CBN Adjust Customs Exchange Rate for the Fifth Time This Year

As the naira continues its battle against the dollar, the Central Bank of Nigeria (CBN) has swiftly adjusted the exchange rate for computing customs duties at the nation’s seaports. This has caused Apex Bank to change the exchange rate for the fifth time this year.

The exchange rate was reviewed upward on Wednesday morning, February 14, 2024, from N1, 444.56/$ to N1, 481.482/$, according to information obtained from the official trade portal of the Nigeria Customs Service.

This increase shows that importers of any commodity will pay more to clear their goods as import duties are benchmarked against the dollar.

The present review by the Central Bank of Nigeria (CBN) represents a 2.6% increase in the Customs duty rate and an increase of N36.922 per dollar compared to the previous rate of N1, 444.56/$.

From records, the Central Bank of Nigeria (CBN), on June 24, 2023, adjusted the exchange rate from N422.30/$ to N589/$. On July 6, 2023, the CBN changed the exchange rate from N589/$ to N770.88/$. On November 14, 2023, the CBN adjusted the exchange rate from N770.88/$ to N783.174/$. On December 7, 2023, the CBN adjusted the exchange rate from N783.174/$ to N951.941/$. On February 2, 2023, the CBN adjusted the exchange rate from N951.941/$ to N1,356.883/$. The previous change in the exchange rate was disputed and changed to N1,413.62/$.

“The level of uncertainty in Nigeria’s business environment is increasing by the day. Importers are seriously under pressure and unable to plan when the exchange rate is increasing rapidly,” said Tony Anakebe, a licensed customs agent.

He said Customs agents and freight forwarders are seriously considering significant protests if the situation continues.

Also, Eugene Nweke, a clearing and forwarding expert, said the apex bank policy of frequent exchange rate adjustment contributes to economic hardship and poverty in the country.

He said many businesses are closing shops, and citizens are also losing their jobs because companies are downsizing due to the hardship and unfriendly business environment.

Speaking also on this issue, the chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the upward adjustment would further worsen the challenges of importers by increasing the cost of imports and reducing trade.

“We have enough problems with the exchange rate. Now we are having the additional burden of import duty hike because it is like increasing import duty across the board, maybe by another 15% or more that is what it is,” Yusuf, a former director general of the Lagos Chamber of Commerce and Industry (LCCI), said.

According to him, the new duty exchange rate will fuel inflation, profit margins, and so many other things, saying the import duty increase is not an appropriate thing for the government to do now.

Reacting, former chairman of the Association of Nigeria Licensed Customs Agents (ANLCA), Bisiriyu Lasisi Fanu, said the hike in Customs duty through high FX rates will affect all goods in the market because every commodity in the market has imported input in it.

Fanu said the frequency at which the CBN adjusts the exchange rate has become worrisome, so there is so much overtime cargo at the port.

“CBN can’t change the rate and expect the importer who has calculated the landing cost and profit based on the previous exchange rate to survive. How do you expect the importer to generate the difference immediately to clear the goods from the port? It is not possible,” Fanu said.