Peter Obi Kicks As CBN Increases Customs Exchange Rate By 9%

Less than five days after the Central Bank of Nigeria (CBN) reduced exchange rate for Customs cargo clearance from N1,515.48 to N1,472.756, the apex regulatory bank, on Wednesday, increased the rate to N1,605.82 per dollar representing nine per cent increment.

But, the presidential candidate of the Labour Party (LP) in the 2023 general election, Peter Obi, has called on the federal government to halt the inconsistency in duty charges, saying it was affecting the general business climate in the country.

LEADERSHIP gathered that the new rate, which had already been reflected on the Nigeria Customs Service (NCS) portal, has further dampened the hope of importers.

LEADERSHIP reports that earlier on June 24, 2023, the CBN adjusted the exchange rate from N422.30/$ to N589/$, and on July 6, 2023, it was adjusted to N770.88/$, on November 14, 2023, it was adjusted to N783.174/$, in December, 2023 it was adjusted to N951.941/$.

Also, on February 2, 2024, it was moved to N1,356.883/$ and on February 3, it was raised to N1,413.62/$, on Saturday, February 10, it was changed to N1,417.635/$, on Monday February 11, it was moved to N1,444.56/$1 and on Wednesday, February 14, the CBN adjusted the exchange rate to N1481.482/$1 and on Thursday, February 15, it was moved to N1,515.092/$1.

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While on Friday, February 16, 2024, the CBN reduced the rate to N1,472.756 per dollar, and on Wednesday, February, 21, 2024, it has increased it to N1,605.82/$1.

Our Correspondent also reports that the incessant increases have impacted negatively on the trade volume at the Nigerian ports as some importers have abandoned their goods at the ports while others have opted for ports in the neighboring countries.

However, reacting to the development, Obi, a businessman cum politician, said in a statement on his verified X handle (formerly Twitter) @PeterObi, that high Customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living, were detrimental to the nation’s economy.

According to the former governor of Anambra State, the federal government should stop the arbitrary and ever-increasing Customs duties as it was now negatively impacting businesses and the cost of items in the local market.

Obi wrote: “I wish to urgently call on the Federal Government of Nigeria to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country. The federal government should stop the arbitrary and ever-increasing Customs duties as it is now negatively impacting businesses and the cost of items, and this portends a huge danger to the economy.

“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.

“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. Such arbitrary charges will obviously lead to further closure of businesses, and attendant job losses. This is because at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate, and the prevailing market prices.

“If this situation is not corrected, our importers may resort to using ports of nearby countries, a situation that will leave our ports under-productive, and further deepen our economy into a worse situation as a result of loss of revenue.”

He further disclosed that businesses were dying while manufacturers were shutting down because of the poor and inconsistent economic policies of the government.

“The government should also show consistency in its policies as this will help with economic forecasting and business planning. Businesses are dying and manufacturers are shutting down because of the poor and inconsistent economic policies of the government.

“All efforts of the government should be directed at supporting businesses, especially those in the manufacturing sector, to keep their businesses afloat and keep the economy growing, as the small business sector remains the most critical engine of economic growth.

“We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living,” he added.