Again, CBN Raises Import Duty Forex Rate, 4th Time In 10 Days

The Central Bank of Nigeria (CBN) has raised the exchange rate for computing Customs duties at the nation’s seaports again, making it the fourth increase in 10 days.
Information obtained from the official trade portal of the Nigeria Customs Service shows that the exchange rate was reviewed upward yesterday, February 12, from 1,417.635/$ to N1,444.56/$.
This is as the Sea Empowerment Research Centre (SERC) called on the minister of finance and coordinating minister of the economy, Wale Edun, to direct the CBN to stop the incessant increment of exchange rate for customs duty assessment.

The latest increase represents a 1.9 per cent increase in the Customs duty rate and it is the fourth time the apex bank is adjusting the rate this new year.
By implication, this will see importers and manufacturers that depend on the nation’s seaport for the importation of critical production inputs pay more to clear their goods as import duties are benchmarked against the dollar.
LEADERSHIP reports that for the fourth time in 10 days, the CBN adjusted the exchange rate for Customs clearance of cargoes at the nation’s seaports to N1,444.56/$1, on Monday.
This year, the CBN has adjusted the import duty exchange rate four times in quick succession.
The exchange rate was moved from N951.941/$1 to N1, 356.883/$1 on February 2, 2024, and was again reviewed upward on February 3 to N1, 413.62/$. Last Saturday, the rate was changed again to N1,417.635/$ before it was raised on Monday to N1,444.56/$1.
Earlier in June 24, 2023, the CBN adjusted the exchange rate from N422.30/$ 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.
However, in a statement made available to LEADERSHIP by the centre head of research, Eugene Nweke, dishing out fiscal and monetary policies without recourse to statutory feedback mechanism falls short of the renewed hope mantra of President Bola Tinubu.

Nweke further disclosed that the government should investigate the numbers of businesses that have closed shop, how many are downsizing weekly, monthly and quarterly and the population of out of job Nigerians.
“How stable is the labour market under the prevailing circumstances; how has the inflation rate affected the purchasing power of the citizenry; the contributory effect of this policy/increments to the ailing economic hardship and poverty in the land; its contributory effect to the insecurity in the land,” Nweke, former president of National Association of Government Approved Freight Forwarders (NAGAFF), stated.

On his part, a frontline clearing agent, Chukwuma Onyeka, said the CBN wanted the exchange rate for Customs clearance to be at par with the Nigerian Autonomous Foreign Exchange Market (NAFEM) because of revenue that the Nigeria Customs Service (NCS) would generate.
According to him, they are more concerned about revenue than inflation and its attendant consequences.
Onyeka stated further that since Nigeria is an import-dependent country, any slight increase in Customs exchange rate for cargo clearance would lead to increase in price and Nigerians will suffer for it.
“What we are experiencing now was as a result of an increase in Customs exchange rate for cargo clearance. The more the government adjusts the exchange rate, the more we record inflation and other price increases. The country is import dependent so any spike in the port charges will lead to a crisis in the economy,” he stated.
On the way forward, he asked the government to bring the exchange rate down, even as he cautioned against seeking to raise revenue at the expense of the masses.

“Government can defend the exchange rate for Customs clearance or they can bring it down. If they do that, inflation will go down but if they keep taking it up, they will continue seeing inflation soaring,” he stated
The chief executive officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the upward adjustment will further worsen the challenges of importers by increasing the cost of import and reduction in trade.
“We have enough problems with the exchange rate. Now we are having additional burden of import duty hike because it is like increasing import duty across board, maybe by another 15 per cent or more; that is what it is,” Yusuf, a former director general, Lagos Chamber of Commerce and Industry (LCCI), said

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According to him, the new duty exchange rate will fuel inflation and cut profit margin, among others. According to him, the increase in import duty is not an appropriate thing for the government to do now.
Reacting, former chairman of the Association of Nigeria Licensed Customs Agents (ANLCA), Bisiriyu Lasisi Fanu, said the hike in Customs duty through high FX rates will affect all goods in the market because every commodity in the market has imported input in them.
Fanu said the frequency at which the CBN is adjusting the exchange rate has become worrisome, which is why there is so much overtime cargo at the port.

“CBN can’t change the rate and expect the importer who has made his calculation on what the landing cost and profit will be based on the previous exchange rate to survive. How do you expect the importer to generate the difference immediately to clear the goods from the port? It is not possible,” Fanu said.