\u2022BY DR MUDA YUSUF
\n<\/b><\/p>\n
The <\/span><\/span>Centre for the Promotion of Private Enterprise (<\/span><\/span>CPP<\/span><\/span>E)<\/span><\/span>\u00a0is worried that the problem of the pro<\/span><\/span>hibi<\/span><\/span>tive <\/span><\/span>and unpredictable <\/span><\/span>exchange rate for cargo clearance is yet to be addressed by government. \u00a0We believe it <\/span><\/span>is<\/span><\/span> a major policy adju<\/span><\/span>s<\/span><\/span>tment that needs to happen to complement current measures to <\/span><\/span>address <\/span><\/span>the <\/span><\/span>current <\/span><\/span>cost-of-living<\/span><\/span> crises<\/span><\/span> in the country. <\/span><\/span><\/b><\/p>\n The high <\/span><\/span>and volatile <\/span><\/span>exchange rate for import duty assessment <\/span><\/span>is fueling <\/span><\/span>the already high <\/span><\/span>inflation, increasing production and operating costs for <\/span><\/span>manufacturers and other <\/span><\/span>businesses<\/span><\/span>, worsening the <\/span><\/span>cost-of-living<\/span><\/span> crisis<\/span><\/span>, <\/span><\/span>putting <\/span><\/span>maritime<\/span><\/span> sector jobs<\/span><\/span> and investments<\/span><\/span> at risk<\/span><\/span> and weakening <\/span><\/span>investors\u2019<\/span><\/span>confidence<\/span><\/span>. \u00a0There is <\/span><\/span>also<\/span><\/span> the added <\/span><\/span>heightened <\/span><\/span>risk of cargo diversion to <\/span><\/span>neighboring<\/span><\/span> countries<\/span><\/span> and smuggling<\/span><\/span> which <\/span><\/span>could jeopardize the<\/span><\/span> realization of customs revenue target.<\/span><\/span> \u00a0This <\/span><\/span>situation <\/span><\/span>additionally <\/span><\/span>creates serious competitiveness challenges for ethical and compliant <\/span><\/span>investors in the economy because of their <\/span><\/span>relatively <\/span><\/span>elevated production and operating costs.<\/span><\/span><\/p>\n In the light of this, the CPPE <\/span><\/span>is reiterating its appeal <\/span><\/span>to<\/span><\/span>the presidency <\/span><\/span>to peg the customs duty exchange rate at N1000<\/span><\/span>\/$<\/span><\/span> for the <\/span><\/span>next six months in the first instance<\/span><\/span>through an Executive Order<\/span><\/span>. \u00a0This resonates <\/span><\/span>with the <\/span><\/span>current <\/span><\/span>federal <\/span><\/span>government\u2019s<\/span><\/span> commitment<\/span><\/span> to alleviating the current <\/span><\/span>hardships <\/span><\/span>on<\/span><\/span> the citizens<\/span><\/span> and <\/span><\/span>the burden on <\/span><\/span>businesses<\/span><\/span>. <\/span><\/span>It gratifying that the Presidential Committee on Fiscal Policy and Tax Reforms had made similar recommendation. The <\/span><\/span>Organized<\/span><\/span> private Sector [OPS] had also strongly advocated in the same vein.<\/span><\/span> \u00a0The current customs duty exchange rate on the Nigeria Customs Service portal is <\/span><\/span>N1578\/$. \u00a0This rate has been changing almost weekly, which is not good for the investment environment.<\/span><\/span><\/p>\n It is important to clarify that t<\/span><\/span>his <\/span><\/span>proposition <\/span><\/span>is without prejudice to the ongoing <\/span><\/span>foreign exchange <\/span><\/span>reforms of the present administration.<\/span><\/span> C<\/span><\/span>ontrary to concerns expressed in some quarters, the adoption of lower exchange rate for computation of customs duty would not undermine the current <\/span><\/span>foreign<\/span><\/span> exchange reforms. <\/span><\/span>It is not a request for a concessionary exchange rate for forex allocation. \u00a0<\/span><\/span><\/p>\n We are dealing with <\/span><\/span>two separate issues<\/span><\/span> here<\/span><\/span>. One is <\/span><\/span>about<\/span><\/span> foreign exchange policy, the other is purely a trade policy matter. \u00a0<\/span><\/span>The responsibility of the CBN should end at the point of opening of Form M for importers within the context of extant foreign exchange policy.<\/span><\/span> \u00a0<\/span><\/span>All other matters<\/span><\/span> relating to international trade <\/span><\/span>should be <\/span><\/span>within the remit<\/span><\/span> of the Federal Mi<\/span><\/span>n<\/span><\/span>istry of Finance and the <\/span><\/span>Federal<\/span><\/span> Ministry<\/span><\/span> of Trade and Investment.<\/span><\/span> \u00a0These are the institutions statutorily responsible for trade policy issues. \u00a0The determination of the customs duty exchange <\/span><\/span>rate by the CBN is an intrusion into trade policy space which needs to be urgently corrected.<\/span><\/span><\/p>\n Meanwhile, in order t<\/span><\/span>o permanently address this matter, it might be necessary <\/span><\/span>to amend the <\/span><\/span>Customs A<\/span><\/span>ct<\/span><\/span> to move the <\/span><\/span>responsibility<\/span><\/span>