For the fourth time in one month, the benchmark foreign exchange (FX) rate for computing import duties has been raised to N1,444.56/$. The rate was adjusted on February 2 to N1,356.883/$ and reviewed to N1,413.62/$ on Friday February 3. Last Friday, the benchmark was adjusted to N1,417.635/$ while it was raised to N1,444.56/$ yesterday.
According to information obtained from the official website of the Nigeria Customs Service (NCS), the latest upward review of the duty exchange rate represents a 1.9 per cent change, which is below the official CBN exchange rate of N1,481.982/$ as of yesterday.
This is the eighth time the rate would be adjusted since the pseudo-floating of the FX market was adopted by the Central Bank of Nigeria (CBN). Reacting to the development, a licensed customs agent, Tony Anakebe, said the rate at which the apex bank and the NSC adjust the exchange rate was becoming too rapid and dangerous for businesses.
According to him, frequent adjustment of the exchange rates for calculating Customs duties was becoming unhealthy for businesses and also explained why businesses have slowed down in recent times.
“Importers and manufacturers are finding it extremely difficult to plan because of the rate of uncertainty in the business climate and volatility in the FX market,” he said.
Meanwhile, fairly used car market dealers in the United States (U.S.) and Canada are groaning over the gradual winding down of their businesses in Nigeria owing to incessant hikes in duties.
The Guardian learnt that some of the dealers cannot afford to pay rent and other costs associated with their businesses due to low patronage.A shipper, Francis Olawale, who was in Toronto, Canada between December and February 2024, confirmed that customers from Nigeria cannot afford to buy cars for multiple reasons ranging from FX crisis to high duties.
Another shipper, Jude Augustine, confirmed the development and explained that over 70 per cent of Nigerian exporters of used vehicles in Canada and America have closed shops due to low patronage.
The shipper lamented that Nigerian car dealers are frustrated with the impacts of high duties on their businesses, saying turnover has reached an “all-time low”.
He said a used 2015 Toyota Corolla costs about 11,000 Canadian dollars while freight charges, customs duty and other levies raise the landing cost to about N16 million, wondering how anybody could sell at a profit at the current condition.
“After all these charges and levies at the port before the vehicle exits the port, please tell me, who will buy a fairly used vehicle for N16 million considering the current hardship in the country?” he asked.
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