Relief to Importers As CBN Slashes Customs FX Duty Rate by 5.3%

The Central Bank of Nigeria (CBN) has announced a further reduction in the exchange rate used to calculate customs duties at Nigerian seaports. This move, implemented on March 4th, 2024, aims to address concerns over high import costs and fluctuating exchange rates impacting businesses.

The new rate, N1,544.081 per dollar, represents a 5.3% decrease from the previous rate of N1,630.159 per dollar. This translates to a reduction of N86.078 per dollar for businesses clearing goods at the port.

Industry analyst Tony Anakebe welcomed the decision, emphasizing the need for stable exchange rates for calculating customs duties. He highlighted the negative impact of high tariffs and fluctuating rates on businesses, contributing to a slowdown in port activity.

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Addressing concerns raised by importers, the CBN reportedly issued a directive last week instructing Customs to use the exchange rate prevailing on the date of submitting Form M (a document used for import clearance) for calculating duties. This move ensures a fairer and more predictable cost structure for importers.

The reduction in the customs FX rate offers temporary relief to businesses by lowering import duty costs. However, industry experts like Anakebe believe long-term solutions are needed to achieve sustainable economic growth and stable business environments. These solutions could involve further measures to stabilize the naira exchange rate and streamline import processes to improve efficiency at Nigerian ports.