Nigerian Government Adjusts Customs Exchange Rate, Impacts Importers and Clearing Agents.
In a significant move with far-reaching implications for importers and clearing agents, the Federal Government of Nigeria has adjusted the exchange rate calculations for import duties in the Nigerian Customs Service (NCS).
The rate has been revised from N770.88/$ to N783.174/$, reflecting a shift in policy five months after the Central Bank of Nigeria (CBN) adopted a floating exchange rate for the Naira.
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This adjustment, now visible on the NCS portal, aligns with President Bola Tinubu’s commitment to a single exchange rate regime, aiming to bring stability.
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However, economic challenges and fiscal policy measures have contributed to a 70% drop in importation, leading to higher costs for clearing cargoes in Nigeria compared to other African countries.
During a recent meeting with port stakeholders, the Minister of Marine and Blue Economy, Adegboyega Oyetola, addressed the issue of abandoned and overtime cargoes, some of which have lingered at ports for over a decade due to clearing bottlenecks. In response, the NCS has formed a committee to address the matter, in line with the new Customs Act empowering it to dispose of containers exceeding their allotted time within the ports.
The Comptroller-General of Customs, Adewale Adeniyi, emphasized the primary objective of port decongestion, promising enhanced efficiency and trade facilitation.
However, the exchange rate adjustment has immediate consequences for the import and export value chain stakeholders. Importers and clearing agents must adapt to the new rates when quoting for new jobs, potentially leading to increased business costs.
The economic impact is already evident, raising concerns about the effect on the prices of used cars and other goods. As the government aims to boost revenue collection, industry experts warn of potential hardships in 2024, impacting citizens and businesses.
Rising prices and the economic strain could lead to discontent and pose challenges for various sectors. Analysts emphasize the importance of the government’s sensitivity to the challenging economic conditions and advocate for palliative measures to mitigate the impact on citizens and businesses.
The potential consequences of increased costs imposed by stringent fiscal policies may further strain an already delicate economic situation, potentially affecting local and international trade.
