors.
Agencies involved include the State Vehicle Inspection Office (VIO), Federal Road Safety Corps (FRSC), state traffic agencies, revenue-generating units, local government traffic units, and various state and local revenue-generating agencies on highways, as well as non-state actors.
Executive Orders and Their Implementation
Dr Yusuf stressed the importance of effectively implementing Executive Order 003, which stipulates that preference should be given to local manufacturers and service providers in the public procurement of goods and services by Ministries, Departments, and Agencies (MDAs).
Executive Order 005 focuses on enhancing local content in public procurement, especially in science, engineering, and technology components.
He expressed concern that these executive orders have been consistently violated without consequences. As a result, Yusuf called on the presidency to ensure compliance by MDAs with these executive orders, aligning with current efforts to bolster domestic production, nurture local talent, and revitalize the economy.
Fiscal Policy Measures to Support Domestic Production
He commended the removal of import duties, Value Added Tax, and excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment, and machinery.
He noted that these fiscal policy measures would boost domestic production of pharmaceutical products, reduce the cost of medications, improve access to healthcare, and positively impact citizens’ well-being. Additionally, these measures would revitalize the pharmaceutical industry and create more jobs.
Recommendations for Other Sectors
Yusuf recommended that similar fiscal policy measures be applied to other segments of the real sector to boost production. He suggested interventions in agriculture, agrochemicals, and agro-allied industries to curb food inflation, the energy sector to promote energy security and incentivise private investments, and the iron and steel sector to aid the construction industry and reduce construction costs for housing and infrastructure.
Need for Fiscal Policy Protection in Petroleum Refineries
Dr Yusuf emphasised the need for fiscal policy protection to support domestic investments in petroleum refineries to conserve foreign exchange, create jobs, and deepen backward integration. He noted a global trend of economic nationalism and stressed the importance of strengthening domestic production capabilities across all sectors.
Fiscal policy measures have proven more impactful on real sector performance than monetary policy, and the real sector of the economy deserves to be effectively protected and incentivized to improve production and ensure sustainable investments.
