The Central Bank of Nigeria, CBN, has approved an increase in the import duty rate by 43 percent.
Recall that the Customs duty collection exchange rate is typically determined by the Central Bank of Nigeria (CBN). Importers and trading stakeholders were surprised on Friday to discover a surge in the exchange rate, which had previously been set at N951.842 per $1 as of December 2024 but was now increased to N1356.42.
In response to this development, Dr. Muda Yusuf, the Chief Executive Officer of the Center for the Promotion of Private Enterprises (CPPE), expressed astonishment, emphasizing that the escalation would exacerbate the already challenging economic conditions.
Yusuf questioned whether the Governor of the CBN had received advice on the potential implications of these actions.
He remarked, “I am taken aback by this development. Considering the existing economic hardships and costs, especially following the recent unification of the exchange rate, this additional increase in duty is concerning.
The repercussions of this increment will extend across various aspects of our economic landscape. Last year, we already observed a decline in import volume, and with this added increment, one can only imagine the further impact.”
Yusuf continued, “The substantial depreciation and the rise in import duty will undoubtedly influence trade volume, as the cost of imports is set to rise significantly. This, in turn, will affect virtually all major cost components.”
“This entails increased expenses in transportation, shipment, and clearing costs, leading to a deceleration in the pace of activities within the maritime sector.
The sector’s tempo has already experienced a decline, and this additional cost burden is poised to further diminish its operational momentum.”
He cautioned against any potential increase in the exchange rate used for calculating import duty, emphasizing that such a move would have dire consequences for both the economy and the citizens.
Similarly, former Executive Secretary of the Nigerian Shippers Council, Mr. Hassan Bello, highlighted the broad impact of the exchange rate’s velocity on every sector of the economy.
He emphasized the necessity for the country to focus on exporting more than importing, stating, “With the ongoing depreciation of the Naira against the Dollar, our importation will inevitably decrease.”