The Centre for the Promotion of Private Enterprise (CPPE) has said the high exchange rate for import duty assessment is fuelling increased production and operating costs for manufacturers, other businesses and generally worsening the cost-of-living crisis. The Centre, therefore, appealed to the Central Bank of Nigeria (CBN) to peg the Customs duty exchange rate at N1,000/$ for the rest of the year in line with the federal government’s commitment to ease the current hardship on the citizens and businesses.
The Chief Executive Officer of the centre, Dr Muda Yusuf, in a statement, lauded the decision of the CBN to approve the use of the exchange rate reflected on the import documentation (Form M) at the onset of import transaction, noting that it would reduce the current uncertainty around imports and related transactions in the economy.
Yusuf, however, said the CBN’s intervention did not address the bigger and the more troubling issue of the current prohibitive cost of cargo clearance at the ports which had risen by over 40% in the last two months.
He said there was also the added risk of cargo diversion to neighbouring countries and heightened smuggling which could jeopardize the realization of Customs revenue target.
“The current Customs duty exchange rate of N1,488.9/1$ is still too high in the context of the current galloping inflation and difficulties facing businesses and the citizens.
“ Instances of abandoned cargo is on the increase as a consequence of escalating trade cost.”
He lamented that these were not good outcomes for an economy seeking to ensure recovery, drive growth, promote inclusion and guarantee social stability.
“Businesses are currently grappling with multiple macroeconomic and structural headwinds which are negatively impacting profitability, competitiveness, job creation, retention of existing jobs and business sustainability.”
He said pegging the customs duty exchange rate resonates with the present intervention measures to mitigate the current hardships in the country, adding that besides, this proposition does not in any way detract from the economic reform agenda of the present administration.
“ If anything, it would complement the economic transformation measures because of the expected positive impact on competitiveness, productivity, cost reduction, deceleration of inflation and employment generation.”
High Customs duty, FX scarcity crippling manufacturers –CPPE
