26 June 2019
NIGERIA: All Import Duties Increased by 6.5%
The official exchange rate for import duties to be paid at Nigeria’s ports has been increased from NGN306 to the US dollar to NGN326, an increase of about 6.5%. The new rate, effective from 11 June, was set by the Central Bank of Nigeria (CBN), which sets official exchange rates under its currency management regime.
Emmanuel Onyeme, Public Relations Officer for the Lagos-based Association of Nigeria Licensed Customs Agents said: “The new rate will increase the Cost, Insurance and Freight (CIF) value of every import. It will also inevitably result in increased costs of customs clearance in the country, and in turn to higher prices on imported goods for consumers. Furthermore, there is a danger that shipping will divert to ports in neighbouring countries, such as Cotonou port in Benin, where costs are significantly lower.”
Apart from benefiting the government by generating more revenues, assuming no decline in current import quantities, some industry pundits have speculated that the rate hike may be a step by the central bank towards a market-set exchange rate. The market rate is currently about NGN360 to the dollar, rather than its last officially set rate of NGN305. The CBN has to date maintained publicly that its foreign exchange policy remains unchanged.
Andrew Nevin, Advisory Partner and Chief Economist of international accountancy firm, PwC, said: “If the change in the exchange rate used by Nigerian customs is a further step in harmonising the exchange rate, the CBN will explain its strategy in due course.”