‘Peg customs exchange rate at N1000/$1 to ease hardship – CPPE tells CBN


The Central Bank of Nigeria (CBN) has ordered that the rate used by Nigeria Customs should match the information on the importers’ Form M, in response to the exchange rate adjustment occurring more than six times this year.

Forum M is a requirement key to commence the importation process which is used importers or their authorized representative to provide necessary information to the bank for processing. The volatility of the exchange rate, according to analysts and importers, have contributed to the rising cost of living in the country where inflation is in the border of 30 per cent.

This is as the Centre for the Promotion of Private Enterprise(CPPE) has appealed to the Central Bank of Nigeria (CBN) to peg the customs duty exchange rate at N1,000 per dollar for the rest of the year in line with the federal government’s commitment to ease the current hardships on the citizens and the burden on businesses.

Dr Muda Yusuf, The chief executive officer(CEO) of CPPE stated that the Chamber welcomes the decision of the CBN to approve the use of the exchange rate reflected on the import documentation (Form M) at the onset of import transaction.

“This was a laudable response to the grievances of investors in the economy. This would reduce the current uncertainty around imports and related transactions in the economy.”

The CBN, in a circular issued by the director, Trade and Exchange Department, Dr Hassan Mahmud, to the Nigerian Customs Service and the general public, said, it noted the concerns of importers of goods and services n the irregular changes in the Import Duty Assessment levies applied by the NCS.

The apex bank noted that the uncertainty of the forex rate had “further built uncertainties around the pricing structure of goods and services in the economy and created abnormal increases in the final sale prices of items, which is largely driven by uncertainties, rather than traditional market fundamentals, with implications to near term inflation trends.
“To this effect, the CBN wishes to advise that the Nigeria Custom Services and other related Parties adopt the closing forex rate on the date of opening Forum M for the importation of goods. as the forex rate to be used for import Duty Assessment this rate remains valid until the date of termination of the importation and clearance of goods by importers.
“Respectively, this would enable the Nigeria Custom Services and the importers to effectively plan appropriately and reduce the uncertainties around different daily exchange rate in determining their revenue or cost structure.
“Therefore, effective 26th February 2024, the closing rate on the date of opening of Form M for the importation of goods and services would be the rates that would apply for the assessment of import duty. This supersedes the requirements of Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual. (Revised Edition), 2018
“While the CBN is mindful of the initial volatility and price distortions in the aftermath of the forex market liberalisation, the Bank is confident that these reforms, would in the medium term, ensure stability in the market and entrench market confidence necessary to attract investment capital for the growth and development of the Nigerian economy.”
Dr. Yusuf stressed that, the CBN intervention did not address the bigger and the more troubling issues of the current prohibitive cost of cargo clearance at the ports which had risen by over 40 per cent in the last two months, saying, the high exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis and putting thousands of maritime sector jobs at risk.
He noted that there is also added risk of cargo diversion to neighbouring countries and normal smuggling which could jeopardise the realisation of customs revenue targets.
Yusuf said: “the CPPE strongly appeals to the CBN to peg the customs duty exchange rate at N1000 per dollar for the rest of the year. The current customs duty exchange rate of N1488.9 per dollar is still too high in the context of the current galloping inflation and difficulties facing businesses and the citizens.
“Instances of abandoned cargo are on the increase as a consequence of escalating trade costs.  These are not good outcomes for an economy seeking to ensure recovery, drive growth, promote inclusion and guarantee social stability.
“Businesses are currently grappling with multiple macroeconomic and structural headwinds which are negatively impacting profitability, competitiveness, job creation, retention of existing jobs and business sustainability.”

Popular Related

PH refinery: Marketers eye fuel price reduction, ready to load

The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Major Energy Marketers Association of Nigeria (MEMAN) have projected a marginal decreased in the...

Investors lose N252bn on bearish equity trading

As stated by the Nigerian Exchange, stock investors loss hit N252bn After Easter holidays, the market lost about N467bn between Tuesday and Thursday. The bearish trend...

Transcorp Power declares N3.13 dividend

Transcorp power, recently listed on NGX has announced a dividend growth of N3.13 per share. According to the report, the Nigerian Exchange Limited, the second...

Bad weather behind flight cancellation in P’Harcourt airport – Arik Air

Arik Air has given an official statement explaining the reasons behind the delay of flights, leading to passengers being stranded at Port Harcourt was...

VFD Group lists over 63 million additional shares on NGX

On the Nigeria Exchange daily official list, VFD Group has listed an additional 63,342,445 ordinary shares of 50kobo per shares. This was revealed in NGX...

Axxela gets ISO recertification

The successful recertification of its integrated management system has been announced by Axxela Limited, a natural gas distribution and power production company. According to the...

New electricity tariff may drop if naira rebounds further – Adelabu

Adebayo Adelabu, the Minister of Power, said if the exchange rate falls below N1,000 to a dollar, the N225 Kilowatt-Hour being paid by electricity...

FG increases electricity tariff by 300 percent

The Nigerian Electricity Regulatory Commission, NERC, has disclosed effective from 1st of April 2024 electricity tariff has increased to N225 ($0.15) per kilowatt-hour from ...

Reps order CBN to restrain banks from withholding customers’ reversed funds

On Tuesday, the House of Representatives directed the Central Bank of Nigeria to prevent commercial banks from keeping customer money that have been reversed...

Seplat seeks quick solutions to oil theft

Seplat Energy Plc has urged for the swift remedying of the  challenges posed in the oil and gas sector pertaining to theft and vandalism. Mr...