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The Central Bank of Nigeria and the Nigeria Customs Service have taken the ongoing foreign exchange reforms to the maritime sector with a 40 per cent increase in the exchange rate used for calculating import duty.
The NCS on Saturday raised the exchange rate used for the calculation of import duty from N422.30/dollar to N589/dollar.
The development, which has led to a corresponding 40 per cent increase in import duty on imported cargoes including vehicles, has angered operators in the maritime sector with clearing agents, freight forwarders, and importers calling for an immediate reversal of the policy.
Stakeholders said the policy would lead to job losses in the maritime sector and a drastic fall in the number of imported vehicles.
This, they said, could affect business and economic growth. Economists also said the government was insensitive, saying the policy was capable of affecting Nigerians negatively.
The development came barely one month after the Federal Government removed fuel subsidy and floated the naira. It also came at a time Discos began a gradual increase of their tariff.
The National Public Relations Officer, NCS, Abdullahi Maiwada, who confirmed the new exchange rate on its portal, said the agency was only implementing a CBN policy.
He said, “Whatever you see in our system is what has been communicated to us. It is determined by the Central Bank of Nigeria. So whatever we are using is what is obtainable as communicated to us. It is a monetary policy, we only implement what is given to us. It is a monetary policy and anything monetary is not determined by us, it is determined by the CBN. We only use what is communicated to us.”
Also confirming the development, the Youth Leader of the Association of Nigerian Licensed Customs Agents, at Tin Can Island, Remilekun Sikiru, said that the new rate had been effected on the Customs portal.
Our correspondent also confirmed the new rate on the Customs portal on Sunday.
Sikiru, also the CEO of Siktemstar Logistics, said that the customs duty payable on vehicles had increased astronomically.
He said, “For instance, the total duty payable on a Toyota Camry was N901,000 before now; but it has been increased to N1.270m; duty payable on Venza was N1.632m before now, but it has been increased to N2.278m. In the same vein, Toyota Corolla was N786,000, but now it has been increased to N1.097m while Lexus Rx which used to cost N1,828,000 now costs N2,550,447.”
He added, “It’s pathetic. We woke up to see this in the early hour on Saturday 24th of June 2023. The Federal Government needs to reverse this.”
According to him, this development may lead to cargo including vehicles being trapped at the terminals.
“The customs duty has been increased and it will lead to a heavy increment in duty payment on general goods/cargo. This will bring hardship on importers”
Also speaking, a freight forwarder and Chief Executive Officer, 2B Frank Nigeria Limited, Nwegbe Frankypaul, said, “Freight forwarders woke up on Saturday to realise that dollar rate has been increased from about N423 per dollar to about N590 per dollar.”
Nwegbe pleaded with the President to ensure depreciation on the value of older vehicles.
Reacting to this, the Chief Executive Officer of the Center for the Promotion of Private Enterprises, Dr Muda Yusuf, said the government needed to reverse the policy due to its effect on Nigerians and the economy.
“This has nothing to do with either supporting or negating the unification of the exchange rate. What I think is that this will translate to an additional burden on the citizens and businesses. The bottom line is that import duties have increased. The citizens have not recovered from the fuel subsidy removal, they are still expecting palliatives which have not come. Now, the Discos are talking about increasing the electricity tariff. How will the citizens feel? I don’t think the Federal Government is being sensitive to the plight of the people. Whoever gave the directive is not being sensitive; they should be talking about reducing some of these tariffs so that transportation costs can be reduced. The palliative is not only for salary earners, the government should do a palliative scheme that will affect everybody.
The CBN’s decision to float the currency was hailed by the organised private sector and economists who said the move would unify the country’s multiple exchange rates and sanitise the FX market.
The development means buyers and sellers of foreign currency in the official FX markets are now allowed to quote rates they find comfortable in the FX market, as against the previous practice where rates were dictated by the Central Bank of Nigeria.
Following the development, the naira has been on a free fall, weakening to 770.19/dollar at the close of trading at the I&E Window on Thursday, according to data from the FMDQ Securities Exchange.
Punch
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