CPPE Urges Nigerian Government to Peg Customs Duty Exchange Rate at N1,000/$ for Six Months to Ease Economic Pressure

The Centre for the Promotion of Private Enterprise (CPPE) is urging the Nigerian government to fix the exchange rate for customs duties at N1,000 to the US dollar for a minimum of six months. Muda Yusuf, the director of CPPE, made this appeal in a statement on Sunday.

The economic think tank highlighted that this measure, alongside other budgetary actions, could help mitigate Nigeria's ongoing cost-of-living crisis. The CPPE emphasized the importance of addressing the unpredictability of the nation’s exchange rate for cargo clearance, which is currently contributing to inflation, increasing production costs, and raising operating expenses for businesses.

“In light of this, the CPPE is reiterating its appeal to the presidency to peg the customs duty exchange rate at N1,000/$ for the next six months in the first instance through an Executive Order," Yusuf stated.

He added, “This resonates with the current federal government’s commitment to alleviating the current hardships on the citizens and the burden on businesses. It is gratifying that the Presidential Committee on Fiscal Policy and Tax Reforms made a similar recommendation. The Organized Private Sector (OPS) had also strongly advocated in the same vein."

Yusuf noted that the current customs duty exchange rate on the Nigeria Customs Service portal is N1,578 per dollar, a rate that has been fluctuating almost weekly, creating an unstable environment for investment.

He further clarified, “It is important to note that this proposition is without prejudice to the ongoing foreign exchange reforms of the present administration. Contrary to concerns in some quarters, the adoption of a lower exchange rate for the computation of customs duty would not undermine the current foreign exchange reforms. This is not a request for a concessionary exchange rate for forex allocation."

Yusuf also distinguished between foreign exchange policy and trade policy, stating, "We are dealing with two separate issues here. One is about foreign exchange policy, the other is purely a trade policy matter. The responsibility of the CBN should end at the point of opening Form M for importers within the context of extant foreign exchange policy. All other matters relating to international trade should be within the remit of the Federal Ministry of Finance and the Federal Ministry of Trade and Investment. These are the institutions statutorily responsible for trade policy issues. The determination of the customs duty exchange rate by the CBN is an intrusion into trade policy space which needs to be urgently corrected.”

This development coincides with the recent launch of a 150-day import duty relief program for certain staple food items by the federal government.

It is also noteworthy that for the first time since 2022, Nigeria's inflation rate decreased in July 2024, falling to 33.95 percent.