In line with ongoing foreign exchange reforms, the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS) have implemented a 40% increase in the exchange rate used for calculating import duties in the maritime sector.
On Saturday, the NCS adjusted the exchange rate for import duty calculation from N422.30/dollar to N589/dollar. This has resulted in a corresponding 40% rise in import duties for cargoes, including vehicles. The new policy has sparked outrage among stakeholders in the maritime sector, with clearing agents, freight forwarders, and importers calling for an immediate reversal.
Concerns have been raised about the potential impact of the policy on job losses within the maritime industry and a significant decline in the importation of vehicles, which could have adverse effects on business and economic growth. Economists have criticized the government for insensitivity, stating that the policy may have negative repercussions for Nigerians.
This development comes just a month after the Nigerian government removed fuel subsidies and floated the naira. It also coincides with gradual tariff increases by electricity distribution companies (Discos).
Abdullahi Maiwada, the National Public Relations Officer of the NCS, confirmed the new exchange rate, explaining that it was implemented based on the CBN’s monetary policy directives. Stakeholders, including Remilekun Sikiru, the Youth Leader of the Association of Nigerian Licensed Customs Agents, expressed their dismay over the astronomical increase in customs duty for vehicles. Sikiru highlighted that the higher duties could result in cargo, including vehicles, being stranded at terminals.
Freight forwarders, such as Nwegbe Frankypaul, CEO of 2B Frank Nigeria Limited, woke up on Saturday to find that the dollar rate had surged from approximately N423 per dollar to about N590 per dollar. Frankypaul appealed to the President to consider depreciation in the value of older vehicles.
Dr. Muda Yusuf, CEO of the Center for the Promotion of Private Enterprises, urged the government to reverse the policy due to its adverse effects on Nigerians and the economy. He emphasized the need for the government to provide palliative measures, particularly as citizens are still grappling with the removal of fuel subsidies and the anticipated increase in electricity tariffs.
Lucky Amiwero, Founder of the National Council of Managing Directors of Licensed Customs Agents, pointed out that allowing the naira to float freely in terms of exchange would have consequences for the prices of goods and result in job losses for many licensed customs agents.
Nnadi Ugochukwu, Vice President of the National Association of Government Approved Freight Forwarders, highlighted how the new exchange rate had significantly increased the cost of clearing goods.
The policy has drawn mixed reactions from economists. While Ibrahim Tajudeen acknowledged that it aligns with the government’s foreign exchange market reforms, he emphasized the potential negative impact on Nigerians and suggested that the government should take measures to alleviate the burden on the masses.
The recent move by the CBN to remove the rate cap on the naira at the official Investors’ and Exporters’ Windows of the foreign exchange market was part of the broader foreign exchange market reform. These reforms aim to unify the multiple exchange rates in the country and bring stability to the foreign exchange market.
