Call for Special Exchange Rate on Import Duties to Boost Economic Growth
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The President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr Lucky Amiwero, has called on the Federal Government to introduce a special exchange rate for calculating import duties. In a position letter obtained by The PUNCH on Tuesday, Amiwero emphasised that a stable and manageable exchange rate for import duties would stimulate economic growth and benefit the wider Nigerian population.
This appeal follows the Central Bank of Nigeria’s recent decision to raise the exchange rate for cargo clearance from N1,600.32 to N1,618.73, marking an increase of N18. The updated rate has already been posted on the official portal of the Nigeria Customs Service, amidst a 6.43% depreciation of the naira in July.
Amiwero expressed significant concern over the current practice of using floating exchange rates for customs duty calculations. “We wish to highlight to the Federal Government the severe challenges faced by Nigerians, particularly due to the soaring prices of goods driven by the floating exchange rate applied to import duty computations,” Amiwero stated.
He argued that the floating exchange rate has substantially contributed to rising costs of goods and escalating food prices in Nigerian markets. According to Amiwero, the use of a floating exchange rate introduces unpredictability into the process of clearing goods at ports, complicating logistics and placing a heavy financial burden on consumers.
“This issue has drastically reduced importation, disrupted transportation, and made basic foodstuffs increasingly scarce, especially for those who struggle to make ends meet and have no financial safety net,” he added.
Amiwero further explained that the liberalised foreign exchange market’s fluctuating rates had led to inconsistent and unpredictable pricing, causing an abnormal surge in the final sale prices of goods. To address these challenges, he called for measures to eliminate the uncertainties and inconsistencies associated with the current exchange rate system, stressing the importance of stabilising the domestic trading environment to provide a more predictable framework for importers.
An importer, Mr Basil Nwaolisa, echoed these concerns, stating that the cost of clearing a container at the port had increased significantly. “Now, to clear a 40ft container of goods, depending on the item, it costs at least N16m and above. This was far below the amount we used to clear the same consignment before,” he said.
The NCMDLCA’s plea highlights the urgent need for government intervention to address the exchange rate challenges, aiming to ensure more affordable goods for consumers and a healthier economic environment for businesses.
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