Prices of goods to rise as Customs increases exchange rate for cargo clearance to N1356.8/$1

Nigerians may be forced to pay more for goods as the Nigerian Customs Service (NCS) has increased the exchange rate for the clearance of goods from N951.94/$ to N1356.88/$.

A review of the Federal Government’s single-window trade portal of the customs service revealed that the previous exchange rate of N951.94/$1 has been revised upwards.

This is expected to cause an increase in the prices of goods in the market as the Customs levies duties on imported cargoes before they are cleared from the ports.

These charges vary from 5% to 35% based on the harmonized commodity and coding system (HS code).

Since the Central Bank of Nigeria (CBN) unified the exchange rate market in June, Nigeria has been grappling with an exchange rate crisis.

Market forces have been allowed to dictate the value of the naira, resulting in a depreciation of over 100% in its value.

The Centre for the Promotion of Private Enterprise (CPPE) had expressed concern at the last increase in the Customs exchange rate from N783 to N952/$1, saying it would worsen the already prohibitive production and operating costs for businesses in the country.

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, in a chat with journalists, noted that the hike in the exchange rate would inflict more pain on the citizens, erode profit margins, reduce purchasing power, and put the survival of businesses at an elevated risk.

He said the frequent changes in rates are also creating serious uncertainty for investors and making the international trade process increasingly unpredictable.

READ ALSO: Customs Onne Command marks International Customs Day, nets N313bn revenue

Yusuf said: “This is not a good time for the CBN to increase the exchange rate for the computation of import duty and the clearing of cargo by importers.

“This review will impact the cost of all imports, including raw materials for manufacturers, pharmaceutical products, machinery, energy products, petroleum products, and many more.

“This will make a bad situation worse for investors in the economy. It will worsen the misery of the citizens amid an excruciating inflationary condition.

“The CPPE strongly appeals to the CBN and the Coordinating Minister of the Economy to review the increase.”

The CPPE chief warned that trade policy measures should not be subjected to the full vagaries of market forces.

He advised that the CBN should allow for a concessionary rate and computation of import duty to protect the economy and the citizens from inflationary pressures.

“We propose that going forward, CBN should fix the customs duty rate at 20% less than the official exchange rate in the light of the prevailing harsh economic conditions,” he added.

By: Babajide Okeowo

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now