The Central Bank of Nigeria (CBN) has reduced the exchange rate used for the computation of import duties to N1,446.281/$, marking the eighth adjustment this month. This latest cut represents a 2.46% reduction from the previous rate of N1,481.875/$ used for the opening of Form M. The new rate was obtained from the official trade portal of the Nigeria Customs Service (NCS).

Former president of the Shippers’ Association of Lagos (SAL), Jonathan Nicol, criticized the frequent changes in the Customs import duty rate by the CBN, emphasizing that most countries have standardized windows for imports that are not subject to arbitrary adjustments by the government. “At a glance, you know your duty rates,” Nicol noted.

The reduction coincides with the naira maintaining moderate gains in both official and parallel markets, trading above N1500/$ in the black market. Yesterday, the currency was quoted at around N1480/$ in street markets, and on Tuesday, the Nigerian Autonomous Foreign Exchange Market (NAFEM) closed at 1465.68/$.

Nicol argued that the constant adjustments destabilize importers and drain their investments. He pointed out that duties are paid based on the rate issued by the bank on Form M, which should not be altered arbitrarily. Nicol also highlighted the challenge of the naira’s inability to appreciate despite Nigeria’s export of crude oil and gas, which should generate sufficient foreign exchange. “We should not be in this currency fluctuation turmoil at all,” he remarked.

Nicol further criticized the financial benefits reaped by the Nigeria Customs Service from these adjustments, backed by regulatory banks to meet misguided targets. “It exemplifies the failure of our economic policies. The resulting inconsistencies force importers to abandon their goods at ports or relocate to countries with stable import regulations,” Nicol stated.

He urged the CBN to stabilize the naira and avoid unnecessary interference with the cargo clearing exchange rate tied to the dollar. Taiwo Fatomilola, National Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria (AREFFN), also questioned how businesses can survive under such unstable exchange rates for trade both nationally and internationally.

Fatomilola criticized the current administration for lacking a strategic plan for traders and manufacturers in Nigeria. He noted that the existing monetary policy on trade and rising customs import duty exchange rates are detrimental to businesses in the country.

Meanwhile, the Comptroller-General of the NCS, Adewale Adeniyi, announced plans to collaborate with the Federation Account Allocation Committee (FAAC) Post-Mortem Sub-Committee to develop strategies aimed at boosting revenue generation and enhancing trade facilitation. This joint effort seeks to identify innovative solutions to optimize revenue collection and streamline trade processes, ultimately promoting economic growth and development in Nigeria.

Kabir Mashi, Chairman of the FAAC Post-Mortem Sub-Committee, commended the NCS for the revenues generated into the federation account and their swift response to issues. He encouraged the Comptroller-General to continue working towards improving revenue collection while declaring FAAC’s support to assist the NCS in facilitating trade.

The frequent adjustments to the duty FX rate and the fluctuating value of the naira pose significant challenges for importers and businesses in Nigeria. Stability in the exchange rate and a clear, strategic approach to economic policy are critical for fostering a more predictable and supportive business environment.

The CBN’s multiple adjustments to the exchange rate for import duties in May highlight ongoing volatility in Nigeria’s foreign exchange markets. With the naira trading above N1500/$ in the parallel market, importers face uncertainty and financial strain. Industry leaders like Jonathan Nicol and Taiwo Fatomilola have called for a more stable and strategic approach to economic policy to support businesses and ensure sustainable growth. Collaborative efforts between government agencies and industry stakeholders are essential to address these challenges and enhance Nigeria’s economic stability and development.