How did export data anomaly occur? Who is to blame – NBR or EPB?

Following the revelation of a $10 billion export data error, the Bangladesh Bank, Export Promotion Bureau (EPB), and the National Board of Revenue (NBR) are all deflecting responsibility for the error, raising questions about how such a significant mistake could occur.

Sources within the involved parties told TBS that the disparity arose because the NBR's customs department recorded multiple entries for the same export shipments.

Officials from the Bangladesh Bank and the EPB blamed it on the revenue authorities, saying their export data publications depend on information provided by the NBR. Meanwhile, NBR officials have refrained from directly addressing these questions, and no official has been willing to disclose their identity.

"The gap in export data has arisen due to double counting," a senior NBR official told TBS, on condition of anonymity.

The official also hinted that the issue could be linked to the software utilised by the NBR for storing export-related data.

State Minister for Commerce Ahasanul Islam Titu also said, "This issue stems from multiple counts by the NBR, which they have acknowledged. This has also been revealed through their own assessments."

Mentioning that the NBR is taking corrective measures, he said, "Until now, we [EPB] have relied on secondary data. Moving forward, we will scrutinise the data meticulously. We will not publish any data otherwise. Such mistakes won't be repeated.

"The EPB, which operates under the Ministry of Commerce, has been duly instructed in this matter."

Officials from the central bank also placed the responsibility on the NBR. A senior executive at the Bangladesh Bank said since the NBR is the primary source of export data, it holds complete accountability for the mismatch in data entries causing a deficit in the financial account.

However, another senior NBR official refused to accept full responsibility for the statistical gap.

Speaking to TBS yesterday, he explained, "Often, samples sent, discounted items, or rejected goods are not excluded from export figures. This is beyond the control of customs, as NBR discloses this information upon export.

"Besides, products sold by Export Processing Zones (EPZs) within the country are classified as exports as well."

Another officer from NBR's customs department said, "There is a shortage of manpower in NBR's customs, with over 80% of our workforce primarily focusing on imported goods. It is challenging to thoroughly monitor exported items."

Unlike imports, exports lack a direct revenue connection. Money laundering activities could potentially be facilitated through export channels, he added.

Regardless of the reasons behind this discrepancy, the massive miscalculation in export data will significantly impact the country's macroeconomic calculations, said analysts, implying that the credibility of data released by various Bangladeshi government agencies will now face scrutiny on the global stage.

Just a procedural error, or something bigger?

Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), told TBS, "The entire process requires serious scrutiny. Is this simply a procedural error, or is there something more to it? It is essential to investigate whether anyone has exploited this situation."

He said, "A committee should be formed to determine whether exporters exploited incentive benefits or money laundering were involved in this mistake."

Attempts to reach NBR Chairman Abu Hena Md Rahmatul Muneem for comment were unsuccessful.

The NBR has not provided any official explanation to the media regarding this matter yet.

BB and EPB to use same customs code

On 26 June, in a meeting chaired by Deputy Governor of Bangladesh Bank Md Habibur Rahman and attended by relevant parties, it was decided that all entities will use the uniform Customs Procedure Code (CPC) provided by NBR to accurately represent export figures.

It was noted that the Bangladesh Bank adheres to the Customs Procedure Codes (CPC) prescribed by the International Monetary Fund (IMF), which do not align with those of the EPB.

Furthermore, it was agreed that the EPB will revise the export data for the fiscal years 2022-23 and 2023-24 based on the updated information from the NBR. They will also coordinate with Bangladesh Bank's statistics department before publishing the revised export data.

EPB in trouble over release of revised data

A senior EPB official told TBS, "We have been instructed to release revised data for the past two fiscal years. We will prepare it upon receiving the updated information from the NBR, but this process will take at least a month."

The official expressed concern about potential scrutiny, stating, "If we disclose the revised data, we will face questions regarding its accuracy. People will question why and on what basis the previously published statistics have been changed."

"We will follow the directives of the Ministry of Commerce," he added.