The Centre for the Promotion of Private Enterprise is advocating for the Central Bank of Nigeria to establish the customs duty exchange rate at N1,000 per US dollar in a bid to alleviate economic hardship.
According to CPPE Director Muda Yusuf, the recent directive from CBN to align the customs exchange rate with the foreign exchange closing rate upon ‘Form M’ submission by importers does not adequately address the significant increase in cargo clearance costs, which have surged by over 40% within the last two months.
Yusuf emphasized that the current high exchange rate for import duty assessment is exacerbating inflation, raising operational expenses for businesses, intensifying the cost of living, and endangering maritime sector jobs. Additionally, there is a growing risk of cargo diversion to neighboring nations and an upsurge in smuggling activities, posing a threat to meeting customs revenue targets.
In response to these challenges, CPPE is calling upon the CBN to fix the customs duty exchange rate at N1,000 per USD for the remainder of the year to align with the government’s commitment to alleviating the hardships faced by citizens and businesses.
The existing rate of N1,488.9 per USD is deemed excessively high amidst soaring inflation rates and the difficulties encountered by businesses and individuals. The rise in abandoned cargo incidents due to escalating trade expenses further underscores the urgent need for intervention.
CPPE asserts that pegging the customs duty exchange rate at N1,000 per USD aligns with ongoing efforts to address economic challenges and complements the government’s reform agenda. This measure is expected to enhance competitiveness, productivity, cost efficiency, inflation control, and job creation, ultimately facilitating economic recovery and fostering social stability.
Amidst the persistent foreign exchange crisis, CBN has progressively increased the exchange rate for cargo clearance to N1,605 per US dollar, marking the sixth adjustment in 2024.
