The Central Bank of Nigeria (CBN) has heightened importers’ woes by raising the exchange rate for paying import duty by a significant 14 percent, just 24 hours after slashing the foreign exchange rate for calculating import duty at the nation’s seaports.
According to data retrieved from the official trade portal of the Nigeria Customs Service (NCS), the CBN raised the Customs FX duty rate from N1,164.84/$ to N1,327.35/$ on Monday, April 29.
This adjustment marks a substantial 14 percent increase compared to the previous rate, resulting in an additional N162.51 per dollar required to clear goods at the port. Importers initiating Form M applications on this day are set to face higher import duties compared to those who did so over the weekend.
Last week’s market performance saw the naira endure its worst run since the January devaluation, plummeting by 7.8 percent to N1,339.23 on Friday from N1,234.49 at the week’s onset, as indicated by data from FMDQ Securities Exchange.
However, there was a glimmer of hope as the naira appreciated to N1,280/$ on Saturday, marking an 8.57 percent increase from N1,400/$ on Friday, as reported by multiple traders to BusinessDay.
In response to this development, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stressed the urgency for Nigeria to diversify its revenue sources, as overreliance on revenue generation could impede growth, job creation, and overall development. He advocated for fiscal authorities to stabilize rates to provide policy support to critical sectors of the economy and ease the burden on investors.
Eugene Nweke, a freight forwarder, echoed similar sentiments, calling for a fixed exchange rate regime for cargo clearing at the port to alleviate the strain on businesses, boost trading activities, and stabilize product market values. He pointed out that the exorbitant import and clearing costs at the port are exacerbating Nigeria’s inflation rate.
As importers grapple with the unexpected increase in import duty exchange rates, the CBN’s decision has once again underscored the delicate balance between regulatory measures and the needs of businesses in Nigeria’s import sector.
Credit: Businessday NG (Text Excluding Headline)
