Again, Import Duty Exchange Rate Drops to N1,260.9/$, As Customs CG Raises Alarm on Negative Effects

By DAPO OLAWUNI

The exchange rate for calculation of import duties into Nigeria has dropped again from N1,330.26 to N1,260.49, this is even as the changes has taken effect immediately on Nigeria Customs Service portal from 5th of April 2024.

Port stakeholders have raised concerns that the current import duty exchange rate of N1,260.49/$, is higher than the prevailing official exchange rate of the Central Bank of Nigeria (CBN) which is pegged at N1,190/$

Meanwhile, the Comptroller-General of the Nigeria Customs Service, Wale Adeniyi during a press briefing on Wednesday on performance of the service for the first quarter of year 2024, lamented that the exchange rate was adjusted 28 times by the CBN.

Adeniyi lamented that, notwithstanding the gains this increments would have on the revenue of the service, the negative implications it has on transaction volumes are significant and it outweighs the benefits.

According to the customs boss “The significant fluctuations in exchange rates applied in the customs clearance of consignments posed considerable difficulties.

“As per protocol, the exchange rate utilized by Customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the Central Bank of Nigeria (CBN).

“In the last quarter, a total of 28 rates were directed by the CBN, ranging from NGN 951.94 per USD 1 in January 2024 to a peak of NGN 1,662.35 per USD 1 in February 2024.

“While a singular exchange rate of NGN 951.94 per USD 1 was maintained in January, February witnessed 15 different spot rates ranging from NGN 951.94 per USD 1 to NGN 1,662.35 per USD 1.

“March saw a total of 13 different spot rates applied, ranging from NGN 1,303.84 to NGN 1,630.16. These fluctuations resulted in an average applied exchange rate of NGN 1,314.03 per USD 1 in the clearance of Customs goods during the quarter.

“The repercussions of these fluctuating rates have sent concerning signals to our stakeholders, affecting and disrupting activities. Beyond the speculation regarding potential gains it may have on NCS revenue, the implications on transaction volumes are significant and outweigh any possible benefits.

“These concerns are already manifesting in current activities, with the potential for lagged effects in the coming months. Mindful of these implications on the trading public and the overall economy, the NCS, with the support of the Honourable Minister of Finance, has initiated periodic consultations with the Central Bank of Nigeria (CBN) to mitigate the potential impact of exchange rate fluctuations on import activities.

“The relative stability in the past days can be attributed to the interventions of the Honourable Minister of Finance and the Governor of the CBN”