Lagos, Aug. 18, 2024 – The Centre for the Promotion of Private Enterprise [CPPE] has appealed to the presidency to peg the customs duty exchange rate at N1000/$ for the next six months in the first instance through an Executive Order.
The CPPE, a private think tank in Lagos, gave the advice in statement in Lagos on Sunday.
Muda Yusuf, its Chief Executive, said the current high inflation rate in the country could be brough down by lower the customs duty exchange rates.
The CPPE said it was worried that the problem of the prohibitive and unpredictable exchange rate for cargo clearance was yet to be addressed by government.
He said: “We believe it is a major policy adjustment that needs to happen to complement current measures to address the current cost-of-living crises in the country.
“The high and volatile exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis, putting maritime sector jobs and investments at risk and weakening investors’ confidence.
“There is also the added heightened risk of cargo diversion to neighboring countries and smuggling which could jeopardize the realization of customs revenue target.
“This situation additionally creates serious competitiveness challenges for ethical and compliant investors in the economy because of their relatively elevated production and operating costs.
“It gratifying that the Presidential Committee on Fiscal Policy and Tax Reforms had made similar recommendation. The Organized private Sector [OPS] had also strongly advocated in the same vein.
“The current customs duty exchange rate on the Nigeria Customs Service portal is N1578/$. This rate has been changing almost weekly, which is not good for the investment environment.
“It is important to clarify that this proposition is without prejudice to the ongoing foreign exchange reforms of the present administration. Contrary to concerns expressed in some quarters, the adoption of lower exchange rate for computation of customs duty would not undermine the current foreign exchange reforms. It is not a request for a concessionary exchange rate for forex allocation.
“We are dealing with two separate issues here. One is about foreign exchange policy, the other is purely a trade policy matter. The responsibility of the CBN should end at the point of opening of Form M for importers within the context of extant foreign exchange policy.
“All other matters relating to international trade should be within the remit of the Federal Ministry of Finance and the Federal Ministry of Trade and Investment.” (GBN)
