Following concerns over the recent constant drop in foreign exchange, the Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE); Dr Muda Yusuf, has called for a comprehensive review of the Central Bank of Nigeria’s (CBN) role in determining Customs duty rates.
In a chat with newsmen recently, Dr Muda Yusuf lamented that the fluctuating exchange rates, particularly due to sharp depreciations, have adversely affected container traffic activities, causing a slowdown in momentum and tempo.
Addressing the issue of customs duty, Dr Yusuf advocated revisiting existing laws and arrangements to ensure stability and predictability.
He suggested fixing a permanent Customs exchange rate, possibly between N900 and N1,000 Naira to the dollar, for a specified period, such as three months, six months, or a year.
Dr Yusuf however advocated that fixing a static Customs duty exchange over a period of three months to one year would not only foster economic stability, but also ensure predictability in international trade within the maritime sector.
“The drop-in exchange rate is a very good development for imports and for the maritime sector generally. But the impact may not be immediate because if you look at the import cycle sometimes, it can be up to 60 to 90 days. So, we pray for sustainability of this current trend. Then in a matter of some few weeks or months, you will begin to see the impact on the activities at the port. So, it is a very good development.
“But I want to plead that in addition to what is happening, the Central Bank of Nigeria and the fiscal authorities should revisit the issue of the Customs duty. It’s extremely very important. Yes, there may be laws and regulations that say that the CBN should be determining the Customs duty but you make laws for people, you don’t make people for laws. They need to review that law arrangement for stability and predictability in international trade. It is extremely very important.
“The best way to do it is to fix it for probably three months, six months, or even for a year. Saying for this period of time, this is what the exchange rate for the importation of import duty will be. Between 900 and 1,000 will be okay so that people can plan. Apart from that, it will help to bring down the cost of living. This is because the biggest problem we are facing today, apart from the issue of the exchange rate issue, is generally the cost of living and the problem of inflation” he noted.
Dr. Yusuf expressed concerns about the current system’s lack of stability, citing past intrusions into trade policy by the central bank. He stressed the importance of aligning customs duty exchange rates with market realities to foster stability and predictability in international trade, citing the tariff book as a tool for achieving these goals.
The CPPE boss urged the government to seriously consider fixing the customs duty exchange rate to enhance economic stability and support its efforts to reduce the cost of living. He proposed a rate of around 1,000 Naira to the dollar for the next six months as a viable option to promote stability and predictability in international trade.
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