CPPE Commends CBN’s Intervention in Customs Duty Exchange Rate Computation

* Urges apex bank to peg rate at N1,000/$

Dike Onwuamaeze

The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for approving the use of the exchange rate reflected on the import documentation ‘Form M’ at the onset of import transactions for the computation of customs duties exchange rate.

The CPPE, however, asked the central bank to take a step further to peg the customs duty exchange rate at N1,000/$ for the rest of the year.
The Chief Executive Officer of CPPE, Dr. Muda Yusuf, said yesterday in a public statement that pegging the rate at N1,000 would enable the CBN to fully address the troubling issue of the current prohibitive cost of cargo clearance at the ports, which has gone up by over 40 per cent in the last two months.

Yusuf said: “The CPPE 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 is a laudable response to the grievances of investors in the economy and would reduce the current uncertainty around imports and related transactions in the economy.

“The high 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 and putting thousands of maritime sector jobs at risk.
“There is also the added risk of cargo diversion to neighbouring countries and heightened smuggling which could jeopardise the realisation of customs revenue target.”

In the light of this, the CPPE appealed to the CBN to peg the customs duty exchange rate at N1000/$ 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.
The current customs duty exchange rate of N1488.9/$, it said, is still too high in the context of the current galloping inflation and difficulties facing businesses and the citizens.

It noted that instances of abandoned cargo are on the increase as a consequence of escalating trade cost, emphasising that these are not good outcomes for an economy seeking to ensure recovery, drive growth, promote inclusion and guarantee social stability.

He added that 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.

According to him, pegging the customs duty exchange rate resonates with the present intervention measures to mitigate the current hardships in the country.
“Besides, this proposition does not any way detract from the economic reform agenda of the present administration. If anything, it would complement the economic transformation measures because of the expected positive impact on competitiveness, productivity, cost reduction, deceleration of inflation and employment generation,” Yusuf said.