…As CBN again slashes Customs exchange rate By 7.1%
Despite significant drop in foreign exchange at the official, parallel markets as well as exchange rate for calculating import duties by the Nigeria Customs Service (NCS), cargo and vehicles importation are yet to pick up at the nation’s seaports and airports across the country, LEADERSHIP can report.
This is as the Central Bank of Nigeria (CBN), again adjusted the Customs exchange rate for clearance of cargoes at the nation’s seaports and airports from N1238/$1 to N1,150/$1.
ccording to data on Nigeria trade hub, the exchange rate has been adjusted by 7.1 per cent or N88 from its last rate of N1,238/$1 by the CBN.
The reduction of the Customs exchange rate is in response to appreciation of naira against the United States dollar in the official and parallel markets.
Also, the CBN had earlier stated in response to complaints over the frequent changes in the Customs’ FX rate that the exchange rate on the data of the Form M application will be used in calculating the duties collection.
The Nigeria Customs Service (NCS), in collaboration with the CBN, regularly adjusts the exchange rate to align with the official market rate on the NAFEM window, resulting in frequent changes in the rate.
However, clearing agents have called on the CBN to ensure that the exchange rate for cargo clearance is reduced to N600/$1, to boost port activities.
They argued that activities is yet to pick up at the port despite the depreciation of the United States dollar and appreciation of naira in the last few months.
Speaking, a clearing agent operating at Tin-Can Island port, Akinola Oluwaseun, said sustaining the foreign exchange markets will make economic activities boom in the seaport.
According to him, there has been a significant drop in Customs duty payable on imported Cargo and vehicles.
He stated that agents, however, target Exchange Rate for Customs Clearance to be between N500 or N600/$1 for activities to fully take off.
“The money payable for Customs’ exchange rate has dropped and that has made the duty payment drop. We hope the exchange rate can drop to N600/$1. Foreign exchange especially dollars has started dropping in the foreign exchange markets as well as in the clearance of cargoes at the seaport. We hope that by next week, FX will come down more and activities will pick up,” Akinola stated.
LEADERSHIP reports that last Wednesday, the naira strengthened to N1,250 to a dollar, gaining 0.8 per cent (N10) over N1,260 closed on Tuesday at the parallel market, popularly called the black market.
This showed appreciation compared to N1,825/$1, it traded at the parallel market on February 20, 2024.
Also, the Customs FX rate for computing duty on imported cargo dropped from N1,515/$1 in March, 2024 to N1,150/$1 on Sunday, April 21, 2024.
However, maritime experts have said that low import despite naira gaining strength was due to planning and to be assured that the policies ensuring forex growth is sustainable.
According to the experts, sustainability of the FX reforms will lead to further investment by importers and other investors.
Speaking to LEADERSHIP, the chief executive officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said it will take a few weeks before activities can pick up at the nation’s sea and airports.
According to the former director general, Lagos Chamber of Commerce and Industry, the international trade cycle whether import or export takes 60 days so it takes time to make a decision to import, to source the fund and to mobilise and do all sorts of things.
“There is normally a lag when we have policy change and when we have improvement in some economic indicators and when we begin to see the response from investors. International trade cycle, whether import or export, takes 60 days, so it takes time to make a decision to import, to source for funds, to mobilise and do all sorts of things.
“Secondly, people already have ongoing transactions and some have stock that they have bought so until they exhaust some of those things we can now begin to rush and jump into transactions. Before we can see the impact, we can talk about 2 months or more.
“Also, there are people who will want to see how sustainable the policies that led to the strengthening of naira before they can resume Importation. So, it’s more about sustainability of policies that will lead to confidence for Importation of cargoes.
“However, let’s give some weeks then we will start seeing the improvement and impact interns of Port traffic,” Dr Yusuf stated.
On his part, the National Publicity Secretary, Association of Nigerian Licensed Customs Agents (ANLCA), Emmanuel Onyeme, stated that the government should encourage export in order to balance the nation’s trade deficit.
Onyeme aligned with CPPE Chief, Dr Yusuf, saying importers are waiting for sustainability of the exchange rate before they can start importing cargoes into the country.
He, however, argued that cargo import has risen by 20 percent in the last one month compared to last December when naira started depreciating.
“Actually, importation is improving compared to when the exchange rate was high. Manufacturers have started bringing raw materials but not as what they are doing before. They have improved and those importing used vehicles too have improved as we can see shipment coming in.
“We can say the improvement was by It’s 20 percent increment. I think the government needs to place more emphasis on export to see how incentives can be introduced to see how people can go into export. Because with more exports, the country will get more forex and that will sustain the current gain of the reform in the FX markets,” he stated.
To achieve balance of trade, the import and export must be balanced and the government should sustain the reform that made naira gain against Forex, they should continue doing it. If we stabilise exports, there will be more foreign exchange to stabilise the economy, so sustainability will improve port activities and as such, the economy will improve,” Onyeme argued.
On his part, a clearing agent operating at Tin-Can Island port, Akinola Oluwaseun, said sustaining the foreign exchange market’s gain will make economic activities boom in the seaport.
According to him, there has been a significant drop in Customs duty payable on imported Cargo and vehicles.
He stated that agents, however, target Exchange Rate for Customs Clearance to be between N500 or N600/$1 for activities to fully take off.
“The money payable for Customs’ exchange rate has dropped and that has made the duty payment drop. We hope the exchange rate can drop to N600/$1. Foreign exchange especially dollars has started dropping in the foreign exchange markets as well as in the clearance of cargoes at the seaport. We hope that by next week, FX will come down more and activities will pick up,” Akinola stated.
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