Victor EzejaThe exchange rate for customs duties collection has increased from N1,512/$ to N1,550/$1 in about 48 hours. This reflects N38 or 2.5 per cent increase when compared to the previous rate.
The Customs exchange rate for import duties last week, increased from N1,470/$1 to N1,508/$1. It subsequently rose to N1,516/$1 but dropped during the weekend to N1,512/$1, before rising again. This latest surge is the highest in the past three months (specifically, 21 March 2024 when it stood at N1,572/$1).
Join our WhatsApp ChannelThe current increase in the exchange rate for Customs duties collection is attributed to the recent depreciation of the naira in the Foreign Exchange (Forex) market. The Nigerian Customs Service (NCS) has in line with the Central Bank of Nigeria (CBN) directive, been using the official market rate to determine its rate for calculating import duties in the past one year.
From N1,509.67/$ on Friday, 5 July, the naira depreciated to N1,532.28/$1 in the official market, according to the Nigerian Autonomous Foreign Exchange Market (NAFEM) data published on the FMDQ Securities and Exchange platform on Tuesday, 9 July 2024.
READ ALSO: Apapa Customs Revenue Hits N1.02trn In H1 2024 Amid Trade Volume Decline
This depreciation at the beginning of July comes despite a relatively stable Forex market in June. The Forex market and the customs exchange rate exhibited considerable stability in June. The exchange rate closed at N1,505.30/$1, reflecting a 1.3% depreciation for the month, after varying between N1,473 and N1,510.
The volatility in the Forex market and Customs Exchange rate has been a source of concern for importers and other stakeholders in the trade sector owing to the impact on costs of imported goods.
The CBN has in the past one year, come up with a raft of monetary policy measures to tackle the high exchange rate and inflation that are ravaging the economy. The apex bank has hiked the Monetary Policy Rate (MPR), (the benchmark interest rate) by a cumulative 750 basis points (from 18.75% to 26.25%) in an attempt to tackle the rising inflation and attract foreign portfolio investors.
READ ALSO: Customs Duty Exchange Rate Hits N1530/$ Amid Naira Depreciation Continues
On the side of capital importation, there was a sign of immediate impact as the total capital imported into the country rose by 210.16% from $1.088.48 million in the fourth quarter of 2023 to $3.37 billion in the first quarter of 2024. Capital imports by type of investment showed that foreign portfolio investment took the lead, rising to $2.07 billion.
However, on the side of inflation, there seems to be no positive effect yet as the last data released by the National Bureau of Statistic (NBS) revealed that the headline inflation surged to 33.95% in May from 33.69% in April 2024.
This is also as economic experts and private sector players continue to express concerns about the impact of high interest rate on businesses.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
Follow Us