In a recent development, Mr. Lucky Amiwero, the President of the National Council of Managing Directors of Licensed Customs Agents, has called on the Federal Government to introduce a unique exchange rate for the calculation of import duties.
Amiwero emphasized in a formal communication obtained by NewsNow on Tuesday the necessity of a consistent and manageable exchange rate for import duties to drive economic growth and positively impact the larger Nigerian populace.
This call comes shortly after the Central Bank of Nigeria adjusted the exchange rate for cargo clearance from N1,600.32 to N1,618.73, marking an increase of N18.
The revised rate has already been published on the official Nigeria Customs Service portal.
This adjustment coincides with a 6.43% depreciation of the naira in July.
Amiwero expressed deep reservations about the current practice of employing floating exchange rates for customs duty computations.
He communicated concerns to the Federal Government regarding the detrimental impact of the fluctuating exchange rates on Nigerian citizens, particularly with the sharp rise in commodity prices due to import duty calculations being based on such rates,” Amiwero remarked.
He argued that this method significantly contributed to the escalating costs of goods and the surge in food prices in local markets.
According to Amiwero, utilizing a floating exchange rate introduces uncertainty during the goods clearance process at ports, creating logistical challenges and imposing financial strains on consumers.
“This volatility has caused a decline in imports, disruption in supply chains, and a scarcity of essential food items, especially impacting those on tight budgets with no financial cushion,” he added.
The head of NCMDLCA further elaborated that the fluctuating rates in the liberalized foreign exchange market had led to inconsistent and unpredictable pricing, triggering abnormal price hikes for goods.
To combat these issues, Amiwero urged for steps to eliminate the uncertainties and inconsistencies associated with the current exchange rate mechanism.
He underscored the need to stabilize the domestic trading environment to create a predictable framework for importers.
Reflecting on the practical impact, importer Mr. Basil Nwaolisa highlighted a significant rise in the cost of clearing a container at the port.
“Currently, the clearance cost for a 40ft container varies greatly based on the contents, costing a minimum of N16 million. This starkly contrasts with previous costs for similar consignments,” he remarked.