Worried by the growing impact of fluctuating exchange rates for calculating import duties at the ports, the presidential committee on fiscal policy and tax reforms has advised the federal government to adopt an exchange rate of N800 per dollar for computing Customs import duty.

Chairman of the committee, Taiwo Oyedele, said this in Lagos on Thursday while engaging journalists on the activities of the tax panel.

Oyedele expressed concern over the import duty rate which constantly changes due to the volatility of the foreign exchange (FX) market.

This, Oyedele said, does not allow for adequate planning by businesses.

“When we did the budget, we said naira to the dollar would be N800, now it is 1,000 something. People need to plan.

“We are saying that the government can sign an order that says N800 per dollar should be used for paying Customs duties for the rest of the year till December. So, we have proposed N800,” he said.

Recall that the exchange rate for computing Customs duties has been witnessing rapid adjustments by the Central Bank of Nigeria.

The committee’s proposal aligns with the popular opinion of industry stakeholders who called for hedging of the exchange rate for Customs duties.

The director-general of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said the exchange rate for computing import duty should be within the fiscal policy space because it relates to trade.

“The fiscal policy authorities are more in tune with the realities of business; thus, FX rate for import duty is used to regulate trade flow and should be within their purview,” he advocated.

Yusuf called for a review of the 2023 Customs Act and quarterly hedging of the exchange rate at N1,000 or N1,100 to protect businesses.

National Secretary of the National Association of Government Approved Freight Forwarders, Kingsley Igwe, said the CBN should hedge or benchmark the FX rate for duty payment because the fluctuating rate is affecting investor confidence.

“The predictability of the cost of clearing in Nigeria is retrogressive due to the fluctuating FX rate for duty payment, which is not good for Nigeria’s logistics performance index rating,” Igwe said.

In the first quarter alone, a total of 28 rates were directed by the CBN for computing Customs duties, according to Wale Adeniyi, comptroller general of Customs.

Pension fund allocation to infrastructure development has continued to swell with the investment of a total of N230 billion in Sukuk Bonds and the Nigeria Infrastructure Debt Fund (NIDF).

A breakdown of the investment shows that Pension Fund Administrators (PFAs) invested N127 billion in Sukuk Bonds (I-IV) for federal road projects between 2017 and 2023, while N103 billion was allocated to the Nigerian Infrastructure Debt Fund.

The roads that attracted this investment are the Kano-Maiduguri Express Way, Kaduna Eastern Bypass, Enugu-Port Harcourt Express, Ibadan Ilorin Express, Ahmadu Bello Way VI and Loko –Oweto Bridge.

Chief Executive Officer, Pal Pensions Limited, Saadu Jijji, speaking on the impact of pension funds on infrastructure development and economic growth, said a lot of funding has been made in the sector without much noise being made about it.

According to him, PFA are the largest investors in NIDF, the biggest infrastructure fund in Nigeria that invests in projects from power to student hostels.

Jajji said PFAs also invested in Dangote Refinery and Petrochemicals when in 2022, the Dangote Industries issued a N300 billion bond for the completion of the refinery.

“PFAs have invested in ACTIS Real Estate fund that has acquired Jabi Lake Mall and will acquire Ikeja City Mall.”

Other infrastructure investments by PFAs are State Bonds, Novare Real Estate, MTN, Niger Delta Exploration and Production Plc, Lagos Free Zone and the Nigeria Mortgage Refinancing Company (NMRC) where it invested N26 billion from N100 billion guarantee.

Vice President, Pension Fund Operators Association of Nigeria, Joy Ojakovo, said the Contributory Pension Scheme (CPS) has brought many benefits to individuals and the nation and the industry needs to continue to work with stakeholders to improve the scheme.

“Nigeria’s pension industry has been the fulcrum for a lot of development that has happened in the country over the last 15 years and this fact is not lost on us as pension fund managers. We realise this and we take this responsibility very seriously.

“Another benefit of CPS is the fact it has provided an opportunity for the accumulation of long-term capital which serves as an avenue to invest in various sectors of the economy.

“The pension funds have been the largest players in the bond and equity markets. We are very proud of the work we have done in this regard, and we continue to look for opportunities to develop and deepen the market.”

Chief Executive Officer, Pension Fund Operators Association of Nigeria, Oguche Agudah, said the PFAs were willing to invest in infrastructure if properly packaged, with guaranteed safety.

Oguche said pension fund managers were enthusiastic about investing in infrastructure, disclosing that in a recent pool among PFAs, 42 percent indicated they were looking for investments in infrastructure.

Bankole Opeyemi, a staff of one of the PFAs, said the integration of Sukuk bonds into the pension fund’s portfolio and the allocation of assets to infrastructure projects were strategic decisions with potential benefits to the pension fund’s overall performance.

He also said that the allocation of assets to infrastructure projects could support the growth of critical infrastructure, such as transportation systems, energy generation and housing, which are essential for economic growth and job creation.

The combination of Sukuk bonds and infrastructure development can contribute to the country’s economic growth by providing a stable source of funding for these projects and creating jobs and opportunities for local businesses.

“Overall, this development is likely to have a positive impact on the pension fund’s performance and contribute to the country’s economic development.”

Investment in pension funds is guided by regulations issued by the National Pension Commission (PenCom) in February 2019.

According to the guidelines, government securities is 70 percent; corporate debt – 40 percent; money market- 30 percent; ordinary shares- 25 percent, while infrastructure funds is 5 percent.

As part of efforts to make Osun State attractive to investors and promote the ease of doing business, the Governor of Osun State, Ademola Adeleke has approved the resuscitation of the defunct Osun State Investment Promotion Agency (OSIPA) to be headed by a Special Adviser to the Governor, Mr Olalekan Felix Olagunju.

This was contained in a memo released from the office of the Head of Service.

According to the memo, the move affirms the administration’s readiness to leave no stone unturned in its commendable quest to entrench forward thinking policies that will have positive and far reaching effects on the economy of the state with a view to signaling to both local and foreign investors, the readiness of the state to accommodate worthy investment across various sector of the state.

“The Osun investment promotion agency will be saddled with the responsibility of promoting the abundant investment opportunities in the state, attracting investment and promoting the influx of investment to the state.

“Specifically, the Agency shall have the following objectives, as approved by the Governor: Build the investment image of the state and disseminate information on available investment opportunities.

“Provide after care services to existing investors in the state; Develop proposal for economically viable PPP projects in conjunction with relevant MDAs in alignment with the various plan documents.

“Identify and remove business constraints and challenges in collaboration with the ministry of commerce and industry.

“Serve as one – stop shop for investment with input from relevant Government agencies focusing on development and strategic documents as well as the plan of the state.

“Premised on the above, all ministries, departments and agencies (MDAs) of the state Government are hereby notified that the Osun state investment promotion Agency (OSIPA) has been approved to commence operation with a view to achieving its stated objectives and goals,” the memo noted.