Nigeria’s CBN Makes Surprise Move: Naira Devalued to N1,413.62 per Dollar.
Amid stakeholders’ rejection of the N1,356.883 exchange rate, the Central Bank of Nigeria (CBN) on Saturday readjusted the exchange rate on the Customs platform to N1,413.62/$1.
This review of the exchange rate came less than 24 hours after the CBN increased the exchange rate from N951.941/$1 in December to N1,356.883/$1 on Friday, February 2nd, 2023.
It could be recalled that the CBN on June 24, 2023, adjusted the exchange rate from N422.30/$1 to N589/$1 and on July 6, 2023, it was adjusted to N770.88/$1. On November 14, 2023, it was adjusted to N783.174/$1; on December 7, 2023, it was adjusted to N951.941/$1; on Friday, 2nd February, 2024, exchanged at N1,356.883/$1; while it currently changes at N1,413.62/$1.
However, maritime experts said that the increase in the exchange rate means Nigerian importers will pay more to clear their goods at the port as import duty is benchmarked against the dollar.
With the recent increase, the import duty on goods has now tripled within the seven months of the Bola Ahmed Tinubu government.
The new rate has since been reflected on the Customs trade portal. The increase was vehemently opposed by importers and Customs brokers when the apex bank first increased the Customs import duty rate by 43 percent on Friday.
“We have enough problems with the exchange rate. Now we are having an additional burden of import duty hike because it is like increasing import duty across the board maybe by another 15 percent or more; that is what it is,” the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stated.
Yusuf, a former director-general of the Lagos Chamber of Commerce and Industry (LCCI), said the increase in the exchange rate will further worsen the woes of importers.
He stressed that it will also lead to a reduction in trade as the cost of import will soar.
“The government, through her policy, is pushing more people into poverty. Nobody should blame Customs; it is the Government that should be blamed. With the rise in the exchange rate, people will not import because the way you look at it, how do you get foreign exchange to import?” President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Amiwero, stated.
He continued, “I don’t know what the government is doing about it because it is devastating. The ports are getting empty, people are not importing. People are not working, and you cannot access your goods. If you go to the market now, the price of goods has doubled, petrol and diesel have become a problem,” he lamented.
“Many people have lost their jobs, traders are closing shops. The situation is pathetic because we don’t have what it takes to sustain this suffering. The government should intervene before it results in a crisis,” he stated.
“The federal government has increased the Dollar exchange rate, from N422.30 to N589.45 then to N770.88; in November, it was moved to N783.174; in December 2023, we are at N951.941 to a dollar; now, we are at N1,356.883/$1; this is too much,” Ikemefuna Chukwu, a frontline clearing agent, stated.
He continued, “What it implies in simple terms is that, if clearing agents have a Debit Note that has not been paid on the system or Pre-Arrival Assessment Results (PAAR) or they have given you the value and you have not captured it, it has affected you directly.”
He stated that a lot of cargoes would be abandoned at the seaports because the differential was too wide for importers to bear.
“We just believe that maybe with time, we will see a lower exchange rate and it will become beneficial to the importers as well because once there is a change in the portal, there is nothing anybody can do about it. But if you have captured or accessed your work, you are good to go, and your consignment would be released for you if you don’t have any infraction.”
“Whether you have collected your value, whether you have a PAAR, if you have not done your assessment as of now, you can’t capture with that old rate. Especially for the Roll On Roll Off (RORO) or those that are doing PAAR door to door. It’s a Federal government policy. We stakeholders can’t do anything for now, but it’s the prerogative of the FG to intervene and stabilise the foreign exchange market,” he stated.
