Rédaction Africa Links 24 with Ayodeji Adegboyega
Published on 2024-02-23 21:53:21
The Central Bank of Nigeria (CBN) recently addressed concerns about inconsistent import duty assessment levies by issuing a directive to the Nigeria Customs Service. The directive advised the Customs Service to use the closing foreign exchange rate from the official window for import duty calculations. This move comes in response to the challenges faced by importers due to uncertainties in pricing caused by the recent liberalization of the forex market.
Importers in Nigeria have been grappling with irregular changes in import duty rates by the Nigeria Customs Service, which have disrupted pricing and overall business operations. As a result, Peter Obi, the presidential candidate of the Labour Party in the 2023 elections, urged the federal government to urgently address the impact of inconsistent duties on businesses in the country.
To provide clarity and reduce business uncertainty, the CBN issued a circular signed by Hassan Mahmud, the director of the trade and exchange department. The circular advised using the closing FX rate on the date of opening Form M for imports as the rate for duty assessment. This rate would remain valid until the completion of the importation and clearance process, allowing importers and Customs Service to plan effectively and reduce uncertainties.
Effective from February 26, the directive supersedes previous requirements outlined in a 2018 directive from the CBN. The decision aims to provide importers and the Customs Service with a clear framework for determining import duty, thereby reducing uncertainties in revenue and cost structures. Despite initial market volatility following forex market reforms, the CBN expressed confidence that the reforms will bring stability in the medium term.
In recent weeks, the CBN has implemented various measures to address liquidity issues in the market and curb speculation. The Nigerian government also blocked access to platforms like Binance and other crypto exchanges to prevent speculative activities that could weaken the local currency.
Overall, the CBN’s directive on import duty calculations aims to streamline the process, provide clarity, and reduce uncertainties for businesses in Nigeria. By using the closing FX rate for duty assessment, importers and the Customs Service can plan effectively and mitigate the impact of fluctuating exchange rates on their revenue and cost structures. This move aligns with the CBN’s efforts to stabilize the forex market and promote a conducive business environment in the country.
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