The exchange rate for Nigeria Customs Service (NCS) duties has gone up from N1,520 per dollar to N1,558 per dollar.
This is an increase of N38 from the previous rate and it’s higher than the NAFEM closing rate of N1554.65 per dollar, according to data from the FMDQ.
Earlier this week, the naira fell to N1561 per dollar in the official market. Even though the naira has been losing value against the dollar over the past three days, the total amount of foreign exchange (FX) being traded has gone up during the same time.
On Wednesday, the total FX traded in the official market jumped by 25.78%, reaching $236.7 million, up from $188.19 million the day before.
The biggest increase was on Tuesday, with a rise of 41.01%, while Monday saw a 14.19% increase. Overall, FX trading has gone up by 77.36% from Monday to Friday this week.
The Central Bank of Nigeria (CBN) sets the customs duties rate. They had previously dropped the exchange rate from N1549 per dollar to N1520 per dollar before the current increase. In July, the exchange rate for duties has increased by 5.9%, from N1470 per dollar to the current rate.
This shows that the naira is getting weaker even though Nigeria’s foreign reserves have gone up. A recent review by Newslodge shows that the country’s foreign reserves have increased to $35.05 billion.
The foreign reserves are now at their highest level since May 30, 2023, when they were $35.09 billion, which was about 14 days before the new foreign exchange (FX) unification policy was introduced in June 2023. This is the first time the reserves have gone over $35 billion under President Bola Tinubu’s administration.
Complaints from trade organizations about high customs duties
The increase in the exchange rate for customs duties above the official market rate will upset business stakeholders who have been asking for a lower exchange rate for duties.
The Centre for the Promotion of Public Enterprise (CPPE), the Manufacturers Association of Nigeria (MAN), and NACCIMA have been asking for a stable FX rate for duties.
The CPPE has even advised the CBN to set a quarterly FX rate for duties. These trade organizations say that the high exchange rate for import duties makes business harder and raises the cost of imports, which then makes goods more expensive in the market.
Earlier, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said the committee recommended a customs duties exchange rate of N800 per dollar, which is the same rate in the 2024 Nigeria budget. However, this has not been implemented yet as the committee’s proposals are still being rolled out.