CBN Announces New Customs Exchange Rate to Clear Goods at Ports As Naira Crashes
- Nigerian importers will pay more to clear their goods after the CBN adjusted the customs duty rate again
- The latest decision follows the depreciation of the naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX)
- The naira has been under intense pressure following Donald Trump's tariffs and crude oil price crashes
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria (CBN) has increased the customs duty rate, effectively making the cost of importing goods more expensive.
According to data from Nigeria's trade portal, on Friday, April 11, the CBN raised the exchange rate for clearing goods to N1,591.35 per dollar.
Source: Getty Images
The latest rate represents a 1.58% increase compared to the N1,566.52/$ exchange rate quoted as of Monday, April 7.
Customs exchange rate changes
The Nigeria Customs Service (NCS) exchange rate for import duties collection has risen due to the performance of the naira.
The Naira depreciated 1.05%, or N16.97, against the US Dollar at the Nigerian Foreign Exchange Market (NAFEM) on Thursday, April 10.
It exchanged at N1,629.94/$1, compared with the previous day’s rate of N1,612.99/$1.
In the same official market, CBN, however, the Nigerian currency traded flat against the Pound Sterling and the euro during the session at N2,085.01/£1 and N1,805.64/€1, respectively.
As for the black market, the domestic currency depreciated against the greenback yesterday by N5 to sell for N1,620/$1, in contrast to the N1,615/$1 it was exchanged at midweek.
Source: Getty Images
Legit.ng reported that the naira had stabilised on Wednesday in the spot market after President Donald Trump of the United States announced a 90-day pause on tariffs for more than 75 nations, including Nigeria, that did not retaliate against his sweeping duties announced a week ago.
However, China, which recently imposed steep retaliatory tariffs on US goods, did not receive any relief, as Mr. Trump increased the total levy on Chinese goods to 125%.
Although the dollar depreciated globally against major currencies, the naira failed to take advantage as it battles sustained pressure from a drop in crude oil prices and increased demand from importers.
Naira exchange rates against other currencies
- CFA – N2.74
- Yuan/Renminbi – N217.61
- Danish Krona – N237.16
- Euro – N1,770.14
- Yen – N10.97
- Riyal – N424.04
- South African Rand – N82.01
- Swiss Franc – N1,897.77
- Pounds Sterling – N2,056.0
Expert warns CBN against further exchange rate hike
Speaking with Legit.ng, Dr Ifeanyi Ubah, head of investment research at Comercio Partners, said that the hiked exchange rate for import duties has significant implications for both importers and the broader Nigerian economy.
He said:
"For importers, this change will lead to higher costs for clearing goods at the ports, as import duties are now calculated based on a higher exchange rate. As a result, businesses that rely heavily on imported goods, such as manufacturers, retailers, and wholesalers, will face increased operational costs. These higher costs are likely to be passed on to consumers, leading to inflationary pressure on prices of imported goods, which could further contribute to the already rising cost of living.
"For the Nigerian economy, this policy move could have a dual effect. On the one hand, it may boost government revenue from import duties, which is crucial for financing the country’s budget deficit. On the other hand, the increased cost of imports could exacerbate the inflationary spiral, negatively affecting consumer purchasing power and overall economic stability.
"Additionally, it could discourage businesses from importing certain goods, potentially leading to shortages or limited availability of key products."
He added that in the long run, if not managed carefully, this could harm economic growth by stifling trade and investment.
US protests import bans on 25 products from Nigeria
Earlier, Legit.ng reported that the US government had criticised the Nigerian government's continued ban on the importation of 25 products.
Nigeria was listed among 10 countries with "unfair trade practices," citing various bans on US exports.
Restrictions by India, China, the EU, and others are said to cost US businesses billions in lost revenue.
This article has been updated by head of business desk, Victor Enengedi, with exclusive comment by an expert.
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Source: Legit.ng
