Victor EzejaThe Central Bank of Nigeria (CBN) has increased the foreign exchange (FX) rate for calculating Customs duties by 19.43 per cent in one week following the recent depreciation of the naira in the forex market.
Prime Business Africa observation shows that on April 23, 2024, the FX rate for Customs duties was pegged at N1,150.16 per United States dollar. This further increased to N1,373.646 as of Tuesday, April 30, 2024, according to data on the Customs Exchange Rate obtained by Prime Business Africa from the single window trade portal of the Federal Government. This reflects a N223.486 or 19.43 per cent increase.
The FX rate for calculating import duties has been going up and coming down due to instability in the value of the naira in the forex market.
After recording some level of appreciation around N1,100/$1 between last month and some weeks in April, the naira has recorded a significant drop in value with the rate rising above N1,400 against the greenback.
READ ALSO: FX Rate: Customs Exchange Rate Drops Below Official, Parallel Market Rates
The naira recorded a decline of N1,419.11/$1 on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM) where the local currency is officially traded. This is a 5.96 per cent drop from the N1,339.23/$1 recorded on Friday, April 26, 2024.
This latest increase in import duty rates means that importers who opened Form M on Tuesday would pay more for clearing cargoes from the nation’s ports than those who did so last week.
Since the current government came on board with its economic reforms last year, the rate for Customs duty has undergone a series of adjustments in line with the official exchange rate. The CBN directed the Nigerian Customs Service to be using the rate on the date of submitting Form M for calculating import duties.
Importers and economic experts have continued to express concerns about the implications of the unstable rates for calculating Customs duties on the economy.
CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf recently recommended that the Federal Government, through CBN, should fix the rate between N900 and N1,000 to a dollar, for a specified period, such as three months, six months or one year.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
