Nigeria Customs Announces Reduction In Foreign Exchange Rates For Import Levies

Nigeria Customs Announces Reduction In Foreign Exchange Rates For Import Levies

The Nigeria Customs Service (NCS) recently revised its foreign exchange (FX) rate for tariffs and duties to ₦1,480 per dollar, as displayed on the federal government’s single-window trade portal……….CONTINUE READING

This adjustment reflects a 3.28 percent decrease from the previous rate of ₦1,530/$ on May 17, marginally lower than the official FX rate of ₦1,510/$ at the close of trading on May 24.

Traditionally, Customs align their FX rates with recommendations from the Central Bank of Nigeria (CBN) for import duties, based on activities in the official FX market. As of the latest trading session, the Nigerian currency has appreciated to ₦1,339.33/$.

Muda Yusuf, the director-general of the Centre for the Promotion of Private Enterprise (CPPE), stressed on May 16 the necessity for Customs to establish a stable quarterly exchange rate ranging from ₦800/$ to ₦1000/$ for import duty assessments. He highlighted the direct impact of ongoing fluctuations on inflation and emphasized the importance of a stable exchange rate to mitigate inflationary consequences stemming from rising trade expenses.

Meanwhile, the Nigerian Naira exhibited significant appreciation against the US dollar on Monday, closing at ₦1,339.33/$ in the official foreign exchange market, marking a notable 9.68 percent increase from Friday’s rate of ₦1,482.81/$, according to data from the FMDQ overseeing the Nigerian Autonomous Foreign Exchange Market.

However, in the parallel (black) market, the Naira experienced a slight depreciation, trading at ₦1,520 to the dollar, down 1.32 percent from ₦1,500 on Friday, indicating ongoing volatility in the forex markets.

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, attributed this volatility to seasonal fluctuations during a press briefing in Abuja last Tuesday following the Monetary Policy Committee meeting, noting that it reflects the “seasonal demand and a freely functioning market system of demand and supply.”

Monday’s trading also witnessed a significant decrease in forex turnover, with daily figures plummeting by 67.50 percent to $180.80 million from $556.25 million on Friday, signaling reduced transaction volume in the market.

Furthermore, according to the latest data from the CBN, the demand for foreign exchange for importation and other forex-related activities has decreased by 42 percent year over year, part of a broader reduction in sectoral forex allocation, which saw a 41.9 percent drop in 2023. The CBN’s quarterly statistics report revealed that 19 sectors and services received a total of $21.12 billion in forex allocations last year, a significant decrease from the $29.98 billion disbursed in 2022

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