Nigeria Customs has reduced the forex rate for import duties to N1,480 per US dollar, down 3.28% from N1,530. The new rate, effective Monday, aims to manage import costs but raises inflation concerns. Experts debate pros and cons amid Nigeria's currency challenges.
The Nigeria Customs Service (NCS) has lowered the foreign exchange (FX) rate used for calculating tariffs and import duties to N1,480 per dollar. This reduction was noted on the federal government’s single window trade portal as of Monday. The new rate marks a 3.28 percent decrease from the previous rate of N1,530/$, which had been in effect since May 17.
The updated customs rate is slightly below the official FX rate of N1,510/$ recorded at the close of trade on May 24. Typically, the NCS adopts FX rates recommended by the Central Bank of Nigeria (CBN), based on trading activities in the official FX market. By the end of the latest trading session, the Nigerian naira appreciated N1,339.33/$.
Muda Yusuf, director-general of the Centre for the Promotion of Private Enterprise (CPPE), recently suggested that customs should implement a quarterly FX rate between N800/$ and N1000/$ for import duties. According to Yusuf, the continuous fluctuation in FX rates significantly impacts inflation, as businesses face heightened trade costs that are ultimately passed on to consumers. He argues that a fixed rate would help stabilize the economy by reducing these inflationary pressures.
The adjustment in the FX rate by NCS is a reflection of the broader economic conditions and ongoing efforts to streamline revenue collection. The move is part of a strategy to align import duty calculations more closely with market realities, as the naira continues to face devaluation pressures. Business leaders, however, are concerned about the potential impact on their operations and consumer prices, calling for additional government measures to mitigate these effects.
As the new rate takes effect, stakeholders across various sectors will closely monitor its implications. The government has emphasized the importance of this adjustment in fostering economic stability and transparency within the import duty regime.
