Peter Obi reacts to CBN’s 9% increase in customs exchange rate.
Just days after reducing the exchange rate for Customs cargo clearance, the Central Bank of Nigeria (CBN) has increased it by nine percent, from N1,515.48 to N1,605.82 per dollar. This inconsistency has drawn criticism from Peter Obi, the Labour Party’s presidential candidate in the 2023 election. Obi urges the government to address these fluctuations, which negatively impact the business environment. The new rate, already reflected on the Nigeria Customs Service (NCS) portal, has further frustrated importers.
CBN made several adjustments to the exchange rate
NAIJAEYES reported that the CBN made several adjustments to the exchange rate throughout the past year. On June 24, 2023, the rate was adjusted to N589/$, followed by another adjustment to N770.88/$ on July 6, 2023. Subsequent adjustments occurred on November 14, 2023 (N783.174/$), December 2023 (N951.941/$), February 2, 2024 (N1,356.883/$), and February 3, 2024 (N1,413.62/$). Further changes were made on February 10, 2024 (N1,417.635/$), February 11, 2024 (N1,444.56/$), and February 14, 2024 (N1,481.482/$). The rate was reduced to N1,472.756/$ on February 16, 2024, and increased again to N1,605.82/$ on February 21, 2024.
Our Correspondent also reports that the incessant increases have impacted negatively on the trade volume at the Nigerian ports as some importers have abandoned their goods at the ports while others have opted for ports in the neighboring countries.
Obi urged the Federal Government of Nigeria to cease the inconsistent duty charges.
However, in response to the situation, Obi, a businessman and politician, stated in a message on his verified X handle (formerly Twitter) @PeterObi, that prioritizing high Customs revenues over the survival of local businesses, employment, and reasonable cost of living would harm the nation’s economy.
Obi urged the Federal Government of Nigeria to cease the inconsistent duty charges, emphasizing that they were negatively affecting businesses and the cost of goods in the local market.
He emphasized, “The arbitrary and ever-increasing Customs duties are now detrimental to businesses and the cost of goods, posing a significant threat to the economy. The federal government must take urgent action to address this issue.”
This inconsistency leads to losses and contributes to inflation
In a scenario where importers start the importation process based on a specific exchange rate, such as N1000 to $1, and later find out upon arrival of goods in Nigeria that duties are calculated at a different rate, say N1400 to $1, it poses significant challenges for businesses. This inconsistency leads to losses and contributes to inflation, resulting in higher costs of goods and living. Consequently, it may lead to business closures and job losses as calculations were initially based on the prevailing exchange rate and market prices.
If not addressed, importers may opt to use ports in neighboring countries, which would reduce productivity in our ports and worsen the economy due to revenue loss.
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