FG Modifies Customs Exchange, Import Prices Will Rise

Imported items will cost more as FG modifies the customs exchange rate

Modifications to the Nigerian Customs Service's (NCS) exchange rate computations for import levies have been announced by the federal government of Nigeria.

Only five months have passed since the CBN floated the Naira. As to a report published in The Guardian, the Nigerian Customs Service (NCS) exchange rate estimates of import charges were modified by the Federal Government yesterday, from N770.88/$ to N783.174/$.

The NCS portal was updated with the revised rates immediately after importers and clearing agents were informed that they would direct importers and clearing agents in estimating costs for new jobs and capturing payments.

This modification is consistent with the CBN's recent move to allow banks to sell foreign exchange at prices set by the market. The goal of the shift to a single currency rate regime was to promote economic stability, in line with President Bola Tinubu's pledge.

However, this action has led to a 70% decrease in importation, which has increased the cost of cargo clearing in Nigeria relative to other African nations, along with ongoing economic difficulties and fiscal policy measures.

In a recent meeting with port stakeholders, Minister of Marine and Blue Economy Adegboyega Oyetola brought up the problem of abandoned and delayed cargoes in response to complaints about port congestion. Decongestion measures are required since certain cargoes have been stuck at ports for more than ten years as a result of clearing bottlenecks. The minister claimed that because clearing goods at the ports of Ghana, Togo, Cameroon, and other nearby nations is less expensive, cargoes intended for Nigeria are diverted there.

Under the new Customs Act, which gives it the authority to dispose of containers that are left in the ports after their designated time, the Nigerian Customs Service has established a committee in reaction to this. Congestion in ports is a critical goal, as Comptroller-General of Customs Adewale Adeniyi emphasized, promising improved productivity and trade facilitation.

"The Federal Government exchange rate and Customs exchange rate for customs valuation purposes is another wicked fiscal policy to further kill international and domestic trade," stated Ajanonwu Vincent, Head of the Customs and Trade Facilitation Committee of the Importers Association of Nigeria (IMAN).

He claims that government organizations are solely interested in impoverishing and providing the populace with constant increases in tariffs and duties, rather than considering how to develop both local and international trade.

It would be recalled that on Wednesday, the NCS declared that, in just four months, from July to October 2023, revenue collection increased by an astounding 66.5%. By October, the monthly money collected had reached N333.9 billion, indicating a 65.5% increase from the service's average revenue of N202 billion in the first half of the year, according to Comptroller-General Adeniyi.

Though NCS is rushing to fulfill its revenue objective through the ports in order to help the government fund its budget, Vincent cautioned that 2024 will be a difficult year of suffering and misery for the populace due to the daily price increases for everything.