The exchange rate utilized for cargo clearance and goods entry points by the Nigeria Customs Services (NCS) has experienced a notable decline, dropping from N1330/$ to N1260.49/$ in the past few days. This shift, marking a decrease of approximately N70 for cargo clearance, reflects ongoing fluctuations in Nigeria’s foreign exchange landscape.
The revised exchange rate closely mirrors the closing rate observed on the official Nigerian Autonomous Foreign Exchange Market (NAFEM) window, where the naira concluded trading at N1255/$ yesterday. Over the preceding two weeks, the exchange rate employed for import duty payments on the customs portal has demonstrated a consistent downward trend, indicating the strengthening of the naira in the foreign exchange (FX) market. Previously reaching a peak of N1,624.7/$1, the rate has steadily declined to its current level.
Acknowledging the frequent adjustments in exchange rates by the Central Bank of Nigeria (CBN) to align with prevailing market rates, the Customs Service clarified that the exchange rate applicable on the initiation date of the ‘Form M’ serves as the benchmark for assessing import duties.
The Nigerian Customs boss previously raised concerns regarding the impact of frequent exchange rate fluctuations on duty collection and cargo clearance, highlighting the existence of approximately 28 different exchange rates for cargo clearance in the first quarter alone. In response, the CBN has implemented a series of reforms aimed at stabilizing the forex market, reducing speculative activities, eliminating pricing irregularities, and bolstering the naira’s strength.
These reforms include measures to align official and parallel market exchange rates, restrict International Oil Companies (IOCs) from immediately repatriating only half of their foreign exchange earnings, with the remainder remittable after a 90-day period. Additionally, commercial banks are now prohibited from utilizing profits from foreign exchange sales for operational expenses and dividend disbursements.
Furthermore, the central bank has initiated dollar sales to Bureau de Change operators at a fixed price of N1,251 per dollar, signaling its commitment to ensuring stability in the forex market and supporting economic growth. As Nigeria’s forex market continues to undergo transformations, stakeholders closely monitor developments to navigate evolving dynamics and opportunities.
Credit: Nairametrics (Text Excluding Headline)
