Forex Crisis Costs Nigeria Over $500m Annually, Importers Warn

The ongoing forex crisis in Nigeria has resulted in financial losses and operational challenges for importers.

According to Dr. Basil Nwaolisa, the National Coordinator of Customs, Shipping, and Terminal Operations of the Importers Association of Nigeria, the country is losing over $500 million annually due to inconsistent exchange rates and other related issues.

Soaring Costs at Ports

The cost of clearing consignments at Nigerian ports has skyrocketed by 300% in just one year. Dr. Nwaolisa highlighted this alarming increase, stating; “A year ago, you could clear cargo for N5 million, but now the same consignment costs N20 million or more. This is a big problem.”

He further explained the burden on importers, noting, “If an importer’s worth is about N15 million, can they import a container now?

Demurrage charges are also a significant issue. Demurrage is now N60,000 per container per month, which adds up quickly.”

Forex Challenges and Inflation

Importers face severe difficulties due to fluctuating exchange rates. “If you want to import goods from the USA, China, or Korea, you must deposit money upfront. Sometimes, we exchange money at N390/$, but by the time the goods arrive, we pay duties at N1500/$,” Dr. Nwaolisa explained. This disparity not only creates inflation but also adds stress to importers.

Unsellable Consignments and Economic Impact

Many importers have goods stuck in warehouses that they cannot sell at a profit, Nwaolisa lamented, “Some importers can’t sell their consignments because they won’t recover their capital, making them poorer.” He warned that 60% of their members have stopped importing, leading to potential severe inflation.

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“In the next four to five months, there will be serious inflation. With money in your pocket, you won’t even find anything to buy.”

Government Policies And Stakeholder Consultation

Dr. Nwaolisa urged the government to consult stakeholders before implementing new policies. “There is no place in the world where policies are implemented without giving people time to adjust.

For example, if you want to change the exchange rate from N400/$ to N1,000/$, you must give people time to round off their current engagements.”

Significant Drop In Importation

The forex crisis has led to an 80% drop in importation, Dr. Nwaolisa emphasised, “These crises have caused more than an 80% drop in importations.

The Nigerian economy is heavily reliant on imports for most of its goods.”

Supporting Testimonies

Mr. Kayode Farinto, former Vice President of the Association of Nigerian Licensed Customs Agents, supported the importers’ claims.

He said, “The forex challenge has taken a serious toll on importers. I may not be able to quantify their losses, but I know they are substantial. Whoever provided those figures did a thorough job.”

The forex crisis in Nigeria is causing significant financial losses and operational challenges for importers, leading to inflation and economic strain.

Stakeholders urge the government to consult them before implementing new policies to mitigate these impacts.