NCS Revises Rate To N783/$ Amid 70% Decline



Barely five months after the Central Bank of Nigeria (CBN) floated the Naira, the Federal Government adjusted the Nigerian Customs Service (NCS) Exchange Rate calculations of import duties from N770.88/$ to N783.174/$.
The changes were officially reflected on the NCS portal, just as stakeholders in the import and export value chain said the new rates would guide importers and clearing agents as they make quotations for new jobs and capture for payments.

CBN had authorised banks to sell foreign exchange freely at market-determined rates, aligning with President Bola Tinubu’s commitment to ensure a single exchange rate regime.

But the economic hardship occasioned by some economic policies of the new administration alongside Federal Government’s trade and fiscal policy measures on duty rates, tariffs, excise levies and taxes, has resulted in a 70 per cent drop in importation into the country.

Already, the cost of clearing cargoes in Nigeria is higher than other African countries and is seen as the most expensive in the West and Central Africa hub.

The implication, according to the Minister of Marine and Blue Economy, Adegboyega Oyetola, during a recent meeting with port stakeholders, is the problem of abandoned and overtime cargoes, thereby reducing the storage capacity at the ports.

According to him, some of the cargoes have been left at the ports for over 10 years due to bottlenecks in clearing them. The minister said cargoes meant for Nigeria are taken to ports of Ghana, Togo, Cameroon and other neighbouring countries due to their lower cost of clearing goods.

Already, the NCS has inaugurated a committee to speed up the decongestion of overcrowded ports burdened by overtime cargo. The Comptroller-General of Customs, Adewale Adeniyi, inaugurated the Disposal of Overtime Cargo Committee on Wednesday, in Abuja.

The development arises in response to the new Customs Act, which empowers NCS to dispose of containers that have exceeded their allotted time within the ports.

Adeniyi emphasized that port decongestion is a paramount objective of the NCS and President Tinubu, promising heightened efficiency and enhanced trade facilitation.

According to him, the provision of the NCS Act 2023 mandates that the disposal of cargo exceeding its allotted time can now only occur through a court order and goods must be disposed of through public auction or tender to be widely publicized in advance through national newspapers, television and the service’s official website.

General Manager of the Managing Director’s office, Nigerian Ports Authority (NPA), Durowaiye Ayodele, expressed his relief, highlighting the issue of over 7,000 overtime containers that have remained for years across the ports.

He said: “We have containers that have been there for over 10 years, occupying economic space for which we are unable to dispose of. So this is a significant relief for our operations. We are delighted that we have reached a point where we can begin to remove some of these lingering containers and overdue cargo from the port.”

The Manager of Client Services, Inspired Cars, Iwayeye Olatunji, confirmed that some automobile dealers who couldn’t meet up with their duty payment, already abandoned the cars at the ports.

“Depending on the financial buoyancy of the importer, by the time he can’t raise the money on time and the demurrage starts counting, it will be expensive and the person will have to abandon the vehicle. Some can sell it at a cheaper rate to someone that can clear it, so they don’t lose out completely on the money they used in importing. They sell it below the purchasing price so it will attract buyers who will pay for the duty,” he said.

Olatunji noted that the increase in duty rate will definitely affect the prices of used (Tokunbo) cars and indirectly affect the price of Nigerian used vehicles.

He said when the Nigerian used automobile dealers notice that the price of tokunbo vehicles have gone up, they want to take advantage of that to increase their own prices.

Spokesperson for Seaport Terminal Operators Association of Nigeria (STOAN), Dr Bolaji Akinola, said the Federal Ministry of Finance with directives from the President keep raising the benchmark rate of the naira because of its depreciation, noting that the depreciation of the Naira is affecting the duty paid to NCS.

“Every time the Naira loses value, Nigerians will have to pay more in the cost of shipping, which is in dollars as well as the import duty, while clearing goods become higher,” he said, adding that the only way out is to halt the rapidly declining value of the Naira and make it stable.

The Head, Customs and Trade Facilitation Committee, Importers Association of Nigeria (IMAN), Ajanonwu Vincent, said the Federal Government exchange rate and Customs exchange rate for customs valuation purposes is another wicked fiscal policy to further kill international and domestic trade

According to him, government agencies do not give a thought to how to build up international and local trade, but only concerned with impoverishing and punishing the masses with incessant tariff and duty hikes.

It would be recalled that NCS on Wednesday announced that it recorded an impressive 66.5 per cent surge in revenue collection in four months, between July and October 2023.

According to the Comptroller-General, Adeniyi, the service collected an average revenue of N202 billion in the first half of the year, but by October, the monthly revenue collected had reached N333.9 billion, showing a 65.5 per cent increase.

But Vincent warned that 2024 will be a rough year of hardship and suffering for the masses as prices of everything are going up on a daily basis, while NCS races to meet its revenue target through the ports to help the government fund its budget.

“I am seeing a hunger-induced revolution in this country that guns and bullets cannot stop. Visit all the bonded terminals, seaports, airports and land border stations; they are all going down. Shipping companies are down-sizing. That is a new name for staff retrenchment. Agents are dying. International trade is almost dead. Nigerian Importers are suffering and internal trade is battling to survive,” he said.

The Director/Chief Executive Officer Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said this is not a good time to increase government fees or taxes because the situation now is extremely challenging both for the citizens and businesses.

He said what the citizens and businesses are looking forward to is the palliatives that the government promised because the cost of production and operation, the profit margins, everything, have been adversely affected by the current economic situation.

Yusuf said the Ministry of Finance and the CBN need to be more sensitive to what is happening to economic players, adding the citizens that will suffer the consequences.

He also noted that this will put more pressure on the citizens and businesses, adding that it is not enough that businesses can transfer these costs to their customers who are also resisting the hike in prices.

The Public Relations Officer, Association of Registered Freight Forwarders of Nigeria (AREFFN), Taiwo Fatomilola, said the president is supposed to have a palliative plan for importers and those doing business in the country, rather, he is just making business difficult with harsh fiscal policy which is affecting production, sales and prices in Nigeria.

“I have a trailer load that I have already charged my importer, now the duty exchange rate has been increased, how do I contact my importer about the new development and get money, it has affected my profit,” he lamented.

Fatomilola said Nigeria is an export nation as well and there is difficulty in exporting, adding that the environment is no longer safe for local producers with the regulatory agencies frustrating export business.


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