Presidential Candidate of Labour Party in the 2023 elections, Peter Obi, has said the Federal Government’s inconsistency in custom duty charges is hampering business growth.
Daily Trust reports that the government has reviewed the Nigeria Customs Service exchange rate for importation of goods for at least nine times since President Bola Tinubu took power.
The exchange rate for Duty collection is usually determined by the Central Bank of Nigeria (CBN).
The first increase was in June 2023 when it was adjusted from N422.30 per dollar to N589 per dollar. As importers were trying to adjust, the apex bank moved it to N770.88 per $1 in July.
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On November 14, 2023, the CBN slammed another adjustment on exchange rate, rising from N770.88/$1 to N783.174/$1.
In December 2023, another adjustment was implemented as the exchange rate rose from N783.174/$1 to N951.941/$1 and on February 2, 2024, the CBN implemented the fifth increment, rising from N951.941/$1 to N1,356.883/$1
In January, it moved from N952/$ to N1356/$ and later to N1,413/$ before it went to N1,444/$ and subsequently N1,515 before finally getting to N1.605.
Reacting to the development in a series of posts on his X handle, Wednesday morning, Obi said, “I wish to urgently call on the Federal Government of Nigeria to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country. The federal government should stop the arbitrary and ever-increasing customs duties as it is now negatively impacting businesses and the cost of items, and this portends a huge danger to the economy.
“A situation where at the point of initiating importation, Form M and other documents related to importation are based on a particular rate of exchange. For example, N1000 to $1, being the prevailing exchange rate at the time which the importer of goods was used to calculate the entire process, from the import initiation to receipt of goods in his warehouse.
“Then suddenly when the goods arrive in Nigeria, and duties are calculated at different rates, say N1400 to $1, it becomes a serious business challenge that results in business losses. Worse still, it directly fuels the inflationary spike which is the basis of increasing cost of goods and living,” Obi said.
He said such arbitrary charges will obviously lead to further closure of businesses, and attendant job loss.
He said, “This is because at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate, and the prevailing market prices. If this situation is not corrected, our importers may resort to using ports of nearby countries, a situation that will leave our ports under-productive, and further deepen our economy into a worse situation as a result of loss of revenue.”
The former Anambra State governor said government should also show consistency in its policies as this will help with economic forecasting and business planning.
He lamented that businesses were dying and manufacturers were shutting down because of the poor and inconsistent economic policies of the government.
“All efforts of the government should be directed at supporting businesses, especially those in the manufacturing sector, to keep their businesses afloat and keep the economy growing, as the small business sector remains the most critical engine of economic growth.
“We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living,” Obi said.
The forex crisis had created panic among freight forwarders, particularly among members of the Manufacturers Association of Nigeria (MAN), who are major importers.
