IMPORTERS WILL FACE HIGHER COSTS DUE TO CBN’S ADJUSTMENT OF THE FOREIGN EXCHANGE RATE TO N1,413.62/$1.
Importers had not yet embraced the foreign exchange (FX) rate of N1,356.883 imposed by the Central Bank of Nigeria (CBN) on the market last Friday. Surprisingly, the apex bank swiftly readjusted the exchange rate on the Customs platform to N1,413.62/$1.
This revision of the exchange rate occurred within a mere 24 hours after the CBN elevated the rate from N951.941/$1 in December to N1,356.883/$1 on Friday, February 2nd, 2023.
Recalling previous adjustments, the CBN altered the exchange (FX) rate from N422.30/$1 to N589/$1 on June 24, 2023, and then to N770.88/$1 on July 6, 2023. Subsequent adjustments followed on November 14, 2023 (N783.174/$1), December 7, 2023 (N951.941/$1), and most recently on February 2, 2024 (N1,356.883/$1), with the current rate standing at N1,413.62/$1.
However, maritime experts highlighted that the heightened exchange rate will result in increased expenses for Nigerian importers during customs clearance, as import duty is pegged against the dollar.
Following this recent surge, the import duty on goods has tripled in the span of seven months under the Bola Ahmed Tinubu government. The updated rate is now reflected on the Customs trade portal, provoking strong opposition from importers and Customs brokers when the apex bank initially raised the Customs import duty rate by 43 percent on Friday.
Dr. Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprise (CPPE) and former director-general of the Lagos Chamber of Commerce and Industry (LCCI), expressed concern, stating that, “the exchange rate increase will exacerbate importers’ challenges and lead to reduced trade due to soaring import costs.”
President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Amiwero, emphasized that “the government is responsible for the situation, as the rise in the exchange rate hampers foreign exchange accessibility for imports, potentially resulting in a crisis.”
Ikemefuna Chukwu, a prominent clearing agent, voiced his dissatisfaction, noting, “the successive increases in the Dollar exchange rate imposed by the federal government, describing the current situation as excessive and detrimental.”
News Source: Techeconomy
