CBN Raises Import Duty Rate To N1,618.73/$

The Central Bank of Nigeria (CBN), has increased the exchange rate for the  clearance of cargo at the nation’s seaports and airports from N1,600.32 to N1,618.732.

This change is the highest rate since March 2024 and comes amid a 6.43 per cent depreciation of the naira in July. The increase is expected to further strain importers, as it raises the cost of imports and contributes to inflation. The CBN’s interventions to stabilise the naira have included multiple foreign exchange sales, but challenges persist in the market.

According to the Nigeria trade hub, the federal government official single window for trade, the exchange rate increased by N18 from the previous rate of N1600.32 to the USD.

It was, however, gathered that the depreciation happened despite the CBN’s attempts to address the official market’s liquidity issues through dollar sales.

In July, the CBN conducted at least three foreign exchange (FX) sales to authorised dealers and one sale to Bureau de Change (BDC) operators as the naira faced significant pressure.

Speaking on the increase in exchange rate, a clearing agent, Oladimeji Majekodunmi, said that the cost of clearing containers at the ports will increase tremendously.

“The moment CBN increases, Customs don’t have a choice than to adjust the new duty in their system. Now to clear a 40ft container of food items, it costs nothing less than N20 million and above. This was far below the amount we used to clear the same consignment before. You know how many times CBN has increased the rate in the last few months.

“The cargo throughput into the country has dropped significantly to about 30 per cent. Come to the port now, you will see how empty and dry the whole place is.

Some agents don’t even have money to come to the port talk alone to feed their family. Importers have gone bankrupt and the whole situation is precarious,” he lamented.

He said that there is a need for the Central Bank to give importers a stable exchange rate, saying fluctuations of exchange rate is not good for the economy.

Meanwhile, the national President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, urged the federal government, through the CBN, to implement a special exchange rate for calculating import duties.

Amiwero emphasised that a stable and manageable exchange rate for import duties would stimulate economic growth and benefit the broader Nigerian population.

He, however, expressed significant concern over the current practice of using floating exchange rates for customs duty calculations. He argued that this approach has contributed substantially to the rising costs of goods and escalating food prices in Nigerian markets.

According to Amiwero, the use of a floating exchange rate introduces unpredictability into the process of clearing goods at ports, which complicates logistics and places a heavy financial burden on consumers.

“We wish to highlight to the federal government the severe challenges faced by Nigerians, particularly due to the soaring prices of goods driven by the floating exchange rate applied to import duty computations.

“This issue has drastically reduced importation, disrupted transportation, and made basic foodstuffs increasingly scarce, especially for those who struggle to make ends meet and have no financial safety net,” he added.

He further explained that the liberalised foreign exchange market’s fluctuating rates have led to inconsistent and unpredictable pricing, causing an abnormal surge in the final sale prices of goods.

To address these challenges, Amiwero called for measures to eliminate the uncertainties and inconsistencies associated with the current exchange rate system.

He stressed the importance of stabilising the domestic trading environment to provide a more predictable framework for importers.