How MTN’s $13.92b transfer issue forced CBN to begin automation of CCI
Indications have emerged from the Central Bank of Nigeria (CBN) that it has started the automation of issuance of Certificate of Capital Importation (CCI), to make the process simpler and stress free for foreign investors.
The development according to experts is to remove documentation bureaucracy and official confusion in either inflow or repatriation of capital and further align Nigeria with international best practices, improve service delivery and investors confidence.
Business Hilights recalls that the Red Chambers of the National Assembly was mid September distracted with issues relating to how and when leading Communications giant, MTN Nigeria moved its $13.92b profits away from the economy.
Though the Senate called for a public hearing on the matter, at the end, it was clear that the company complied with extant laws and regulations on capital importation even as Nigerians wait for the report, possibly this week.
Observers are beginning to understand that the apex bank may have understood that part of the cause of the alleged error was due to the continued analogue nature of the practice following the ongoing move to automate the scheme.
CCI is a certificate issued by a Nigerian bank confirming an inflow of foreign of capital, either in form of cash (loan or equity) or goods, and usually issued in the name of the investor within 24 to 48 hours of the inflow of the capital into Nigeria.
The primary purpose of CCI is to guarantee access to the official foreign exchange market for repatriations of capitals and returns on investment-dividends, interest and capital on divestment.
It was gathered that CBN recently issued an instruction to money deposit banks that all active CCI should be migrated to electronic based system as physical CCIs will be phased out once this application goes live.
Some lenders have given their customers up till the end of November for submission of necessary documents.
The directive briefly sited by our correspondent Friday while charting with an official of a Tier 2 bank read in parts: “In line with this directive, please submit the originals of all active CCIs to your branch or nearest branch on or before 28, November, 2016, in order to help us capture and migrate your data to the new system.”
But looking at the matter, a financial analyst, Dr. Godwin Gaga saw the move as recovery efforts by the apex bank designed to improve the ease of doing business ranking for which Nigeria had been rated poorly.
He said “Whilst we believe the move by the CBN to automate the issuance of CCI is a step in the right direction, Nigeria, currently at the base of the ranking (169th) on ease of doing business, CBN needs to do more regarding the development.
“The overwhelming challenges in the forex market, particularly the persistent liquidity crisis and perceived lack of transparency at the interbank market remain a bottleneck in the capital importation process.
Gaga was of the view that “We expect that the lingering currency risk will continue to weigh on foreign investors’ sentiment, despite the attractive market valuation of financial security and real assets.
Another pundit, Dickson Angus, a director at Standard Trust Asset Management group said the automation is long overdue but expresses doubt on its ability to resolve the inherent challenges in the foreign exchange market.
He argued that the introduction of electronic system of issuing CCI is a positive development and part of what needs to be done to ease the process of doing business in Nigeria.
“Since the capital or foreign currency importation comes vide the CBN official widow, the issuance of the certificate should be as easy as the receipt you are issued when you buy a commodity through POS because the intended use of the capital is part of importation documentation.
According to him, “What the CBN is doing now is to some extent belated because the cloudy situation of the CCI practice in Nigeria has already embarrassed the country as one that hates or disallows foreign investors to take home their profits seamlessly”.
“It is however, doubtful if the new system would significantly ameliorate the current forex crisis the nation is going through now.
Other analysts that spoke on the matter on Sunday said Nigeria needs a truly transparent foreign exchange market that is subject to interplay of supply and demand. Our demands for goods and service is already adjusting to the realities of the dwindling fortune of the county/.
Historically, CCIs have been issued in hard copies and for repatriation purposes; the hard coup of the CCI has to be marked down by the bank.
This has lead to a situation where an investor is unable to, make repatriation in the event that the original CCI had been lost or destroyed.
The CBN has now decided to automate the process by migrating to electronic CCIs (e-CCIs).
The e-CCI would be on a server maintained by the CBN. The e-CCIs will make it easier to process transactions, ease the process of tracking translations and make it easier to amend the CCI where an investor transfers investments in Nigeria to another investor.
Generally, the move by the CBN will give prospective investors the faith that they are protected at all times.
