CBN Implements 43% Increase in Import Duty

In a surprising move, the Central Bank of Nigeria (CBN) has approved a substantial 43% increase in the import duty rate, sending shockwaves through the business and trading communities. The exchange rate for duty collection, typically determined by the CBN, has witnessed a significant surge. As of December 2024, the exchange rate stood at N951.842 per $1, but it has now been adjusted to N1356.42.

Importers and stakeholders in the trading sector were taken aback by the sudden change, which comes on the heels of recent economic challenges. Dr. Muda Yusuf, the Chief Executive Officer of the Center for the Promotion of Private Enterprises (CPPE), expressed deep concern over the implications of this decision. He emphasized that the increase would exacerbate the existing economic difficulties, questioning if there was sufficient advisory input guiding the CBN Governor’s decision-making.

Yusuf stated, “I am shocked at the development. With all these suffering, with all these costs, we have not recovered from the unification of the exchange rate they just did, now another increase in duty.” He went on to highlight the far-reaching impact on various economic aspects, including a potential decline in trade volume due to increased import costs affecting transportation, shipment, and clearing processes. The maritime sector, already experiencing a reduction in activity, is likely to face further slowdowns.

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Expressing concern for the citizens and the broader economy, Yusuf cautioned against the upward revision of the exchange rate for import duty computation, foreseeing devastating consequences.

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Hassan Bello, former Executive Secretary of the Nigerian Shippers Council, echoed these sentiments, emphasizing that the velocity of the exchange rate’s impact extends across all sectors of the economy. Bello stressed the need for Nigeria to prioritize exports over imports, especially as the Naira continues to depreciate against the Dollar.

As stakeholders grapple with the repercussions of this unexpected decision, there is a growing call for transparency and a comprehensive understanding of the economic rationale behind the import duty rate hike. The business community awaits further clarity on how these changes will shape Nigeria’s economic landscape in the coming months.

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