Respite as CBN slashes Customs FX duty rate by 1.9%

The Central Bank of Nigeria (CBN) on Thursday morning slashed the exchange rate for computing Customs duties at the nation’s seaports by 1.9 percent.

The reduction in Customs FX duty rate is coming 24 hours after the apex bank raised the rate by 10.4 percent.

Information obtained from the official trade portal of the Nigeria Customs Service revealed that the Customs FX duty rate was reviewed downward from N1, 662.35/$ to N1630.159/$ on Thursday, February 29, 2024.

This represents a 1.9 percent reduction when compared to the old rate of N1, 662.35/$ used as of Wednesday, February 28, 2024, and a decrease of N32.191 on a dollar needed to clear goods from the port.

With the slash in rate, importers opening Form M today Thursday, February 29, 2024, for any import trade, will have small relief in terms of the money that would be used to pay import duties compared to the importer who opened Form M on Wednesday, February 28, 2024.

This 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, and with the adjustment, the importer will be opening Form M at a lesser exchange rate.

Despite the slash, industry analysts believed, that the apex bank needs to address the bigger and more troubling issue of the current prohibitive cost of clearing goods at the ports which had risen by over 40 percent in the last two months.

Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said the high exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis, and putting thousands of maritime sector jobs at risk.