The exchange rate for customs duties collection in Nigeria has risen from N1467/$ to N1,480, inching closer to the official market rate of the NAFEM window, currently standing at N1,482.81 to the USD.
Despite recent fluctuations in the value of the naira, the current exchange rate for customs duties closely reflects the prevailing rate on the official window. Approximately two weeks ago, the naira surpassed the N1500/$ mark before gradually stabilizing at its current level.
Last week, Nigeria’s national currency exhibited signs of recovery, making slight gains against the US dollar. Starting the week at 1468.99/$1, it reached a weekly low of N1,485/$ before settling at N1,481/$ by Friday.
Forex trading activity during the week witnessed an average daily turnover ranging from $123 million to $261 million, indicating market participants’ response to economic uncertainties.
Furthermore, the Central Bank of Nigeria (CBN) conducted a Nigerian Treasury Bill (NTB) auction on May 22, 2024, offering a total of N508.98 billion. Despite oversubscription reaching N1.5 trillion, only about N638.98 billion was allotted to treasury bill investors, showcasing sustained interest in fixed-income securities amid economic volatility.
The increased interest in treasury bills can be attributed to the recent hike in the Monetary Policy Rate (MPR), making government securities more attractive to investors seeking yield.
Moreover, the CBN continued its upward adjustment of the MPR during the week, raising interest rates by 150 basis points from 24.75% to 26.25% – marking the third consecutive increase since February.
However, stakeholders in Nigeria’s business community have voiced concerns over the CBN’s policy measures aimed at combating inflation and stabilizing the exchange rate.
The Center for the Promotion of Public Enterprise (CPPE) and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) expressed dissatisfaction with the frequent adjustments to the customs exchange rate and interest rate hikes.
The CPPE recommended adopting a quarterly exchange rate for import duties calculations to mitigate inflationary pressures. Meanwhile, NACCIMA advocated for duties to be collected in the local currency, emphasizing the importance of preserving Nigeria’s economic sovereignty.
As economic uncertainties persist, stakeholders continue to monitor developments closely, underscoring the importance of policy stability and prudent management in navigating Nigeria’s economic landscape.
