Customs Duty: Peg exchange rate at N1000/$, CPPE tells Tinubu
The Centre for the Promotion of Private Enterprise [CPPE] has called on President Bola Tinubu to peg the customs duty exchange rate at N1000/$ for the next six months in the first instance through an Executive Order. The CPPE maintained that the current exchange rate of N1578/$ on the Nigeria Customs “is not good for […]
Centre for the Promotion of Private Enterprise (CPPE)
The Centre for the Promotion of Private Enterprise [CPPE] has called on President Bola Tinubu to peg the customs duty exchange rate at N1000/$ for the next six months in the first instance through an Executive Order.
The CPPE maintained that the current exchange rate of N1578/$ on the Nigeria Customs “is not good for the investment environment.”
The Director and CEO of CPPE, Dr Muda Yusuf, said on Sunday, in a statement made available to Daily Trust.
Yusuf expressed worry that, “the problem of the prohibitive and unpredictable exchange rate for cargo clearance is yet to be addressed by the government.”
The Director said the exchange rate is a major policy adjustment that “needs to happen to complement current measures to address the current cost-of-living crises in the country.”
He said “The high and volatile exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis, putting maritime sector jobs and investments at risk and weakening investors’ confidence.
“There is also the added heightened risk of cargo diversion to neighboring countries and smuggling which could jeopardize the realization of customs revenue target. This situation additionally creates serious competitiveness challenges for ethical and compliant investors in the economy because of their relatively elevated production and operating costs.”
To address, he reiterated that the presidency should peg the customs duty exchange rate at N1000/$ for the next six months in the first instance through an Executive Order.
“We are dealing with two separate issues here. One is about foreign exchange policy, the other is purely a trade policy matter. The responsibility of the CBN should end at the point of opening of Form M for importers within the context of extant foreign exchange policy.
“All other matters relating to international trade should be within the remit of the Federal Ministry of Finance and the Federal Ministry of Trade and Investment.
“These are the institutions statutorily responsible for trade policy issues. The determination of the customs duty exchange rate by the CBN is an intrusion into trade policy space which needs to be urgently corrected,” he said.
The Director also noted that, “in order to permanently address this matter, it might be necessary to amend the Customs Act to move the responsibility of determining the applicable exchange rate for import duty payment to the fiscal authorities.
“This is necessary to bring such rates in alignment with the extant trade policy direction of the government and remove the current avoidable uncertainty around international trade. This is what our peculiar circumstances demand.”