The Nigeria Customs Service (NCS) has provided clarity on its procedures, emphasizing that the prevailing exchange rate set by the Central Bank of Nigeria (CBN) dictates its rates rather than market fluctuations. This assertion came from Abdullahi Maiwada, the NCS spokesperson, in an interview with the News Agency of Nigeria (NAN) in Abuja.
Maiwada highlighted that importers operate in dollars and must obtain “Form M” from the CBN for their transactions. His comments followed a suggestion by the Nigeria Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) to shift customs duty charges to Naira, prompted by a recent CBN circular halting the use of foreign currency collateral for Naira loans.
Explaining the process, Maiwada clarified that the NCS calculates duty on imported items using the prevailing exchange rate, converting their value to Naira equivalents to ensure accurate assessment and maintain requisite foreign exchange earnings for the country.
He further elaborated that customs value is determined based on the Cost, Insurance, and Freight (CIF) of imported items, with algorithms considering various factors such as item value, origin, trade agreements, tariffs, exemptions, and preferences.
Maiwada underscored the importance of trade predictability for efficient processes, noting that unpredictable transactions hinder trade facilitation.
Meanwhile, Comptroller-General Adewale Adeniyi revealed that the CBN approved 28 different exchange rates for import duty calculation in the first quarter of 2024, resulting in an average applied exchange rate of N1,314 to the dollar for customs clearance within the period.
The NCS’s clarification sheds light on the intricacies of import duty collection and underscores the role of regulatory frameworks in navigating exchange rate dynamics in Nigeria’s trade landscape.
Credit: News Agency of Nigeria (NAN) Text Excluding Headline
