Hike In Customs Duty Will Further Impoverish Nigerians, Says CPPE
. Urges CBN To Reverse Directive
By Fredrick Wright
The drastic upward review of the exchange rate for the computation of import duty from N952 to N1357 would have a devastating effect on businesses and further impoverish Nigerians, the Centre for the Promotion of Private Enterprises (CPPE) has said.
The Chief Executive Officer, CPPE, Dr Muda Yusuf said the latest action represents a whopping 42.5% increase.
He appealed to the Central Bank of Nigeria (CBN) to reverse this rate hike in the interest of the already impoverished segments of our society and the numerous businesses that are already on the verge of collapse.
Yusuf said: “Businesses are yet to recover from the shocks of the new round of currency devaluation resulting from the sudden unification of the exchange rate which has driven the official exchange rate to about N1400.
“It is double jeopardy for the investors across all sectors, especially those in the real sector,” he said.
Yusuf said this action will further fuel inflation as production and operating costs get escalated.
“The vulnerable segments of the population will be further impoverished as cost push inflation gets exacerbated,” he said.
“The shocks, disruptions and dislocations are of immense proportions. It is even worse that the rates take immediate effect. This is a policy action that is difficult to justify, especially in the context of the multidimensional headwinds that businesses are grappling with,” he said.
The CPPE recommended that, going forward, the determination of the exchange rate for import duty computation should be treated as a fiscal policy matter and located within the remit of the fiscal authorities which is the finance ministry. This, he said, is necessary for proper alignment with extant fiscal policies.
The CBN, earlier today (Friday) raised the Customs duty exchange rate to N1356.888 per dollar,
This is the second time in less than two months. It could be recalled that the CBN on June 24, 2023, adjusted the exchange rate from N422.30/$1 to N589/$1 and on July 6, 2023, it was adjusted to N770.88/$1, on November 14, 2023, it was adjusted to N783.174/$1, December 7, 2023, it was adjusted to N951.941/$1 and currently, it is N1,356.883/$1.
The latest duty exchange rate has since been reflected on the Customs portal.
