Forex: Imported Containers Drop as CBN Adjusts Dollar Rate to Clear Goods at Port

• In the first quarter of 2024, there was a 2.39% decrease in the quantity of containers going through twenty-foot equipment units
• Licensed customs officers blame the drop in cargo throughout in the first quarter of 2024 for the nation's currency issue
• The overall throughput of containers in Q1 2024 was 396,083, a decrease from 405,811 in the corresponding period of the previous year

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The number of containers passing through twenty-foot equipment units fell by 2.39% during the first quarter of 2024, a document from the Nigerian Ports Authority has shown.

Licensed customs agents attribute the country's currency problem to the decline in container throughput during the first quarter of 2024.

The total container throughput for Q1 2024 was 396,083, down from 405,811 during the same period the previous year, according to the NPA.

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The NPA also said that, in the first quarter of 2023, there were 150,926 export containers, while there were 254,884 laden containers arrived in the nation.

During the first quarter of 2024, 112,801 empty containers were registered, while 283,281 loaded containers were handled.

Despite the decline in container throughput, cargo throughput during the reviewed period exceeded that of the corresponding time in 2023.

“In 2024, we recorded 20,105,390 as cargo throughput, while in 2023, we recorded 17,476,212,” the NPA reported.

Importers react

In response, the Importers Association of Nigeria stated that the country was losing more than $500 million a year as a result of fluctuating exchange rates and pointed finger at the forex problem for the decline in container throughput.

In an interview with The PUNCH recently, Dr. Basil Nwaolisa, the association's National Coordinator of Customs, Shipping, and Terminal Operations, bemoaned the fact that the cost of clearing consignments at the port had risen by 300 percent in just a single year.

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“The country is losing more than $500m annually. A year ago, clearing a cargo might cost N5m, but now the same consignment costs N20m or more. This is a big problem. If an importer’s worth is about N15m, can they import a container now? Demurrage is a significant issue at N60,000 per container per month,” Nwaolisa said.

He underlined that 60% of their members had stopped importing because of the currency problems, which posed a significant hardship to importers.

Lucky Amiwero, National President of the National Council of Managing Directors of Licensed Customs Agents, also observed that because importation had dropped, markets were almost deserted.

He said:

“The forex issue has affected buyers. When you go to the market now, you will find many items that are no longer available. Importers have stopped importing due to the fluctuating naira.

“Many people do not have the funds to purchase foreign exchange because the price is high and the market is unstable. Most potential importers are waiting to see if the situation improves.

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“Previously, $500,000 could secure several containers, but that amount no longer holds the same value. Many people have left the industry for menial jobs due to the inconsistent exchange rate.”

CBN retains customs FX rate for cargo clearance

Legit.ng reported that for the past three weeks, the Central Bank of Nigeria maintained the same exchange rate for import duties, despite the official FX rate being close to N1,485 per dollar.

Before collapsing on Monday, June 24, 2024, the FX rate had remained stable at N1,474 per dollar for the previous three weeks—the longest it had been since January 2024.

Following the most recent collapse of the value of the Nigerian Naira relative to the US dollar, importers would anticipate a change.

Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng