From N952 to N1,314: CBN Increased Customs Rate to Clear Goods 28 Times in 2024

From N952 to N1,314: CBN Increased Customs Rate to Clear Goods 28 Times in 2024

  • In the space of three months, Nigerian custom adjusted rate from N951.94 to NGN 1,314.03
  • The Comptroller General of the NCS said this resulted in several systemic issues
  • During the period, the rate was adjusted 28 times, with the highest increase at N 1,630.16 journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Concerns have been raised by the Nigerian Customs Service (NCS) regarding the ongoing modifications to customs import tax rates that have impacted the volume of transactions during the first quarter of 2024.

CBN Increased Customs Rate
There was a noticeable drop in cargo, as shown by a 4.89% drop in the number of transactions that were processed. in Q1. Photo Credit: Prapass Pulsub
Source: Getty Images

At a briefing in Abuja to highlight the Service's performance in the first quarter of 2024, the comptroller general of the NCS, Bashir Adewale, voiced the service's concerns.

Challenges with implementation of CBN's import duty

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According to protocol, Adewale clarified that the Central Bank of Nigeria's (CBN) currency rate is the basis for the rate that customs uses to clear goods through the Nigeria Integrated Customs Information System (NICIS).

He said:

“In the last quarter, 28 rates were directed by the CBN, ranging from NGN 951.94 per USD 1 in January 2024 to a peak of NGN 1,662.35 per USD 1 in February 2024. While a singular exchange rate of NGN951.94 per USD 1 was maintained in January, February witnessed 15 different spot rates ranging from NGN 951.94 per USD 1 to NGN 1,662.35 per USD 1.
“March saw 13 different spot rates applied, ranging from NGN 1,303.84 to NGN 1,630.16. These fluctuations resulted in an average applied exchange rate of NGN 1,314.03 per USD 1 in the clearance of customs goods during the quarter.”

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According to the NCS chief, they had several systemic issues throughout the quarter that made it difficult for them to carry out their legal obligations.

As a result, there was a noticeable drop in cargo, as shown by a 4.89% drop in the number of processed transactions.

Furthermore, there were a lot of challenges due to the significant variations in exchange rates used for shipment clearance through customs.

How this impact activities

Adewale claims these fluctuating rates have affected and disrupted activity, sending alarming signals to stakeholders.

He continued that beyond the conjecture about prospective gains on NCS income, the ramifications on transaction volumes are enormous and exceed any potential advantages.

To lessen the possible impact of currency rate swings on import activities, the CGC did point out that it has started recurring conversations with the CBN with the cooperation of the Hon. Minister of Finance.

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Regarding revenue performance, Adewale pointed out that the NCS reported collecting N1.34 trillion in revenue in the first quarter of 2024.

When compared to the same period last year, when N606 billion was earned, he pointed out that the collection for the first quarter represented a significant rise of 122.35%.

He said:

By March 2024, the revenue collected by NCS revenue grew by 132.76% from NGN 217,669,949,432.28 to NGN 506,642,193,019.05.
“When compared to the Federal government’s annual revenue target of NGN 5.07 trillion for the NCS to collect in 2024, the target translates to a monthly revenue target of NGN 423 billion.”

CBN puts limits on imported, and exported goods reported that the CBN has implemented a price verification system for goods imported and exported.

In a circular signed by Dr Hassan Mahmud, director of trade and exchange, the bank said this is to curb over-invoicing of imports and under-invoicing of exports.

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It advised the authorised dealer bank and the general public to note and comply accordingly.


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