• Tuesday, June 18, 2024
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BusinessDay

Customs FX duty rate drops by a 5.2% on strong naira

Why we should protect the independence of the Central Bank

As the naira continues to remain stable against the dollar, the Central Bank of Nigeria (CBN) has slashed the exchange rate for computing Customs duties at the nation’s seaports by 5.2 percent.

The slash by the apex bank, which reflects the strength of the naira in the foreign exchange market, saw the FX rate for Customs duty payment decline from N1,330.26/$ to N1,260.49/$ on Friday, April 5, according to information obtained from the official trade portal of the Nigeria Customs Service.

This equals about a 5.2 percent reduction in rate when compared to the old rate of N1,330.26/$ used for the opening of Form M as of Thursday, April 4, and a decrease of N69.77 on a dollar needed to clear goods from the port.

The reduction in exchange rate for Customs duty payment was highly anticipated as the naira continued to rally against the United States dollar (USD) to trade at N1,255.07/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, April 4, setting the stage for easing the cost of imports.

What this means is that importers opening Form M today Friday, April 5 for importation will have some measures of relief in terms of the money required to pay import duties compared to the importer who opened Form M on Thursday, April 4.

It is in line with the apex bank’s new directive that Customs should be using the rate on the date of submitting Form M for calculating import duties.

BusinessDay reports that the appreciation of the naira was attributed to several FX policies implemented by the Central Bank to boost dollar supply and enhance transparency in the FX market.

Dollar supply by willing buyers and willing sellers, including commercial banks rose by 49.47 percent to $166.18 million on Wednesday, April 3 from $111.18 million on Tuesday, April 2.

Adewale Adeniyi, comptroller-general of Customs said during Customs first quarter briefing that the exchange rate used by Customs in the clearance of goods via the Nigeria Integrated Customs Information System is based on the rate determined by the CBN.

In the last quarter of 2024, he said, a total of 28 rates were directed by the CBN, ranging from N951.94 per USD in January 2024 to a peak of N1,662.35 per USD in February 2024.