• Friday, April 12, 2024
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Shippers say fluctuating customs FX rates, inconsistent policies fuel inflation

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Shippers under the aegis of the National Shippers Association of Nigeria (NASAN), have blamed the accelerating prices of commodities in Nigeria on the fluctuating exchange rate for computing Customs duties, which translates to the high cost of doing business at the port.

According to them, the Nigeria Customs Service is yet to commence the implementation of the Central Bank’s directive of using the exchange rate at the submission of Form M to calculate import duties.
Innocent Akuvue, president general of the NASAN, told journalists during a recent press conference held in Lagos that the inability of Customs to implement the new directive is impacting negatively on the cost of doing business.

Citing an example, Akuvue said a PAAR was recently sent to him by Customs on March 20 with an exchange rate of N1,572.507 per dollar, which is different from the rate used in opening Form M.

“When the Form M for that PAAR was generated, the exchange rate for Customs duties has not become this crazy. What this means is that Customs has not started the implementation of the CBN directive of using the exchange rate on Form M to calculate import duties on the arrival of the goods,” he explained.

Akuvue outlined the high cost of FX, applying different FX rates on import duties by Customs, and difficulty in accessing FX as factors that are affecting business in Nigeria.

He said the national body of shippers is planning to begin an engagement with the management of Customs to discuss issues affecting the cost and ease of doing business at the port.

On her part, Ijeoma Ezeasor, secretary general of NASAN, said the surging inflation in Nigeria has a lot to do with the cost of doing business at the port as raw materials for food production are imported.

Pointing out that shippers include importers and exporters including manufacturers, Ezeasor said the economic reforms of the present administration including the liberalisation of the forex market, have set shippers in a state of confusion.

“We didn’t plan for the chaotic way the policies were being announced and the CBN taking over fiscal and not just the monetary policy. We are faced with many challenges that we didn’t plan for such that after selling our goods, we are not be able to pay our creditors abroad,” she said.

She said the warehouses of manufacturers are filled up because Nigerians are not able to purchase locally manufactured goods due to the hike in prices.

Also speaking, Leonard Ogamba, president of the Shippers Association of Lagos State, questioned Customs action of using a rate different from the rate on Form M, which was approved by the apex bank, to calculate import at the arrival of cargo.

He said the Federal Government through the Customs Act of 2023 domesticated the GATS principle of valuation, which approves the use of transaction value of imported goods for Customs valuation rather than the current use of benchmark value.

According to him, inconsistent policy is why the prices of commodities are fixed at the port and not the market because shippers cannot determine the landing cost of the cargo until the goods get to the importers’ warehouse.