By Adewale Sanyaolu
The Centre for the Promotion of Private Enterprise (CPPE), has raised the alarm that the frequent changes in the customs duty exchange rate have become a huge burden on the business community.
A statement by the Chief Executive Officer(CEO) of CPPE, Mr. Muda Yusuf, lamented that the frequent changes in the Customs duty rate has led to high volatility in cargo clearing costs, worsening inflationary pressures and aggravating investment risk , especially in the real sector of the economy.
‘‘These frequent changes are profoundly detrimental to production, planning and other real sector activities in the Nigerian economy,’’.
Yusuf worried that in the first quarter of this year, there were changes in the customs duty exchange rate twenty-eight times.
He added that in April, the frequency of changes would be close to ten times or even more while as at May 1, 2024, the rate has jumped to N1373.65/$, saying it was less than N1200/$ few days before.
‘‘It is extremely difficult for investors to plan under these unstable circumstances. The situation has introduced an unprecedented level of uncertainty and unpredictability to the international trade dynamics. Investment risk has become elevated, planning has become difficult, risk management has become challenging and investors’ confidence is being weakened,’’.
The CPPE boss lamented that, it is double whammy for investors to grapple with volatility in the foreign exchange market and contend, concurrently,with high level of unpredictability in the international trade ecosystem, pointing out that, this is not consistent with our growth aspirations at this time.
‘‘The Centre for the Promotion of Private Enterprise [CPPE] appeals to the CBN to adopt a framework to minimize volatility in the customs duty exchange rate in line with the commitment of the present administration to bolster investors’ confidence and drive economic growth.
Such framework should adopt a quarterly customs duty exchange rate, after due consultation with the fiscal authorities. We propose a commencement rate of N1000/$ customs duty exchange rate. Consultation with the fiscal authorities is imperative because of the trade policy implications of such decisions. It is also consistent with the commitment of the present administration to effective coordination between fiscal and monetary authorities,’’.