The Central Bank of Nigeria (CBN) has raised the import duty rate to ₦1,618.73 per USD, leading to additional challenges for importers due to increased costs and inflationary pressures. Despite the CBN’s efforts to stabilize the naira through various foreign exchange sales, market challenges persist.

The Nigeria trade hub reported an ₦18 rise in the exchange rate to the USD, reaching ₦1,618.732 from the previous rate of ₦1,600.32. This depreciation of the naira occurred despite the CBN’s interventions to address liquidity issues in the official market through dollar sales. In July, the CBN conducted multiple FX sales to authorized dealers and Bureau de Change (BDC) operators in response to significant pressure on the naira.

Clearing agent Oladimeji Majekodunmi expressed concerns about the substantial increase in the cost of clearing containers at ports due to the exchange rate hike. “The moment CBN increases, Customs don’t have a choice than to adjust the new duty in their system. Now to clear a 40ft container of food items, it costs nothing less than N20 million and above. This was far below the amount we used to clear the same consignment before. You know how many times CBN has increased the rate in the last few months. The cargo throughput into the country has dropped significantly to about 30 percent. Come to the port now, you will see how empty and dry the whole place is,” Majekodunmi said.

Some agents are struggling to afford transportation to the port, let alone provide for their families. Many importers have faced bankruptcy, leading to a highly unstable situation. Majekodunmi highlighted the necessity for the Central Bank to establish a stable exchange rate for importers, noting that fluctuations in the exchange rate are detrimental to the economy.

Lucky Amiwero, National President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), called on the federal government, through the CBN, to introduce a special exchange rate for the calculation of import duties. Amiwero stressed that a consistent and manageable exchange rate for import duties would foster economic development and positively impact the wider Nigerian populace.

He voiced serious apprehension regarding the current reliance on floating exchange rates for customs duty assessments. “We wish to highlight to the federal government the severe challenges faced by Nigerians, particularly due to the soaring prices of goods driven by the floating exchange rate applied to import duty computations. This issue has drastically reduced importation, disrupted transportation, and made basic foodstuffs increasingly scarce, especially for those who struggle to make ends meet and have no financial safety net,” Amiwero added.

Amiwero pointed out that the use of a floating exchange rate creates uncertainty in the process of clearing goods at ports, complicating logistics, and imposing a substantial financial strain on consumers. He emphasized the necessity of stabilizing the domestic trading landscape to create a more reliable framework for importers, advocating for initiatives aimed at removing the uncertainties and inconsistencies linked to the existing exchange rate system.