The Central Bank of Nigeria (CBN), on Wednesday, slashed the exchange rate for computing Customs duties at the nation’s seaports and airports by 0.76 per cent.
The slash, analysts argued, was as a result of the naira that strengthened against the dollar at the official window, on Tuesday.
Naira on Tuesday strengthened by 0.90 per cent against the dollar as supply increased at the official foreign exchange (FX) market.
After trading on Tuesday, the local currency appreciated as the dollar was quoted at N1,603.38, stronger than N1,617.96 quoted on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data released by the FMDQ Securities Exchange.
LEADERSHIP reports that the naira also regained its strength at the NAFEM, the nation’s official window as naira closing at N1,603/$1, on Tuesday.
However, due to the appreciation of naira in the official market, the Customs duty rate was reviewed downwards from N1, 624.7/$ to N1, 612.281/$1, according to information on the National Trade Hub, the official trade portal of the Nigeria Customs Service.
This represents a 0.76 percent drop when compared to the old rate of N1, 624.7/$1 used as of Tuesday, and a reduction of N12.419 less on a dollar.
To this end, importers that opened Form M today will pay less to clear their cargoes as import duties are benchmarked against the dollar.
Also, importers will open Form M at a lower rate compared to those who opened Form M on Tuesday, 12th March, 2024 according to the apex bank’s new directive to Customs to use the rate on the date of submitting Form M for calculating import duties.
However, speaking to LEADERSHIP, the former acting president, Association of Nigerian Licenced Customs Agents (ANLCA), Dr Kayode Farinto, advised the CBN to have a predictive exchange rate workable for a period of two quarters.
According to him, “this would save the nation’s ports and importation from declining. We can adopt from January – June an exchange rate of N1000=$1 for Customs purposes/cargo clearance. This will stabilise our import and affirm confidence on our importation knowing fully well that, whatever the situation, the exchange adopted is N1000 to a dollar. If there is need for an increase, it will be obvious to all and there would have been sensitisation from the 2nd week of June, for any increase.
“The CBN’s decision to advice that the Nigeria Customs Service and other related parties adopt the closing foreign exchange rate on the date of opening Form “M” for the importation of goods, as the foreign exchange rate to be used for import duty assessment is a step in the right direction, kudos to the new leadership of the CBN for the directive on Form “M” which should be the norm, not necessarily an intervention or solution but conforming to the international best practices.
“You recall that, in the last one decade we have been clamouring that the foreign exchange rate at the time of opening Form “M” ought to be sacrosanct for Import duty collection at the time of clearance. The CBN directive will help the Nigeria Customs Service from benchmarking, which she has resorted to in the last few years and not a solution to the fluctuating exchange rate.”
He said, if there must be sanity in the nation’s economy, then, the CBN should overhaul her entire system.