In a move reflective of the Naira’s recent strengthening against the US Dollar, the Central Bank of Nigeria (CBN) has announced a reduction in the exchange rate used for computing Customs duties at the nation’s seaports and airports. This marks the second adjustment in seven days, with the exchange rate dropping from N1,617.96/$1 to N1,593.41/$1, representing a 1.5% reduction.
Analysts attribute this decision to the Naira’s improved performance against the US Dollar at the official window over the weekend. Data from the Federal Government Single Window for Trade indicates that the exchange rate for cargo clearance at seaports on Monday stood at N1,593.41/$1, compared to the previous rate of N1,617.96/$1. This indicates a reduction of N24.55 in the Customs exchange rate.
As a result of this adjustment, importers who opened Form ‘M’ on Monday will pay less to clear their cargoes, as import duties are typically benchmarked against the US dollar. Additionally, importers opening Form ‘M’ after Monday, March 18, 2024, will benefit from the lower exchange rate, in line with the CBN’s directive to Customs to use the rate on the date of Form ‘M’ submission for calculating import duties.
The Centre for the Promotion of Private Enterprise (CPPE) had previously advocated for the CBN to fix the customs duty exchange rate at N1,000 per dollar for the remainder of the year. However, the recent reduction in the exchange rate suggests a responsive approach by the CBN to the evolving currency dynamics, aiming to support importers and facilitate trade activities amidst currency fluctuations.
Economy watchers say the adjustment in the customs duty exchange rate reflects the CBN’s commitment to maintaining stability in the foreign exchange market while addressing the needs of importers and promoting economic growth and development.
