The foreign exchange rate for import duties collection by the Nigeria Customs Service (NCS) has stayed at N1474/$ in the last three weeks consecutively- the longest duration since January.
This is as the naira stabilises around N1450/$ to N1490 to the USD in the past few weeks following months of volatility since February 2024.
Checks on the customs exchange rate portal reveal that the FX rate for import duties collection has been adjusted only once this month- a decrease from N1482$ to the current figure.
The FX rate at the beginning of the month stood at N1476.12 to the USD while as of June 21, 2024, was N1485.53/$.
Frequent changes in the Customs duties FX rate
The stability of the customs exchange rate for duties collection resonates with calls by players in the business community and policymakers on the need to have a stable customs FX rate to help in planning and projection.
Since February this year, the customs exchange rate has been adjusted like the official market rate. The Comptroller-General of the Nigeria Customs Service, (NCS), Adewale Adeniyi has stated that the service does not fix the exchange rate but adopts the exchange rate set by the Central Bank of Nigeria (CBN).
In the first quarter of the year, the Nigeria Customs Service (NCS), implemented 28 different exchange rates for duties collection. In January, the Customs Service had a single FX rate, but this increased to 15 in February and around 12 in the month of March.
To mitigate the regular effects of the regular changes of the customs duties rates on businesses, the CBN issued a circular asking the Customs Service to use the FX closing rate on the date of ‘Form M’ submission by importers for the clearance of goods and import duty assessment.
This measure aims to address the volatility and frequent updates on the customs website related to the liberalization of the foreign exchange market.
N800/$ recommendation
The Centre for Promotion of Public Enterprise (CPPE) had earlier urged the Central Bank of Nigeria (CBN) to implement a fixed quarterly exchange rate for import duty collection.
According to them, it aims to mitigate issues arising from frequent changes in the customs exchange rate and the overall volatility of the foreign exchange market.
Furthermore, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele had recommended to the Presidency that the customs exchange rate be pegged at N800/$- the same benchmark exchange rate in the 2024 appropriation bill.
