The Centre for Promotion of Public Enterprise, (CPPE) has asked the Central Bank of Nigeria (CBN) to adopt a specific quarterly exchange rate for import duty collection as a measure towards addressing the problems associated with frequent changes in customs exchange rate and general volatility of the foreign exchange market.
In a statement signed by its Chief Executive Officer, Dr. Muda Yusuf, the center lamented the effects of irregular changes in the customs duties exchange rate, stating that it is inimical to production and planning, worsening the inflation rate and increasing investment risks.
The statement further traced the changes in the first quarter of the year and April where the exchange rate was changed 28 times and 10 times respectively, noting that it compounds international trade uncertainties for Nigerian businesses which does not augur well for the growth targets of the country.
It stated, “The Centre for the Promotion of Private Enterprise [CPPE] appeals to the CBN to adopt a framework to minimize volatility in the customs duty exchange rate in line with the commitment of the present administration to bolster investors’ confidence and drive economic growth.”
“Such framework should adopt a quarterly customs duty exchange rate, after due consultation with the fiscal authorities. We propose a commencement rate of N1000/$ customs duty exchange rate. Consultation with the fiscal authorities is imperative because of the trade policy implications of such decisions.”
The CBN, through the Nigeria Customs Service, regularly fixes the exchange rate for duties collection in line with the changes in the official rate on the NAFEM window. However, the members of the public and stakeholders in the trade sector are complaining about the effects of the regular changes on business and planning.
Owing to that, the CBN stated that the exchange rate on the date of opening the form M for importation will be used for import duties assessment irrespective of when the goods are cleared.