The Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to peg the customs duty exchange rate at N1000 to the dollar for the remainder of 2023. This request aligns with the Federal Government’s pledge to alleviate the current economic difficulties faced by citizens and businesses.
CPPE’s Founder, Dr Muda Yusuf, advised on this in Lagos on Sunday. He welcomed CBN’s decision permitting the use of the exchange rate listed on import paperwork at the start of an import transaction. This should lessen the uncertainty around imports and similar business dealings.
However, Dr Yusuf noted that the move does not resolve the more worrying issue of the exorbitant cost of clearing cargo at ports, which has increased over 40% in two months. The high exchange rate for computing import duties worsens production expenses and inflation, apart from the cost-of-living crisis. It also jeopardizes thousands of jobs in the maritime sector.
Additionally, high import costs encourage cargo diversion to neighboring countries and greater smuggling, jeopardizing customs revenue targets. At N1488.9 per dollar, the current customs duty exchange rate remains excessive considering spiraling inflation and business difficulties.
Dr Yusuf revealed that locking legally imported goods in ports until importers source forex from alternative sources to offset charges, port congestion from uncleared goods, and greater smuggling activities have been reported. These outcomes do not support economic recuperation, growth, inclusion and stability.
Pegging the customs duty rate aligns with present interventions to ease difficulties. It complements the administration’s economic reform agenda owing to the anticipated positive impact on competitiveness, productivity, cost cuts, slowing inflation and job creation.
The CPPE urges CBN to conscientiously consider pegging the customs duty exchange rate at N1000/$ for 2023’s remainder. This rate reflects both the flexible exchange rate regime and current financial realities. A favorable customs duty valuation framework will ease forex sourcing for legitimate imports, reducing transaction costs and prices. Ultimately, this supports businesses, safeguards jobs and incomes and slows inflation
Source Hardship: CPPE wants CBN to peg customs duty at N1000/$. Published in Vanguard by