Touchaheart – Peter Obi, the Labour Party’s Presidential Candidate for the 2023 elections, has warned the Federal Government that its inconsistent and arbitrary custom duty charges are hurting business growth in Nigeria.
According to touchaheart, the Nigeria Customs Service exchange rate for importing goods has been revised at least nine times since President Bola Tinubu assumed office.
The Central Bank of Nigeria (CBN) usually determines the exchange rate for Duty collection.
In June 2023, the first increase occurred, moving from N422.30 per dollar to N589 per dollar. As importers struggled to cope, the CBN raised it to N770.88 per $1 in July.
On November 14, 2023, the CBN imposed another adjustment, increasing the exchange rate from N770.88/$1 to N783.174/$1.
In December 2023, a further adjustment took place, as the exchange rate climbed from N783.174/$1 to N951.941/$1.
On February 2, 2024, the CBN implemented the fifth increment, rising from N951.941/$1 to N1,356.883/$1.
In January, it went from N952/$ to N1356/$ and then to N1,413/$ before reaching N1,444/$ and later N1,515. It finally got to N1.605.
Obi expressed his concern about this development in a series of posts on his X handle on Wednesday morning.
He said, “I urge the Federal Government of Nigeria to urgently put an end to the inconsistency in duty charges, as it is affecting the overall business environment in the country.
The federal government should stop the random and ever-rising customs duties, as they are now having a negative impact on businesses and the prices of goods, and this poses a serious threat to the economy.
I wish to urgently call on the Federal Government of Nigeria to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country. The federal government should stop the arbitrary and ever-increasing customs duties as
— Peter Obi (@PeterObi) February 21, 2024
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“It is unfair that when importers initiate their importation, Form M and other import-related documents are based on a specific exchange rate. For instance, N1000 to $1, which is the prevailing exchange rate at the time the importer of goods used to calculate the whole process, from the import initiation to receiving the goods in his warehouse.
“Then, when the goods arrive in Nigeria, and duties are calculated at different rates, such as N1400 to $1, it becomes a major business problem that leads to business losses. Worse still, it directly fuels the inflationary surge, which is the reason for the rising cost of goods and living,” Obi said.
He said that such random charges would inevitably result in more business closures and job losses.
He said, “This is because when the business was initiated, calculations, including duties, were based on the prevailing exchange rate and the prevailing market prices. If this situation is not fixed, our importers may opt to use ports of neighboring countries, which will leave our ports under-utilized, and further worsen our economy as a result of revenue loss.”
The former Anambra State governor said the government should also show consistency in its policies, as this will help with economic forecasting and business planning.
He lamented that businesses were collapsing and manufacturers were shutting down due to the poor and inconsistent economic policies of the government.
He said, “The government should focus on supporting businesses, especially those in the manufacturing sector, to keep their businesses running and keep the economy growing, as the small business sector is the most vital engine of economic growth.
“We cannot afford to prioritize high customs revenues over the survival of local businesses, employment and reasonable cost of living,” Obi said.
The forex crisis had caused panic among freight forwarders, especially among members of the Manufacturers Association of Nigeria (MAN), who are major
