In a surprising turn of events, the Central Bank of Nigeria (CBN) has readjusted the exchange rate on the Customs platform from the previously increased N1,356.883/$1 to a new rate of N1,413.62/$1.
This revision, coming less than 24 hours after the initial adjustment, follows vehement opposition from stakeholders and experts within the maritime industry.
The initial exchange rate adjustment, which raised the rate from N951.941/$1 in December to N1,356.883/$1 on February 2nd, 2024, had sparked concerns among importers and Customs brokers.
Critics argued that the increase would impose additional burdens on importers, who would now face higher costs for clearing their goods at the port, as import duty is benchmarked against the dollar.
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Maritime experts noted that the recent surge in the exchange rate would result in Nigerian importers paying significantly more for the clearance of their goods. Import duty rates have now tripled within the span of seven months under the Bola Ahmed Tinubu government.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, expressed shock at the continued adjustments, emphasizing that this would exacerbate the economic challenges already faced by importers. Yusuf warned that the increased exchange rate would likely lead to a reduction in trade as the costs of importation soar.
Importers and Customs brokers had strongly opposed the initial 43 percent increase in the Customs import duty rate, expressing concerns about its impact on the already fragile economic environment. Stakeholders argued that the government’s policies were pushing more people into poverty, as the rising exchange rates and import duty costs hindered trade and economic activities.
Amidst growing discontent, industry leaders urged the government to intervene, emphasizing that the situation could lead to a crisis if left unaddressed. Concerns were raised about rising unemployment, shuttered businesses, and the overall economic strain on citizens.
The adjustments, from N422.30/$1 in June 2023 to the current N1,413.62/$1, have left many importers grappling with the widening differentials, potentially leading to abandoned cargoes at seaports. The future trajectory of exchange rates remains uncertain, leaving importers and stakeholders anxiously awaiting a more stable economic environment.
