Customs Disagrees With CBN Over e-Invoice Policy
Concession over the e-valuation and e-invoice policy for import and export came to a dead end on Thursday, 3rd March when the Nigeria Customs Services pointed out its reservation over the Central Bank of Nigeria (CBN) initiative.
The Apex Bank and Customs Services, as well as other stakeholders, had appeared before the House of Representatives Committees on Customs and Excise as well as Banking and Currency to address disparities arising from the introduction of the new system by the CBN.
The CBN noted that this policy is important to curb leakages and enable the government to recover more funds. However, the Customs reported that it was in violation of the law as the policy did not follow due process and would restrict trade and trading activities.
Stakeholders like the Manufacturers Association of Nigeria (MAN) stated that the policy by CBN was too hasty and was done without inputs from relevant stakeholders.
Investors King recalled that the apex bank had issued a circular that addresses a new system to kick off on February 1, 2022. However, the House had on January 27, 2022, placed it on hold as it directed the CBN to adopt a 90-day timeline for the implementation of fiscal measures to avoid destabilising effects on the economy.
According to the CBN, the prices of goods in trade transactions are sometimes manipulated by some stakeholders wishing to launder proceeds through the current financial system. The CBN has proposed that a simple way to identify such activities is by banks implementing a price check on all trade transactions, hence the need for the e-valuation and e-invoice policy.
However, while this sounds like a progressive idea from the CBN, the new policy may be in violation of the World Organization Trade Facilitation Agreement of which Nigeria is a signatory.
According to Assistant Controller General of Customs, Galadima Saidu, “Nigeria is a signatory to the WTO trade facilitation agreement. The agreements are legally binding with punitive measures that would adversely affect the Nigerian economy. The introduction of the CBN initiative is against Article 7 of the General Agreement on tariff and trade 1994 and Article 1, 2 and 6 of the WTO TFA. The agreement aims for a fair, uniform and neutral system for valuation of goods for Customs purpose and it conforms to commercial realities and which outlaws the use of arbitrary or fictitious customs values. The use of bench-marking in valuation would negate the aim of our agreement on Customs valuation and would result in delays and uncertainties. The use of benchmarking in valuation was abolished due to the dynamic nature of pricing, especially in this current time when technology is rapidly evolving,”
The House of Representative Committees has also directed the CBN and Customs to harmonize their differences on the new policy and report back on March 17, 2022, for further action.
Unilever Nigeria to Focus on Higher Growth Opportunities by Exiting Home Care and Skin Cleansing Markets
Unilever Nigeria Plc, one of the leading Fast-Moving Consumer Goods (FMCG) companies, has announced its decision to exit the home care and skin cleansing markets.
The company disclosed that the decision would only affect three of its brands – OMO, Sunlight, and Lux. According to Unilever Nigeria, the move is aimed at accelerating the growth of the organisation and sustaining profitability.
The restructuring of Unilever Nigeria’s business model is in response to the tough business environment in Nigeria, where many organisations and individuals have found it difficult to access cash due to the Naira redesign policy of the Central Bank of Nigeria (CBN).
Unilever Nigeria’s Managing Director, Mr Carl Cruz, noted that the offloading of the home care and skin cleansing portfolios would enable the company to “concentrate on higher growth opportunities.”
Unilever Nigeria has a strong competition in the business categories it is exiting. However, the company’s products are also market leaders in the sector. Mr Cruz added that the company was repurposing its portfolio by gradually exiting two categories, home care and skin cleansing, affecting only three brands (OMO, Sunlight, and Lux).
This would allow Unilever Nigeria to drive the rest of its brand portfolio for growth into the future and strengthen business operations with measures to digitize and simplify processes.
Unilever Nigeria is a truly Nigerian business and the oldest serving manufacturer in the country. The company’s decision to exit the home care and skin cleansing markets is in line with its commitment to adapt to changing market circumstances and reposition itself to better meet the needs of its consumers, shareholders, and employees.
Mr Cruz said, “By making these changes, we will unleash the sustained and profitable growth we need to be here for the next 100 years as well.”
Merger and Acquisition
Access Bank Zambia Granted Approval for Atlas Mara Zambia Merger
Access Holdings Plc has announced that its subsidiary, Access Bank Zambia Limited, has received final regulatory approval from the Central Bank of Zambia for the acquisition and merger of African Banking Corporation Zambia Limited (Atlas Mara Zambia).
The move is a significant step towards the creation of one of the top five banks in Zambia.
Sunday Ekwochi, Company Secretary of Access Holdings, stated that the latest development is a big step towards the earlier announcement made on October 25, 2021.
This approval comes after the Central Bank of Nigeria (CBN) and Common Market for Eastern and Southern Africa Competition Commission granted their “no objection” to the transaction in 2022.
Access Zambia will now begin the process of integrating and merging Atlas Mara Zambia into its existing operations. The merger is expected to boost Access Bank Zambia’s position in the Zambian banking sector and create more opportunities for its customers.
Access Holdings Plc is committed to expanding its operations and presence in Africa, and this acquisition and merger is a testament to its efforts in achieving that goal. The company believes that this move will strengthen its position as a leading financial services provider in the region.
Dr. Herbert Wigwe, Group Chief Executive Access Holdings, while commenting on the transaction, said: “The transaction builds on our earlier acquisition and merger of Cavmont Bank Plc into Access Bank Zambia and underscores our resolve to strengthen our presence in Zambia, a key African market that fits into our strategic focus on geographic earnings growth and diversification”.
Merger and Acquisition
First Citizens BancShares Acquires Silicon Valley Bank’s Deposits and Loans in FDIC-Assisted Deal
On Monday, First Citizens BancShares Inc announced that it had acquired the deposits and loans of Silicon Valley Bank (SVB) following its failure earlier this month.
This acquisition marks a significant step forward in addressing the global financial markets’ ongoing crisis of confidence.
As part of the deal, First Citizens BancShares will assume SVB’s assets including $110 billion in assets, $56 billion in deposits, and $72 billion in loans. The Federal Deposit Insurance Corporation (FDIC), which took control of SVB, will receive equity appreciation rights in First Citizens BancShares stock with a potential value of up to $500 million.
First Citizens BancShares described itself as having completed more FDIC-assisted transactions since 2009 than any other bank. It believes that the combined company will be resilient with a diverse loan portfolio and deposit base.
The bank’s statement also noted that its prudent risk management approach would continue to protect customers and stockholders through all economic cycles and market conditions.
In addition to the acquisition, First Citizens BancShares will receive a line of credit from the FDIC for contingent liquidity purposes. Again, the bank will have an agreement with the regulator to share some losses on commercial loans to provide further downside protection against potential credit losses.
While analysts said the move was positive for financial stability and the venture capital industry, they noted that it only addressed the issue of deposits leaving smaller banks for larger banks or money market funds up to a point.
Redmond Wong, Greater China market strategist at Saxo Markets, said that “First Citizens Bank’s acquisition of the SVB loan book and deposits does not add much to solve the number one issue that the U.S. banking system is now facing.”
SVB’s failure was the largest bank to fail since the 2008 financial crisis. Its closure on March 10th caused massive market disruption and heightened stresses across the banking sector globally. The acquisition of its deposits and loans by First Citizens BancShares is a step towards stabilizing the sector and restoring confidence in the global financial markets.
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