Cost to rise, volume to drop over N35 raise on exchange rate for cargo clearing

The recent increase in the exchange rate for payment of Customs duty by N35 from N326/$ to N361/$ would lead to increase in the general cost of doing business and decline in volume of cargo imported into the country, shippers have said.

To them, increasing exchange rate for cargo clearing twice in six months does not only violate economic decency but shows that government has started to panic due to looming global economic downturn caused by the outbreak of Coronavirus (COVID-19) pandemic.

“The increase will induce shortage of cargo at ports as time goes on, which has started showing. Industries, importers, shippers and exporters would have to source for additional funds to clear their cargo trapped in the ports due to the Coronavirus pandemic that resulted to over one-month stay-at-home order of the Federal Government,” said Jonathan Nicol, president of Shippers Association of Lagos State (SALS).

Nicol noted that clearing all the goods in the port would now attract the new exchange rate.

“The new rate should not reflect on all the Form M already approved by the central bank because it is the approved rate on the Form M that was used to procure foreign exchange for each shipment. This means that the development would affect fund transfers to suppliers when the excess fund being raised through Customs have no bearing on economic development,” he said.

He said that the increment would induce reduction of staff across board in different sectors of economy owing to the fact that the development would increase running cost for industries, which would subsequently eat into their bottom-line.

“All the goods now in the port should be exempted in this current exchange rate increase. This includes goods that are on the high seas with approved Form M that was based on the old exchange rate. We should avoid a major industrial unrest in Nigerian economy,” he warned.