CBN and Customs to Stabilize Import Duty Exchange Rate Amid Economic Challenges

To address the recent decline in cargo imports caused by fluctuating exchange rates, the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS) have announced plans to establish a fixed exchange rate for import duties. This initiative aims to create a stable financial environment, allowing business owners and importers to plan their activities more effectively.

Impact of Exchange Rate Volatility

The volatility of the naira against the US dollar has significantly impacted importation at Nigerian ports. Recent data indicates a 45% drop in vehicle imports, a 30% decrease in container traffic, and a 20% reduction in bulk cargo.

Collaborative Efforts for Stability

Bashir Adewale Adeniyi, the Comptroller General of Customs, confirmed that the NCS is working closely with the CBN and the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, to achieve a stable exchange rate for imports. This collaboration is expected to mitigate the adverse effects of exchange rate fluctuations on the maritime sector.

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Expert Recommendations

Muda Yusuf, Managing Director of the Centre for the Promotion of Private Enterprise (CPPE), suggested implementing a fixed Customs exchange rate between N900/$ and N1,000/$ for periods ranging from three months to a year. This measure is anticipated to enhance economic stability and predictability in international trade.

Industry Perspectives

Dr. Kayode Farinto, former acting president of the Association of Nigerian Licensed Customs Agents (ANLCA), emphasized the necessity of a predictive exchange rate for Customs purposes. He highlighted the severe impact of exchange rate instability on the volume of cargoes and the overall maritime industry. Farinto noted that a consistent exchange rate policy is crucial for maintaining import levels and supporting the livelihood of freight forwarders and other stakeholders in the sector.

Challenges and Future Outlook

The fluctuating exchange rate has not only reduced import volumes but also created hardships for freight forwarders, with many losing their jobs and others facing financial difficulties. Farinto called for a tripartite meeting involving the CBN, Customs, and the Ministry of Finance to address these challenges comprehensively.

Conclusion

The proposed fixed exchange rate for import duties represents a significant step towards stabilizing Nigeria’s import sector. By ensuring a predictable and stable exchange rate, the CBN and NCS aim to revive cargo importation levels and support the economic activities of business owners and importers.

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