The Centre for the Promotion of Private Enterprise (CPPE) has raised concerns that Nigeria could lose cargo to neighboring countries due to the Nigerian Customs Service’s use of a high exchange rate for import duties collection, potentially driving business away from the nation’s ports.
According to nairametrics.com, the group disclosed this in a statement signed by its Director/Chief Executive Officer (CEO), Dr. Muda Yusuf where they lamented the impact of the high exchange rate for import duties collection on businesses and the cost of living in the country.
According to the statement, the risk of cargo berthing in neighbouring countries could negatively impact the revenue generation drive of the federal government.
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The statement reads, “The high and volatile exchange rate for import duty assessment is fuelling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis, putting maritime sector jobs and investments at risk and weakening investors’ confidence. There is also the added heightened risk of cargo diversion to neighbouring countries and smuggling which could jeopardize the realization of customs revenue target.”
It is important to note that in the first half of the year, the Nigeria Customs Service reported a decline in cargo throughput despite a 127% increase in revenue during the period.
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Call on President Tinubu to fix the customs exchange rate at N1000/$
The CPPE further reiterated its appeal to the Presidency to set the customs duty exchange rate at N1000/$ for the next six months through an Executive Order. It noted that the recommendation aligns with the federal government’s current efforts to ease the hardships faced by citizens and businesses.
It explained that even the Presidential Committee on Fiscal Policy and Tax Reforms had made a similar recommendation, and the Organized Private Sector (OPS) strongly supported this approach.
It warned the customs duty exchange rate on the Nigeria Customs Service portal stands at N1578/$, a rate that has been changing almost weekly and is detrimental to the investment climate.
The Ministry of Finance, not CBN should fix the import duty rate. Also, the centre raised two concerns on foreign exchange policy and the other related to trade policy. It argued that the Central Bank of Nigeria’s (CBN) role should conclude with the opening of Form M for importers within the framework of the existing foreign exchange policy.
According to the CPPE, matters pertaining to international trade should fall under the jurisdiction of the Federal Ministry of Finance and the Federal Ministry of Trade and Investment, as these institutions are legally responsible for trade policy.
It stated that CBN’s determination of the customs duty exchange rate was described as an overreach into trade policy, which requires immediate correction.
