Nigeria Customs Scaring Away Importers From Ports With High Duties – T-PACI President 

National President of The Patriots Anti-Corruption Initiative (T-PACI), Stephen Chigozie Ibe, has expressed concerns that the volume of goods that come through Nigerian ports has dwindled because of high import duties imposed on importers by the Customs Service.

Mr Ibe, who spoke in an exclusive interview with Prime Business Africa, said the Nigerian Customs Service (NCS) has in their quest to increase revenue generation at the ports, jerked up all fees paid by importers and which has unfortunately reduced the volume of imports.

“Is it not when you have more inflow of cargoes that you have more revenue generation?” he asked. “Now you are chasing away importers that are supposed to bring in their goods in the ports with a very high rate of import duties and the harsh treatments. Most of them have stopped importation,” Ibe stated.

He observed that this worrisome development has forced a couple of importers to stop importation while many abandoned their goods at the ports for not being able to pay high fees to clear them.

According to him, many importers now import their goods through the Benin Republic, clear them from there, and bring them into Nigeria and other nearby African countries where they have business interests.

“Very soon all of us will go to Togo and Benin Republic to clear our cargoes. This is because very soon, we cannot clear from here again,” he lamented.

The T-PACI president said that to clear a 40ft container now, an importer must be ready to spend not less than ₦17 million against ₦6 million before.

“Do you know how much it costs to clear a 40ft now? For PARR, to clear a 40ft container no matter what is inside even if it is sand, it must be up to ₦11 million or ₦13 million unless you are able to find your way and manoeuvre, you get it, sometimes, down to ₦9 million. Then before you can be able to clear your 40ft container, you must spend like ₦17 to ₦18 million, something we were using ₦5 to ₦6 million before to clear and everybody was crying.”

Since the foreign exchange reforms done last year, the Central Bank of Nigeria (CBN) has directed Customs to adjust their FX rates for calculating import duties in line with the official foreign exchange market rates. The volatility in the foreign exchange market has made the customs duty rate unstable. From about ₦600/$1 in July, it jumped to about ₦952/$1 in December 2023. It had risen to about ₦1,700/$1 sometime this year and later came down due to the appreciation of the naira in the foreign exchange market recorded last two months. As of Wednesday, 5 June 2024, the exchange rate for Customs duty as observed in the official trade portal of the Nigeria Customs Service was at ₦1474.42/$1.

Customs has adjusted the duty rate for about 40 times this year as the FX rate rises and drops.

Mr Ibe expressed concern that the fluctuation of the rate for Customs duty has a grave impact on the cost of goods, adding that the consumers are at the receiving end as every importer puts the entire cost on the goods.

He noted that formerly there was a certain amount that was fixed which importers paid and not constantly changing the rate as the exchange rises and drops.

“All the costs incurred by importers are falling on the head of the poor masses.”

The T-PACI boss called on the government to have a fixed rate for customs duty assessment and also work on stabilising the exchange rate.

Recently, the Presidential Committee on Fiscal Policy and Tax Reforms recommended an exchange of ₦800 per dollar Customs duty rate for the rest of this year.

Chairman of the committee, Taiwo Oyedele, a former partner at PwC Nigeria, said the frequent changes in import duty rate adopted by the NCS due to FX market volatility do not allow for adequate planning by businesses.

On this as well, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, had recommended that the Customs should adopt a quarterly exchange rate between ₦800/$1 and ₦1,000/$1 for import duties assessment.

Speaking further on the Foreign exchange crisis, Mr Ibe urged the Federal Government to create policies that encourage local production and also work towards ensuring that all the refineries are working to be able to produce petroleum products locally and reduce the price. He also asserted that producing locally would reduce the pressure on FX caused by imports and make the rates come down.