Worries as CBN raises Customs duty exchange rate to N1, 356.883/$

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•Re-jigs Cash Reserve Requirement Framework
Nigerians are in for more economic hardship induced by inflation as the Central Bank of Nigeria (CBN) has increased the Nigeria Customs Service (NCS) exchange rate for clearance of imported goods to N1,356.883 per 1$.

Information obtained by The Guardian from the Customs official website yesterday morning indicated that the exchange rate was adjusted from N951.941/$ in December 2023 to N1,356.883/$ February 2024.

This adjustment is the fourth after the Service started the implementation of the floating foreign exchange rate regime by the CBN in July 2023 and since the coming into power of the new government.

The CBN had on June 24, 2023, adjusted the exchange rate from N422.30/$1 to N589/$1 and subsequently to N770.88/$1 on July 6, 2023.

The apex bank further adjusted the rate on November 14, 2023 to N783.174/$1; on December 7, 2023, to N951.941/$1; and currently to N1,356.883/$1.

Importers and the business community have decried the implications of the new adjustment on the prices of imported goods.

This is aside from the extortion manufacturers and importers face in the evacuation of their cargoes from the ports to their warehouses and companies as well as the increasing multiple taxes from government agencies.

Recall that the Comptroller General of Customs, Bashir Adewale Adeniyi, had earlier this year told importers and the business community that the NCS does not independently fix its exchange rate for imported goods clearance, but only updates its system based on what is on the apex bank’s official window.

He had explained that the customs service was not responsible for the arbitrary increase or decrease of the exchange rate, but rather complies with the exchange rate on the official CBN window for clearing of imported goods.

A licensed Customs agent, Tony Anakebe, decried the high FX rates of naira against the dollar and the exchange rate for clearing imports, noting that it has resulted in a decline in the volume of imports.

A frontline Customs Broker, Michael Ovien, confirmed that the CBN effected the increased exchange rate on the trader portal for single window trade yesterday, noting that the latest increment would increase the cost of importation, while the cost of goods and services in the market would increase astronomically leading to high inflation rate.

Another clearing agent, Chukwu Ikemefuna, said importers would pay more for cargo clearance at the various seaports, while a lot of cargoes would be abandoned at the ports because the differential would be too wide for importers to bear.

“What it implies in simple terms is that, if clearing agents have a Debit Note that has not been paid on the system or Pre-Arrival Assessment Results (PAAR) or they have given you the value and you have not captured, it has affected you directly.

“Whether you have collected your value or have a PAAR, if you have not done your assessment as of now, you can’t capture it with that old rate. Especially for the Roll On Roll Off (RORO) or those that are doing PAAR door to door. It’s a Federal Government policy. We stakeholders can’t do anything for now; but it’s the prerogative of the government to intervene and stabilise the foreign exchange market,” he stated.

Meanwhile, the CBN is migrating from daily Cash Reserve Requirement (CRR) debits to an updated CRR mechanism that is intended to facilitate banks capacity for planning, monitoring and aligning their records with the apex bank.

The migration was contained in a circular with reference number BSD/DIR/PUB/LAB/016/027 signed by the Acting Director, Banking Supervision department of the CBN, Dr Adetona Adedeji,

The circular, which was addressed to banks, said the determination of the segment of deposits subject to sterilisation with the CBN as CRR would pass through two phases.

“Phase One – Utilisation of the Incremental Approach: The extant ratios (commercial banks 32.5 per cent and merchant banks 10 per cent would be applied to increases in the banks’ weekly average adjusted deposits.

“Phase Two – CRR levy of 50 per cent of the lending shortfall will be enforced for banks that do not meet the minimum Loan to Deposit Ratio (LDR) as per our correspondence to all banks referenced BSD/DIR/GEN/LAB/12/049 dated September 30, 2019.

“The CBN will provide your bank with details of the applied charges and their underlying computation rationale,” the CBN stated.

Source: The Guardian

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