CBN Readjust Exchange Rate For Cargo Clearance as Naira Gains in Official Market

• The Central Bank of Nigeria has readjusted the foreign exchange rate for cargo clearance in Nigerian ports
• The CBN fixed the exchange rate, the third in a week, for N1,605.82 from N1,537.07, an increase of N65.75
• Peter Obi has criticised the Nigerian government for the continued readjustment in the customs FX rate

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The Central Bank of Nigeria (CBN) has increased the exchange rate for customs clearance at Nigeria ports from N1,537.07 to N1,605.82 per dollar, an increase of N68.75, showing an adjustment to market conditions.

The recent adjustment is the third time in a week that the apex bank will adjust the exchange rate due to the naira's volatility, as shown by the federal government's trade portal, ensuring accurate valuation amid market dynamics.

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New adjustment to lead to high prices

According to the Comptroller-General of the Nigeria Customs, the service does not fix the rates for cargo clearance but the CBN.

The increase in the FX rate for cargo clearance shows that Nigerians will incur higher costs for goods clearance.

Analysts have said the move will lead to higher prices of goods for consumers.

Nigeria is facing the highest cost of living ever following the free fall of the naira, scarcity of Forex for imports and high inflation.

The National Bureau of Statistics has said the country's headline inflation for January is about 29.90%.

The African Development Bank (AfDB) has warned that increased fuel prices and commodities could lead to social unrest in Nigeria, Kenya and other African countries.

Naira falls in the black market

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The Nigerian currency plummeted to a record low in the parallel market to about N1,900 on Wednesday, February 21, 2023, representing a 7.10% decline from the N1,700 it exchanged for the previous day. Naira's continued depreciation dents the reforms by the CBN.

In the official Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira traded for N1,542.58, compared to the rate it changed the day before.

The naira hit an intraday high of N1,700 and a low of N1,050 per dollar at NAFEM.

Peter Obi, the presidential candidate of the Labour Party in the 2023 elections, has asked the Nigerian government to end the inconsistency in the customs duty rate, stating that the adjustments severely affect businesses in the country.

Obi criticises FG over constant changes in the FX rate

Obi said the arbitrary charges would lead to further business closures and job losses.

He said:

"A situation where at the point of initiating importation, Form M and other documents related to importation are based on a particular rate of exchange, for example, N1000 to $1, being the prevailing exchange rate at the time which the importer of goods was used to calculate the entire process, from the import initiation to receipt of goods in his warehouse," he said.

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"Then suddenly, when the goods arrive in Nigeria, and duties are calculated at different rates, say N1400 to $1, it becomes a serious business challenge that results in business losses. Worse still, it directly fuels the inflationary spike which is the basis of increasing cost of goods and living."

Obi called on the government to show consistency in its policies, stating that it would help with economic forecasting and business planning.

According to him, businesses and manufacturers are closing shops because of the Nigerian government's poor and inconsistent economic policies, TheCable report said.

FG moves against Forex speculators

Legit.ng reported that on Tuesday, February 20, 2023, the Nigerian government declared war on currency speculation to curtail the foreign exchange crisis in Nigeria.

The government issued the order to the Office of the National Security Adviser (ONSA) and the Central Bank of Nigeria (CBN) to join forces to address the challenges to Nigeria's economy caused by speculative Forex activities.

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FG moves against Forex speculators, black market operators as naira Hits N1,900 per dollar

Also, the Nigerian government deployed the Nigeria Police, the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service (NCS), and the Nigerian Financial Intelligence Unit (NFIU) to tackle the challenges.

Source: Legit.ng