Victor EzejaThe Centre for the Promotion of Private Enterprise (CPPE), has urged the Central Bank of Nigeria (CBN) to peg exchange rate for Customs duty assessment at ₦1,000/$ to alleviate the financial difficulties faced by importers at the nation’s ports.
Following concerns raised by importers about high rate of imort duties in recent times, the CBN in a statement on Friday, ordered the Nigeria Customs Service to, beginning from Monday 26 February 2024, approve the use of the exchange rate reflected on the import documentation [Form M] at the onset of import transaction.
This, the apex bank said, would reduce the uncertainties caused by irregular rate adjustments in recent times, and the implications on prices of things in the economy and the cost of doing business for importers.
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Chief Executive Officer of CPPE, Dr Muda Yusuf, in a statement on Sunday said the Centre welcomes the latest CBN directive on handling import duty rates by Nigeria Customs Service.
The Centre, however, pointed out that the apex bank failed to “address the bigger and the more troubling issue of the current prohibitive cost of cargo clearance at the ports which had risen by over 40% in the last two months.”
From December 2023 to February 2024, the exchange rate for import duties has been jerked up by over 60 per cent, as NCS keeps adjusting the rates as the official exchange rate goes up.
Yusuf, a former president of the Lagos Chamber of Commerce and Industry (LCCI), expressed concerns that the high exchange rate for import duty assessment is “fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis and putting thousands of maritime sector jobs at risk.”
He further observed that “there is also the added risk of cargo diversion to neighbouring countries and heightened smuggling which could jeopardize the realization of customs revenue target.
“In the light of this, the CPPE strongly appeals to the CBN to peg the customs duty exchange rate at N1000/$ for the rest of the year in line with the federal government’s commitment to ease the current hardships on the citizens and the burden on businesses. The current customs duty exchange rate of N1,488.9/$ is still too high in the context of the current galloping inflation and difficulties facing businesses and citizens. Instances of abandoned cargo is on the increase as a consequence of escalating trade costs.
“These are not good outcomes for an economy seeking to ensure recovery, drive growth, promote inclusion and guarantee social stability.
“Businesses are currently grappling with multiple macroeconomic and structural headwinds which are negatively impacting profitability, competitiveness, job creation, retention of existing jobs and business sustainability.”
CPPE maintained that pegging the customs duty exchange rate resonates with the present intervention measures of the Federal Government aimed at mitigating the current hardships in the country.
The Centre said the recommendation does not in any way detract from the economic reform agenda of the present administration, but would complement it because of the “expected positive impact on competitiveness, productivity, cost reduction, deceleration of inflation and employment generation.”
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.
