Stakeholders in the maritime industry have decried the new
Customs duty exchange rates, labeling it as oppressive and anti-people
The stakeholders who spoke with The Nation in separate interviews condemned the hike in import duty
by the Nigeria Customs Service (NCS), saying it will lead to higher inflation
and further weaken the purchasing powers of Nigeria’s impoverished masses.
They emphasised the need to consider economic implications
before implementing fiscal and monetary policies, aligning with the Renewed
Hope Mantra of President Bola Tinubu’s administration.
The Federal Government had a few days ago, through the
Central Bank of Nigeria (CBN) increased the exchange rate for cargo clearance
from N952 to N1,356 per dollar. This effectively translates to a spike in
payable import duty.
The latest hike is coming weeks after the rate was increased
from N783 to N952 per dollar.
It was in November last year
that the exchange rate for cargo clearance was raised from N757 per
dollar to N783 per dollar, representing a 3.4 per cent increase, and was later
raised from N783/$ to N952/$ in December.
The Centre for the Promotion of Private Enterprise (CPPE)
also expressed grave concerns over the significant upward revision of the
exchange rate for import duty computation.
The CPPE's CEO, Muda
Yussuf said the adjustment, soaring from N952 to N1,357, marks a staggering
42.5 per cent increase, a move, he said, that could have profound implications
for businesses across all sectors.
Yusuf lamented that the timing of the import duty rate hike,
amid the economic challenges, amplifies the difficulties faced by investors,
particularly those in the real sector.
He warned that the consequences of this action could
exacerbate inflation as production and operating costs escalate.
Yusuf lamented that the ripple effect on the vulnerable
segments of the population may further plunge them into poverty, aggravating
cost-push inflation.
Yusuf called for a reconsideration of the rate hike by the
CBN, emphasising the potential collapse of numerous businesses already
teetering on the brink.
Yusuf said he found the policy difficult to justify,
especially in the context of the multifaceted challenges businesses currently
face.
He said: “The drastic upward review of the exchange rate for
the computation of import duty from N952 to N1357 would have a devastating
effect on businesses across all sectors. This is a whopping 42.5 per cent
increase. This is like the last straw.
“Businesses are yet to recover from the shocks of the new
round of currency devaluation resulting from the sudden unification of the
exchange rate which has driven the official exchange rate to about N1400.
“It is double jeopardy for the investors across all sectors
especially those in the real sector.
This action will further fuel inflation as production and operating
costs get escalated. The vulnerable
segments of the population will be further impoverished as cost push inflation
gets exacerbated.
“CPPE appeals to the CBN to reverse this rate hike in the
interest of the already impoverished segments of our society and the numerous
businesses that are already on the verge of collapse.”
The former President, Association of Nigerian Licensed
Customs Agents (ANLCA), Prince Olayieola Shitti said the increase is bad
because it will translate to more money for the Federal Government but more
difficulty for Nigerians.
He said: “In layman terms, it simply puts more money into the
coffers of Customs and creates an increase in inflationary rate. It is a bad
omen for the importers, clearing agents, port users, stakeholders, operators
and maritime business.
“As we speak with you, many importers and their clearing
agents have several containers and goods to clear from the port that are still
there because of the sudden increment.
"Many of us just woke up to this unpalatable rate and up
till now, we have not been able to pay because the duty payable just
sky-rocketed. So, it has become a big problem for clearing agents and the
importers.”
An importer, Gbolahan Adegboyega argued that the new Customs
duty regime would further fuel smuggling and the diversion of cargoes meant for
the Nigerian market to the ports of neighbouring countries.
“Some cargoes have been trapped at the port and I don’t see
how they are going to break even because of the amount they have to pay on them
as duty. No importer can break even with this new exchange rate,” he said.
A maritime lawyer, Muhammed Oluwaseyi faulted Customs
officials for arbitrary allocation of values to imported items.
According to him: “Nobody is in charge of the ports, nobody
is listening to each other, everyone is on their own. If one has a problem with
Customs, whom do you go to? The Comptroller-General of Customs is there but he
is there in Abuja.”
Oluwaseyi said the import duty hike will not only fuel
inflation but accelerate the smuggling of goods across Nigeria’s frontiers.
Findings have shown that the recent hike in Customs duty
exchange rate has been met with overwhelming outcry by the stakeholders who
spoke with our correspondent.
The Federal Government had on Friday, through the Central
Bank of Nigeria raised the exchange rate for cargo clearance from N952/$ to
N1.356 per dollar. This effectively translates to a spike in payable import
duty.
Also, a freight forwarder, Eugene Nweke, expressed
reservations about the potential ramifications of the move by the CBN on the
nation’s economy.
He highlighted global concerns discussed at the World
Economic Forum (WEF) where the drop in global trade volumes during the 2022/2023
period took center stage.
Nweke emphasised the need to consider economic implications
before implementing fiscal and monetary policies.
He argued that neglecting these concerns demonstrated poor
administrative sensitivity, calling for a systemic reevaluation of monetary
policy tools to ensure fair market practices.
Nweke also raised questions about the CBN’s role in duty
exchange rate increments, speculating that it might be a deliberate strategy
for revenue generation.
He argued that the
Coordinating Minister should conduct an unbiased system study within the
nation’s international trading climate to provide recommendations for policy
reform.
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