• Thursday, May 30, 2024
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CBN raises Customs FX duty rate for cargo clearance by 14%

Rate Hike or Hype? A ‘NeverEnding’ Story

Barely 24 hours after slashing the foreign exchange rate for calculating import duty at the nation’s seaports, the Central Bank of Nigeria (CBN), has again dashed importers’ hope by raising the exchange rate for paying import duty by 14 percent.

Information obtained from the official trade portal of the Nigeria Customs Service (NCS) shows that the apex bank raised the Customs FX duty rate from N1,164.84/$ to N1,327.35/$ on Monday, April 29.

Read also: CBN steps in to correct FX market distortion

This represents a 14 percent increase in rate compared to the old rate of N1,164.84/$ previously used for the opening Form M and an increase of N162.51 on a dollar needed to clear goods at the port.

This means that importers opening Form M today will require more money to pay import duties than those who opened Form M at the weekend.

BusinessDay reports that last week, the naira had its worst run since the devaluation in January, falling 7.8 percent to N1,339.23 on Friday from N1,234.49 at the beginning of the week, according to data by FMDQ Securities Exchange.

The naira appreciated to N1,280/$ Saturday, an 8.57 percent gain compared to N1,400/$ Friday, according to multiple traders who spoke with BusinessDay.

In his reaction, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, told BusinessDay that Nigeria needs to deemphasise revenue generation because too much emphasis on revenue causes growth, job creation, and development to suffer.

He said fiscal authorities need to stabilise rates to give policy support to critical sectors of the economy and also give breathing space to investors without burdening them with too much taxation.

Read also: Ways and Means: CBN lends fresh N3.8 trillion to FG in six months

Eugene Nweke, a freight forwarder, called for a fixed exchange rate regime for cargo clearing at the port to give relief to businesses, support trading activities, and stabilise the market value of products.

According to him, the port’s high import and clearing cost is exacerbating Nigeria’s inflation rate.