The Central Bank of Nigeria (CBN), has approved an increase in the import duty rate by 43%. The exchange rate its now to be adjusted from N951.941/$1 to N1,356.883/$1. Experts have projected that prices of imported goods and services will increase, thereby, fueling inflation. The Nigeria Customs Service levies duties on imported cargoes before they are cleared from the ports. These charges vary from 5% to 35% based on the harmonized commodity and coding system (HS code). Ever since the CBN unified the exchange rate market in June last year, the country has been bedeviled with an exchange rate crisis. Market forces have been allowed to dictate the value of the naira, resulting in a depreciation of over 100% in its value. Prior to the CBN’s policy change in June, the naira traded at an average of N460/$.
CBN has a reported backlog of around $7 billion and the Governor, Yemi Cardoso has stated that clearing the backlog is the short-term priority of the team.
On Monday, the apex bank reported the payment of $500 million to various sectors of the economy as part of the backlog of FX forwards owed to businesses across Nigeria.
The Chief Executive Officer of the Center for the Promotion of Private Enterprises, CPPE, Dr. Muda Yusuf, while reacting to the development expressed shock stressing that the increase will further worsen the already bad economic situation.
Yusuf wondered if anybody was advising the Governor of the CBN on the implications of these actions.
He said, “I am shocked at the development, I mean with all these suffering, with all these costs, we have not recovered from the unification of the exchange rate they just did, now another increase in duty.
“This increase will definitely affect every area of our economic life, already; we recorded a drop in the volume of import last year, so you imagine what will happen with this increment.
