Again, CBN Adjust Exchange Rate on Import Duty

The Central Bank of Nigeria (CBN) has once again adjusted the exchange rate, this time to N1,413.62/$1, causing a stir among various stakeholders. Just a day prior, the exchange rate had been increased to N1,356.883/$1, leading to widespread criticism.

As it stands, this latest adjustment marks the sixth alteration in a series of rate changes since June 2023.

Maritime experts have expressed concerns over the implications of this increase on importers, who now face higher costs for clearing their goods at the port.

Import duty is closely tied to the exchange rate, and therefore, with the new rate in place, Nigerian importers are left to bear the weight of these rising expenses. In fact, this latest adjustment means that import duty on goods has tripled in just seven months under the Bola Ahmed Tinubu government.

Importers and Customs brokers have strongly opposed this increase, highlighting the additional burden it places upon an already challenging exchange rate situation.

Dr. Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE) and former director-general of the Lagos Chamber of Commerce and Industry (LCCI), emphasized the negative impact on importers, stating that it will only exacerbate the difficulties they face. Import costs are set to skyrocket, leading to a potentially significant reduction in trade.

These prevailing circumstances have ignited a debate on government policies and their impact on the economy. Many believe that the government shoulders the responsibility for this predicament, rather than Customs.

Importers and industry experts point out the detrimental effects of the exchange rate increase, such as pushing more people into poverty and hindering the importation of essential goods due to limited access to foreign exchange.

The consequences of this latest adjustment are already being felt, as the ports experience a decline in activity, importers grapple with financial challenges, and individuals struggle to source necessary imports.

The situation calls for urgent intervention and a reconsideration of government policies to mitigate the adverse effects on the economy and the well-being of its citizens.