N1000/$1: Expert Speaks on New Custom Duty Exchange Rate for Nigerians to Clear Goods
- The Centre for the Promotion of Private Enterprise want the apex bank to peg the custom duty exchange rate at N1000/$
- The enterprise's CEO said having a stable exchange rate for Customs duty will address more significant issues in the industry
- He noted that the consequence of escalating trade costs is the instances of abandoned cargo on the increase
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The Centre for the Promotion of Private Enterprise (CPPE) has called on the Central Bank of Nigeria (CBN) to peg the Customs duty rate at N1000/$ to ease the current hardships in the country.
Source: UGC
Chief executive officer of CPPE, Dr Muda Yusuf, made the call in a document available to Daily Sun on Sunday, February 25, 2024.
He stated that having a stable exchange rate for Customs duty will address more significant issues.
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This came after the CBN issued a guideline urging the Nigeria Customs Service to apply the closing foreign exchange rate in the official window for import duty calculations in response to concerns regarding uneven import duty assessment levies.
CPPE supports new CBN directive
In response to investors' concerns about the economy, Yusuf said that CPPE applauds the CBN's decision to approve using the exchange rate shown on the import documentation (Form M) at the beginning of the import transaction.
The existing ambiguity around imports and related economic transactions, he claimed, would be lessened by the breakthrough.
However, he added that the CBN intervention did not address the more significant and more concerning issue of the current expensive cost of cargo clearance at the ports—which has increased by more than 40% in the last two months.
He said:
“The high exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis and putting thousands of maritime sector jobs at risk.
“There is also the added risk of cargo diversion to neighbouring countries and heightened smuggling, which could jeopardize the realisation of customs revenue target."
In keeping with the federal government's pledge to lessen the current sufferings experienced by residents and businesses, the CPPE fervently requested that the CBN set the customs duty exchange rate at N1000/$ for the remainder of the year.
He added that instances of abandoned goods are rising due to increasing trade costs and that the present customs tax exchange rate is still too expensive in light of the current galloping inflation and challenges affecting businesses and the populace.
He made these undesirable results for an economy that aims to provide social stability, stimulate growth, assure recovery, and promote inclusiveness.
He added:
“Pegging the Customs duty exchange rate resonates with the present intervention measures to mitigate the current hardships in the country. Besides, this proposition does not in any way detract from the economic reform agenda of the present administration.
“If anything, it would complement the economic transformation measures because of the expected positive impact on competitiveness, productivity, cost reduction, deceleration of inflation and employment generation.”
CBN raises Customs duty rate to clear goods
Legit.ng reported that the CBN has adjusted the Nigeria Customs import duty exchange rate again.
The latest federal government trade portal data shows that the Customs exchange rate for clearing goods is now N1,537.073 to the dollar.
This represents a 2.9% increase from the previous rate of N1,493.23 as of Saturday, February 17, 2024.
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Source: Legit.ng
