The transition towards a single exchange rate regime, echoing President Bola Tinubu’s commitment, was aimed at fostering economic stability.
The Federal Government of Nigeria has announced adjustments to the Nigerian Customs Service (NCS) Exchange Rate calculations for import duties.
According to a report by The Guardian, the exchange rate has been shifted from ₦770.88/$ to ₦783.174/$, marking a notable policy change just five months after the Central Bank of Nigeria (CBN) floated the Naira.
The adjustment now reflected on the NCS portal, is in line with the CBN’s recent decision to authorise banks to sell foreign exchange at market-determined rates.
The transition towards a single exchange rate regime, echoing President Bola Tinubu’s commitment, was aimed at fostering economic stability.
However, this move, coupled with prevailing economic challenges and fiscal policy measures, has resulted in a 70% drop in importation, contributing to higher costs for clearing cargoes in Nigeria compared to other African countries.
Addressing the concerns over congestion at ports, the Minister of Marine and Blue Economy, Adegboyega Oyetola, stated the issue of abandoned and overtime cargoes during a recent meeting with port stakeholders.
Some cargoes have lingered at ports for over a decade due to clearing bottlenecks, prompting a necessity for decongestion efforts.
In response to this, the Nigerian Customs Service has inaugurated a committee, in compliance with the new Customs Act that empowers it to dispose of containers exceeding their allotted time within the ports.
The Comptroller-General of Customs, Adewale Adeniyi, stressed the paramount objective of port decongestion, pledging increased efficiency and trade facilitation.
What you should know
Importers and clearing agents are now faced with the task of adapting to the new exchange rates when quoting for new jobs, potentially leading to increased business costs.
Already, the economic impact is being felt, with concerns arising about the effect on the prices of used cars and other goods.
As the government endeavors to boost revenue collection, with the NCS reporting a 66.5% surge in revenue between July and October 2023, industry experts warn that 2024 may bring increased hardships for the masses.
The rising prices and the impact on businesses could potentially lead to discontent, posing challenges for economic players and causing disruptions in various sectors.
Analysts argue that the government should demonstrate sensitivity to the challenging economic conditions and consider implementing palliative measures for citizens and businesses.
The heightened costs imposed by stringent fiscal policies may further strain an already delicate economic situation, potentially impacting local and international trade. As stakeholders grapple with these changes, the nation remains watchful of the unfolding economic landscape.
