CPPE Urges CBN to Peg Customs Duty Exchange Rate at N1,000/$1

February 26, 2024
CPPE Muda Yusuf Customs Duty Exchange Rate

By Adedapo Adesanya

The Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to peg the customs duty exchange rate at N1,000 per Dollar for the rest of the year in line with the federal government’s commitment to ease economic hardship on the citizens.

In a statement signed by Mr Muda Yusuf, director of CPPE, on Sunday, the group said the current customs duty exchange rate, which is around N1,500/$1, is too high in the context of the current inflation and difficulties facing businesses and citizens.

The CPPE said it welcomes the decision of the CBN to approve the use of the exchange rate reflected on the import documentation (Form M) at the onset of import transactions.

This, it said, was a laudable response to the grievances of investors in the economy.

“This would reduce the current uncertainty around imports and related transactions in the economy,” the think tank said.

The group said the CBN intervention did not address the bigger and more troubling issue of the current prohibitive cost of cargo clearance at the ports which had risen by over 40 per cent in the last two months.

“The high exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis and putting thousands of maritime sector jobs at risk.

“There is also the added risk of cargo diversion to neighbouring countries and heightened smuggling which could jeopardize the realization of customs revenue targets.

“In light of this, the CPPE strongly appeals to the CBN to peg the customs duty exchange rate at N1,000/$ for the rest of the year in line with the federal government’s commitment to ease the current hardships on the citizens and the burden on businesses,” Mr Yusuf said, according to the statement.

Mr Yusuf explained that the instances of abandoned cargo are on the increase as a consequence of escalating trade costs.

“These are not good outcomes for an economy seeking to ensure recovery, drive growth, promote inclusion and guarantee social stability.

“Businesses are currently grappling with multiple macroeconomic and structural headwinds which are negatively impacting profitability, competitiveness, job creation, retention of existing jobs and business sustainability,” he said.

He said pegging the customs duty exchange rate resonates with the present intervention measures to mitigate the current hardships in the country. Besides, Mr Yusuf said, this proposition does not in any way detract from the economic reform agenda of the present administration.

“If anything, it would complement the economic transformation measures because of the expected positive impact on competitiveness, productivity, cost reduction, deceleration of inflation and employment generation,” he added.

The CBN had on Friday pegged the rate with the closing value attached to Form M.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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