Customs worried as CBN hikes duty rates 28 times in 3months
The Nigerian Customs Service (NCS) has expressed concerns over the continued adjustments of customs import duty rates which have affected the volume of transactions in the first quarter of 2024. Comptroller General of the NCS, Bashir Adewale, expressed the concerns of the Service yesterday in Abuja at a briefing to highlight its performance in the […]
Bashir, CG Customs
The Nigerian Customs Service (NCS) has expressed concerns over the continued adjustments of customs import duty rates which have affected the volume of transactions in the first quarter of 2024.
Comptroller General of the NCS, Bashir Adewale, expressed the concerns of the Service yesterday in Abuja at a briefing to highlight its performance in the first quarter of 2024.
During the quarter, the NCS boss stated that they encountered several systemic challenges that impeded their ability to fulfil statutory responsibilities effectively which led to a notable decline in cargo, evidenced by a 4.89% decrease in the volume of transactions handled.
“Additionally, significant fluctuations in exchange rates applied in the customs clearance of consignments posed considerable difficulties. As per protocol, the exchange rate utilised by customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the Central Bank of Nigeria (CBN).
“In the last quarter, a total of 28 rates were directed by the CBN, ranging from NGN 951.94 per USD 1 in January 2024 to a peak of NGN 1,662.35 per USD 1 in February 2024. While a singular exchange rate of NGN951.94 per USD 1 was maintained in January, February witnessed 15 different spot rates ranging from NGN 951.94 per USD 1 to NGN 1,662.35 per USD 1.
“March saw a total of 13 different spot rates applied, ranging from NGN 1,303.84 to NGN 1,630.16. These fluctuations resulted in an average applied exchange rate of NGN 1,314.03 per USD 1 in the clearance of customs goods during the quarter,” Adeniyi explained.
He added that, “The repercussions of these fluctuating rates have sent concerning signals to our stakeholders, affecting and disrupting activities. Beyond the speculation regarding potential gains it may have on NCS revenue, the implications on transaction volumes are significant and outweigh any possible benefits.”
The CGC however noted that with the support of the Honourable Minister of Finance, it has initiated periodic consultations with the CBN to mitigate the potential impact of exchange rate fluctuations on import activities.
On revenue performance, Adewale noted that in the first quarter of 2024, the NCS recorded a total revenue collected amounting to N1.34 trillion.
He noted that the collection for the first quarter represents a substantial increase of 122.35% compared to the same period last year, where N606 billion was generated.
“Month-by-month analysis further illustrates the Service’s impressive growth trajectory. In January 2024, revenue collection surged by 95.60%, reaching NGN 390,824,148,326.55 from NGN 199,809,974,327.52 recorded in January 2023.
“This upward trend continued in February 2024, with a staggering 138.68% growth, elevating revenue collection to NGN 450,209,267,557.15 from NGN 188,625,011,386.87 in February 2023. By March 2024, the revenue collected by NCS revenue grew by 132.76% from NGN 217,669,949,432.28 to NGN 506,642,193,019.05.
“When compared to the Federal government’s annual revenue target of NGN 5.07 trillion for the NCS to collect in 2024, the target translates to a monthly revenue target of NGN 423 billion,” he said.