Export Guidelines in Nigeria

©2003 Ernest Dio. All rights reserved.

Export Guidelines

Presented By:Ernest Dio

International Banking


Export GuidelinesExport prohibition ListAll exports must be inspected

Pre-shipment ExemptionMode of payment: L/C, Bills,Advance paymentAppointed Agent is Cobalt Int’l ServicesInspection Location:

Point of production or storageFarm gatesSeaports,airports,terminals,other exit points

Form NXP must be completed by Exporter


Exports Guidelines)Form NXP must be registered with a Bank

Documentary Requirements for NXP Form:Completed NXP in Original & 5 copiesNEPC Registration CertificatePro-forma invoice/contract of sale/purchase orderDetails of how proceeds are to be repatriated

Processing of NXP Form by the Bank:Review the submitted documentationAllocate a 15 digit Ref. Number to the NXP Form (XXX/YYYY/ZZZ/0001Endorse & stamp section 6 of the NXP Form The Bank retains Original Endorsed NXP Form Exporter is given Photocopy of endorsed NXP Form 5 copies are forwarded to the Inspection Agent


Pre Shipment Inspection ProcessExporter

Obtains RFI (Request for Info.) & NXP Forms from BankCompletes RFI & NXP Formssubmits RFI to Agent & NXP to the Bank for endorsementpays NESS fees through Designated BankExporter invites all relevant govt. agencies to Inspection (E.g. NAFDAC,SON, Plant Quarantine, etc.)

Exporters Bank/Endorsing BankProcesses/endorses the NXP formEndorses NXP, Keeps original & fwds 5 copies to Agent

Designated Bank forwards original NESS fees rcpt to AgentPays NESS fees to nearest CBN branch the next Monday


Pre shipment Inspection Process Pre – Shipment Inspection Agent

Receives RFI from Exporter & NXP from the BankPromptly agrees Inspection Date with ExporterAssesses quality,Quantity & Price of the goodsSeals the container & indicates seal No. on CCIContainer is sealed in presence of the govt. agencies.Issues CCI (Clean Certificate of Inspection) for a satisfactory inspectionDistributes 8 originals of CCI:

FMF,customs (area comptroller at shipment point), NPA,exporter,shipper, Bank, CBN, NEPC,

Distributes 2 certified true copies to FOS & Customs (Head quarters)Updates the relevant section of the NXP FormKeeps the duplicate & sends remaining 4 copies to customs


Pre shipment inspection processCustoms Service

After shipment of goods,customs update the relevant section of NXP, retain duplicate and distribute remaining 3 copies:

4th Copy to CBN5th copy to NEPC6th Copy to Exporter

Exporter shall give a photocopy to his bank for their records


Discrepant goodsDiscrepancy in quality,quantity & Price

Non negotiable report of inspection is issuedExporter is expected to correct discrepanciesOn correction of discrepancy, CCI is issuedOn non correction within 72 hours

Non negotiable Cert. Of Inspection (NNCI) issuedNNCI prohibits export of the goods

Discrepancy in ValueDiscrepancy report issued for exporter to make necessary amendments/payments


OthersThe Exporter must

present a copy of the CCI to the shipping company to facilitate shipmentsubmit a copy of the transport document (airway bill,bill of lading,etc.) to the inspection agent after shipmentPresent to the bank, a copy of the NXP endorsed by customs, this is proof of shipmentSubmit all original Bills of Lading to the bank that processed the NXP for ‘collection’. The bank must then send the dox to it’s correspondent and follow up to ensure that collection is effected within 90 days.


NESS (Nig. Export Supervision scheme) FeesI% of FOB value of the consignment (NXP)Payable through designated Bank and receiptedDesignated Bank must state NXP No. on NESS fee rcpt.Duplicate rcpt given to Export & Original to PSI AgentTriplicate Receipt is retained by Designated BankDesignated Bank pays fees to neares CBN office the following week MondayThe Bank must render monthly to:

CBN (Director Trade & Exchange)The AGFFMF (The Hon. Minister)

Exports Regulations ‘Cont’d’


Export ProceedsExporter

must open Non-Oil Export Dom A/c with the Processing BankMust repatriate Export Proceeds within 90 days

Processing BankMust Ensure that proceeds are repatriated within 90 daysFor repatriated shipments, Must certify the original NXP and submit same to CBN


Financing the ExporterOverdraft/term LoanAccomodation FinanceAcceptance CreditsAdvance Against CollectionRed Clause Letter of CreditFactoringForfaitingNegotiation


AFREXIMAfrican Export Import BankOwes it origins to ADB (1987 meeting)Considerations for Establishment

Low level of Intra African TradeDecline in Financial flows to AfricaSharp reduction of lending to Africa by Foreign banksWorsening External Debt SituationNeed to spearhead intra & extra African Trade


Afrexim (Major Objectives)


Afrexim Who Can Borrow from Afrexim

Members of Participating statesGovts have shares/have ratified the bank’s agreement

Shareholders in non participating statesOthers only if the financing will be used to pay for imports from a participating state

Financing ChannelsMostly through trade finance intermediaries

Central Banks,commercial banks, other Trade Finance entities

Intermediaries selected after rigorous due diligenceOperational,Financial & Management Performance

Limited Direct financing of Exporters & Importers


AFREXIMFinancing Instruments

Lines of CreditL/C Confirmation linesPre & Post Export CreditGuaranteesProject related financing in support of export projects


Afrexim Products & ServicesLine of Credit Programme

Indirect lending thro credit worthy banksFor small & medium sized ExportersShort term financing (tenor<=360 days)Pricing:

linked to LIBOR & tied to country risk;Transaction risk & mkt conditions. Commitment & facility fees also payable

Documentation:Facility agreement, sales contract assignment & Security assignment deeds


Afrexim Products & ServicesDirect Financing Programme

Direct funding of Corporates with min. bal sheet size of $2mm & min Export turnover of $10mmFacilities:

Pre & post export financing up to 80% of sales contract L/C issuance facility (Afrexim can lend to max. 70% of sales contract)Export Credit Guarantee

Documentation:Facility agreement,sales contract,assignment,debentures

AssessApply to president of Afrexim with detailed info on organization,ownership,history,mgt experience, 3 yr financials as well as detailed info on the transaction for which financing is sought, the country of operation, etc


Afrexim Products & ServicesSyndications Programme

Risk sharing to attract other Int’l Banks

Forfaiting ProgrammeTrade in trade receivable on a without recourse basis

Special Risk ProgrammeComfort to Int’l banks extending facilities to African BanksIt is a country risk guarantee facility

Factoring/Invoice Discounting ProgrammeNote Purchase/Discounting ProgrammeProject Financing Programme

For Imports of export manufacturing equipmentFor essential govt. projects that positively impact the export sector


Afrexim Products & ServicesFinancial Future-Flow Pre-Financing Programme

Future flow debt offerings that do not rely on receivables generated from export of physical goods for repayment

Infrastructural Services Financing ProgrammeFinancing to exporter of infrastructure services to Africa e.g. electricity pending receipt of payment from the project promoters/users in Africa

Investment Banking ProgrammeExport Advisory services to Banks/govts/corporatesUnderwriting services for debt & equity backed by export secured debtAssist with valuation of companies for Initial public offeringsAssistance in securitization of receivables


NEXIMMain Services

Rediscounting & Refinancing FacilityAssists banks to provide lcy financing to exporters

Foreign Input FacilityA Fcy facility payable in fcy –used for importation

Stocking FacilityLcy facility for raw materials procurement

Treasury OperationsCounter guarantee fundsFunds managements/placements

Price Guarantee ContractsA facility that insures against adverse changes in Price

Export Advisory Service & Market Information


Export Processing Free ZonesObjective

Promotion of the diversification of the nation’s export base through the acceleration of export business through loaded incentives

Playersindustrial production, offshore banking, insurance, int’l stock, commodities and mercantile exchanges, commercial industrial research, agriculture and agro-allied industry, mineral processing, as well as international tourist resort development and operations


Export Processing Free ZonesIncentives

Tax holiday reliefNo Levies, duties and foreign exchange rules Unrestricted remittance of profits and dividends earned by foreign investors in EPZsNo import or export licenses requiredrent-free land during construction of premisesUp to 100% foreign ownership of enterprises in EPZsSale of up to 25% of production permitted in domestic market


Export Processing Free ZonesPioneer Status Companies

3-5 YRS Tax Holiday (exports of at least 50% of annual production)

Tax Relief on Interest IncomeInterest on loans granted for export activities

Capital Assets Depreciation Allowance5% on plants & machinery (exports of at least 50% of annual turnover

Investment ProtectionExpropriation

NIPC decree guarantees against nationalization, expropriation and compulsory purchase


Offences & SanctionsOffences

Carriage of goods from Nigeria without a CCIExport of goods not exempted from Inspection without a CCIVariation b/w goods presented for loading and those confirmed by the CCI

SanctionsIndividuals: Twice the value of the goods (Min.NGN50k) or 12 months imprisonment or bothCorporates: Twice the value of the goods (Min. NGN100k)


THANK YOU

Documents

Export Guidelines in Nigeria