The Centre for the Promotion of Private Enterprise says the Central Bank of Nigeria should peg the customs duty exchange rate at N1,000 per US dollar to ease economic hardship.
The Director of CPPE, Muda Yusuf, disclosed this in a statement on Sunday, while reacting to CBN’s latest decision on customs exchange rate.
OsunDailyNG recalls that CBN had instructed the Nigerian Customs Service, NCS, to adopt a foreign exchange closing rate on the date of the ‘Form M’ submission by importers for the clearance of goods and import duty assessment.
However, CPPE said the move did not address the high cost of cargo clearance, which had risen to over 40 per cent in the last two month.
“However, the CBN intervention did not address the bigger and the more troubling issue of the current prohibitive cost of cargo clearance at the ports, which had risen by over 40 per cent in the last two months.
“The high exchange rate for import duty assessment is fueling 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 neighboring countries and heightened smuggling, which could jeopardize the realization of customs revenue targets.
“In the light of this, the CPPE strongly appeals to the CBN to peg the customs duty exchange rate at N1000 per USD 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 per USD is still too high in the context of the current galloping inflation and difficulties facing businesses and the citizens. Instances of abandoned cargo are on the rise as a consequence of escalating trade costs.
“These are not good outcomes for an economy seeking to ensure recovery, drive growth, promote inclusion and guarantee social stability.
“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.
“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 in 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,” CPPE said.
OsunDailyNG recalls that amid the continued foreign exchange crisis, CBN had raised the exchange rate for cargo clearance to N1,605 per US dollar, the sixth increase in 2024.
