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LCCI seeks resolution mechanism on goods classification under AfCFTA

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Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf


Preparatory to Nigeria’s commencement of trading under the African Continental Free Trade Area (AfCFTA), the Lagos Chamber of Commerce and Industry (LCCI) has called on the Federal Government to address concerns bordering its fiscal regime, especially as it relates to discretionary interpretations on product classification and valuation in Nigeria Customs Service (NCS)’s processes.

The chamber urged the government to create an independent appeal mechanism to settle disputes between the Nigeria Customs Service (NCS) and the business community.

Under the trading system, products will be classified and identified for tariff using HS codes and such classification has oftentimes been left ambiguous creating concerns among operators.

The harmonised system is an international nomenclature for the classification of products. It allows participating countries to classify traded goods on a common basis for customs purposes. At the international level, the Harmonised System (HS) for classifying goods is a six-digit code system.

LCCI Director-General of LCCI, Dr. Muda Yusuf, in a statement, noted that a resolution framework was needed as Nigeria prepares to commence trading under the AfCFTA.

“The LCCI calls on President Muhammadu Buhari to intervene by setting up an Independent Appeal Mechanism to deal with issues of valuation and HS classification between the Nigeria Customs Service and the Business community.

“This could be done within the framework of an Executive Order as this is necessary to restore the confidence of investors in the international trade process,” he said.

Yusuf added that the necessity of the framework was to ensure a balance among regulatory controls, revenue generation and trade facilitation functions of the Nigeria Customs Service.

He stated that the Nigerian business community had been left in a situation where most had to pay outrageous additional charges on imports, which distorted their investment plans and projections.

“Indeed, the biggest corruption risks in the interface between the Customs and the business community are around these two issues.

“This situation is hurting investors across all sectors – manufacturing, agro-allied, ICT, construction, services etc,” he added.
He said the present climate between customs and the business community hurts foreign investment coming into the country and also puts at risk potential investment in Nigeria, as it undermined economic diversification prospects, depressed capacity utilisation and limited the scope for job creation.

“It is also not consistent with the vision to make Nigeria a top investment destination,” he added.

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