Customs FX Rate Rises Higher Than Official Market Rate

The official foreign currency market rate between the Naira and the USD is now lower than the exchange rate used for paying customs import charges and cargo clearance.

The naira ended yesterday at N1,278/$1 on the official market and significantly higher at N1,250/$1 on the parallel market, according to checks on the customs exchange rate webpage. However, the exchange rate for cargo clearance stayed at N1,330.36/USD.

Prior to now, the exchange rate for the assessment of customs import taxes was increased from N1,303.85/$1 to the present amount. This means that from March 31, 2024, there has been an increase of N26.52.

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Starting in mid-March, the Nigerian naira has appreciated against the U.S. dollar, reducing the foreign exchange (FX) rate used for assessing customs import duties. This rate decreased from a high of N1,612.28 on March 16 to its present value, marking a fall of N281.92 or 17.46% in just two weeks.

Throughout March, the naira experienced a significant appreciation, gaining approximately 21.8%—the most substantial increase in five years.

The recent rise in the naira’s value is largely due to the reforms by the central bank, including a notable interest rate increase of 600 basis points over two months. As a result, the Monetary Policy Rate (MPR) surged from 18.75% at the start of the year to 24.75% by March’s end.

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The central bank has been proactive in regulating the activities of Bureau De Change (BDC) operators to curb speculation, proposing increased share capital requirements of N2 billion for Tier-1 licenses and N500 million for Tier-2 licenses.

Moreover, the bank has initiated the sale of foreign exchange to BDCs at a set rate, enforcing a maximum selling price, and has revoked the licenses of over 4,000 BDC operators nationwide in a significant regulatory crackdown.