The benchmark foreign exchange (FX) rate used to calculate import tariffs has increased to N1,444.56/$ for the fourth time in a month. On February 2, the rate was changed to N1,356.883/$, and on Friday, February 3, it was reviewed to N1,413.62/$. The benchmark was raised to N1,444.56/$ yesterday, while it was modified to N1,417.635/$ last Friday.
Information from the Nigeria Customs Service (NCS) official website indicates that the most recent upward revision of the duty exchange rate represents a movement of 1.9%, which is less than the official CBN exchange rate of N1,481.982/$ as of yesterday.
Since the Central Bank of Nigeria (CBN) introduced the pseudo-floating of the foreign exchange market, this is the ninth time the rate has been modified. Tony Anakebe, a licensed customs agent, responded to the situation by stating that businesses were at risk due to the rapidity with which the NSC and the apex bank were adjusting the exchange rate.
He claimed that the constant fluctuation of exchange rates used to determine customs charges was becoming detrimental to companies and the reason for the recent slowdown in commercial activity.
“The rate of uncertainty in the business climate and volatility in the FX market is making it very difficult for importers and manufacturers to plan,” he stated.
Fairly used automobile market merchants in the US and Canada, meanwhile, are complaining that their operations in Nigeria are gradually coming to an end due to constant duty increases.
The Guardian discovered that because of their poor customer base, a few of the dealers are unable to cover their rent and other operating expenses. Francis Olawale, a shipper who was in Toronto, Canada in December and February 2024, stated that Nigerian clients are unable to purchase automobiles due to a variety of factors, including hefty duties and the foreign exchange problem.
Jude Augustine, a different shipper, verified the news and clarified that a significant 70% of Nigerian used car exporters to Canada and the United States had to close their doors as a result of low sales.
The shipper bemoaned the fact that turnover has hit an “all-time low” and that Nigerian auto dealers are angry about how hefty duties are hurting their companies.
He claimed that the cost of a used 2015 Toyota Corolla in Canada is approximately $11,000, and that freight, customs duties, and other levies increase the landing cost to approximately N16 million. He questioned how anyone could make money on the car in the current state.
“Please tell me, given the current hardship in the country, who will buy a fairly used vehicle for N16 million after all these charges and levies at the port before the vehicle exits the port?” he inquired.
