The exchange rate for the Nigeria Customs Service (NCS) duties collection has risen from N1,520/$ to the current figure of N1,558 to the USD.
This represents an increase of N38 from the previous rate and higher than the NAFEM closing rate of N1554.65/$ according to data from the FMDQ.
However, the naira had earlier in the week crashed to N1561 to the USD on the official market. While the naira has been depreciating against the dollar over the past three days, FX turnover has consistently increased during the same period.
On Wednesday, FX turnover in the official market surged by 25.78%, reaching $236.7 million, up from $188.19 million the previous day.
The most significant surge occurred on Tuesday, with an increase of 41.01%, while Monday saw a 14.19% rise. Overall, FX turnover has increased by 77.36% from Monday to Friday this week.
The Central Bank of Nigeria (CBN) which fixed the customs duties rate had earlier dropped the exchange rate from N1549/$ to N1520/$ before the current increase. In the month of July, the exchange rate for duties collection has risen by 5.9% from N1470/$ to the current rate.
This reflects the recent weakness in the naira despite the increase in the country’s foreign reserves. A recent review by Nairametrics reveals that the country’s external reserve has risen to $35.05 billion.
The foreign reserves have reached their highest level since May 30, 2023, when they stood at $35.09 billion, approximately 14 days before the introduction of the foreign exchange (FX) unification policy in June 2023. This marks the first time they have surpassed the $35 billion threshold under the administration of Bola Tinubu.
Complaints of trade organisations over high customs duties rate
The increase in the exchange rate for duties collection above the official market rate will further disappoint stakeholders in the business community who have consistently called for a drop in the exchange rate for duties collection.
The Centre for the Promotion of Public Enterprise (CPPE), the Manufacturers Association of Nigeria (MAN) and NACCIMA have consistently called for stability in the FX rate for duties collection.
The CPPE in particular has advised the CBN to adopt a quarterly FX rate for duties collection. These trade organisations have complained that the high exchange rate for import duties collection stifles business activities and contributes to the high cost of imports which transfers into the cost of goods in the market.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele had earlier stated that the committee had recommended a customs duties exchange rate of N800/$- the same rate in the 2024 Nigeria budget. However, that is yet to be implemented as the committee’s proposals are being rolled out.