CBN reverses exchange rate increase for Customs duties

By Sodiq Adelakun

The Central Bank of Nigeria (CBN) has announced a reduction in the exchange rate for computing Customs duties at the nation’s seaports.

This decision comes just 24 hours after the apex bank had raised the rate by 10.4 percent. According to information from the official trade portal of the Nigeria Customs Service, the Customs FX duty rate has been lowered from N1,662.35/$ to N1630.159/$ on Thursday, February 29, 2024.

This represents a 1.9 percent decrease compared to the previous rate used on Wednesday, February 28, 2024. Importers opening Form M on Thursday will benefit from this reduction in terms of the money needed to pay import duties.

The decrease in the Customs FX duty rate will provide some relief to importers and could potentially impact the cost of clearing goods at the port.

This adjustment may have implications for importers and traders engaging in import trade activities.

This represents a 1.9 percent reduction when compared to the old rate of N1, 662.35/$ used as of Wednesday, February 28, 2024, and a decrease of N32.191 on a dollar needed to clear goods from the port.

With the slash in rate, importers opening Form M today Thursday, February 29, 2024, for any import trade, will have small relief in terms of the money that would be used to pay import duties compared to the importer who opened Form M on Wednesday, February 28, 2024.

This is in line with the apex bank’s new directive that Customs should be using the rate on the date of submitting Form M for calculating import duties, and with the adjustment, the importer will be opening Form M at a lesser exchange rate.

Despite the slash, industry analysts believe that the apex bank needs to address the bigger and more troubling issue of the current prohibitive cost of clearing goods at the ports which had risen by over 40 percent in the last two months.