• Tuesday, April 23, 2024
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Again, CBN raises Customs import duty rate by 4.5% despite criticism

No more foreign currency collateral for naira loans — CBN

Two days after the last review, the Central Bank of Nigeria (CBN), again raised the Customs duty rate for clearing imported items by 4.5 percent on Wednesday morning, February 21, 2024.

The Customs duty rate was reviewed upwards from N1, 537.073/$ to N1, 605.82/$, according to information obtained from the official trade portal of the Nigeria Customs Service.

This represents a 4.5 percent increase when compared to the old rate of N1, 537.073/$ and an additional N68.747 on a dollar, meaning that importers would need more money to pay duty today than they did previously.

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This is the highest rate the nation’s port industry has witnessed since the Central Bank introduced FX reforms in June 2023 to stabilise the foreign exchange rates.

Industry close watchers believed that this would not be the end as the official FX rate against the dollar, which is now the benchmark for Customs duty rate, has continued to fluctuate on an upward trend and it settled at N1,606.32/$ as of Wednesday, February 21, 2024, according to the Nigerian Foreign Exchange Market of the CBN.

Meanwhile, the frequent review of Customs exchange rates for computing import duties has continued to raise concerns among Nigeria’s business community with Peter Obi, the presidential candidate of the Labour Party in the 2023 general elections, calling for caution.

Obi called on the Federal Government to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country.

He said the arbitrary and ever-increasing Customs duties are now negatively impacting businesses and the cost of items, and it portends a huge danger to the economy.

“Calculating import duty using a rate that is different from the rate in Form M will cause a serious business challenge that results in losses. Worse still, it directly fuels the inflationary spike which is the basis of the increasing cost of goods and living.

“Such arbitrary charges will lead to further closure of businesses, and attendant job losses. This is because at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate,” he said.

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Obi warned that Nigeria cannot afford to target high Customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living.