WHEN IMPORT DUTY FX EXCEEDS THE OFFICIAL MARKET RATE, OPERATORS RAISE DUST.

As the official foreign exchange market rates of the US dollar and the naira increased in accordance to the Customs exchange rate on Wednesday, clearance agents at the nation's seaports created dust.

On Wednesday, the official market saw the naira close at N1,262.85/$1, but the parallel market saw a substantially higher closing price of N1,250/$1. The Nigerian Trade Blurb webpage states that the current customs exchange rate for clearing cargo is N1,330.36/USD.

The exchange rate used to calculate customs import taxes was N1,303.85 to $1 before this hike. This suggests that as of March 31, 2024, there has been an increase of N26.52.

In a recent exclusive interview, Dr. Kayode Farinto, the immediate past acting president of the Association of Nigerian Licenced Customs Agents (ANLCA), said that fluctuations in exchange rates had no positive impact on the economy's import/export industry.

According to Farinto, he suggested that the Central Bank of Nigeria (CBN) implement an expected exchange rate on a quarterly basis.

In order to prevent any changes on the Customs platform when the dollar appreciates or depreciates, I have provided technical advise that we should have a projected foreign currency rate for Customs reasons. Because of this, even if the curent volatility is bad for our economy, a precise Customs FX rate will be implemented for the upcoming quarter because our current setup does not meet World Bank regulations.

We wouldn't have to worry about fluctuations if we had a forecast exchange rate; instead, importers would only have to be concerned about quarterly rates. The current exchange rate is neither professional nor technological. According to Farinto, the only exchange rate that can benefit the local economy and help importers plan the evacuation of their goods is a predictive one.

Ikechukwu Anaba, a frontline clearing agent, also spoke, claiming that the CBN was more interested with earning revenue for the government than with enabling trade.

However, he questioned how the government normally managed to stimulate the economy, stating that this would not result in economic growth.

“Revenue is the CBN's exclusive priority. As you might expect, the customs exchange rate rises as the dollar falls. Anaba asked, ”Where is CBN's sincerity？

“The customs exchange rate up until now is not comparable to the official rate,” he told reporters. Customs forex is typically 10% to 20% less than official FX, but customs exchange rates are currently higher, he noted.

Meanwhile, the Nigeria Customs Department (NCS) observed that the CBN currency rate regime's fluctuations posed major challenges to the department.

At a news conference held in Abuja on Wednesday, Comptroller General of Customs Bashir Adewale Adeniyi stated that thirteen different spot rates were in place in March.

Adeniyi claims that these unstable rates have had an impact on activity, disrupting it and alerting stakeholders to potential dangers.

Adeniyi claims that in the most recent quarter, the CBN set 28 rates, the highest of which was NGN 1,662.35 per USD 1 in February 2024 and the lowest of which was NGN 951.94 per USD 1 in January 2024. February saw fifteen different spot rates, ranging from NGN 951.94 to NGN 1,662.35 per USD 1, as opposed to January's single exchange rate of NGN 951.94 for every USD 1.

In March, thirteen different spot prices were implemented, with the range being NGN 1,303.84 to NGN 1,630.16. Owing to these fluctuations, NGN 1,314.03 was the average applicable exchange rate for each USD 1 during the quarter's customs goods clearance.

“The consequences of these erratic rates have affected and disrupted activities, sending unsettling signals to our stakeholders.”

To lessen the potential impact of exchange rate changes on import activities, Adeniyi said that the Service has been in constant contact with the apex bank and expressed gratitude for the recent relative quiet. The backing of Minister of Finance Wale Edun has made these conversations easier.