CBN Urges NCS Not To Calculate Duty On Prevailing Exchange Rate But Use The Rate In The Importers Form M; CG Adeniyi Strengthens Customs Management Team

 By Stephen Ubanna

Given the rising cost of goods and services due to the frequent use of different foreign    exchange rate of the naira to the North American country of the United States, US, dollar and other word major currencies in calculating the country’s import duties may have informed why the Central Bank of Nigeria, CBN, under the close watch of Olayemi Michael Cardoso, have stepped in to address the situation.

The continued devaluation of the naira may have encouraged the Leadership of the CBN, to repeatedly change the exchange rate used by the Nigerian Customs under the close watch of Bashir Adewale Adeniyi, MFR, in calculating duties at the nation’s seaports, airports and Land border areas over the years.

The Nigeria apex Bank appears to have an answer in addressing the rising cost of imported goods into the country by directing  by directing Adeniyi, the Customs Comptroller General  and who in turn had passed the information down the line  to the the Area Controllers of the Customs revenue generating  Commands across the country,  to use  the Forex  on the date   that importers with their Agents  submit  their Form M , for cargoes clearance  and import duty assessment.

Going by the CBN, new policy,  importers  will continue to pay  an Administrative  charge  of Free On Board, FOB, value of all imports  based on the exchange rate  on ‘’the approved- Form M’’.

The action , according to Hassan Mahmud, the CBN, Director of Trade and Foreign Exchange Department,  is intended ‘’to address  the instability  and frequent modifications  in the Customs  portal  about the Liberalization  of the Autonomous Foreign Exchange Market, AFEM.’’ The computed value  of imported cargo , a Customs source told The Value is the sum of  production cost,  meaning the  cost of materials and fabrication  and other  processing raw materials  deployed  in  manufacturing the imported goods such as lumber, steel, lead, clay among others. 

.The CBN Director  of Trade ad Foreign Exchange Department  who was said to have  signed a statement   announcing the new policy to be used by Adeniyi led Nigerian Customs Service, NCS,  may have given importers with their Agents a cause to be cherry  when he stated that Management  took the bold initiative because  ‘’the continuous  use of different  foreign  exchange rates  in calculating Customs duty had resulted in regular increases in the ultimate cost of both local and imported cargoes in Nigerian markets. Recall that there was a particular week the CBN exchange rate used in calculating import duty change more than twice.

Wale Adeniyi: CG, Customs

Peter Obi , a former governor of Anambara state and Presidential Canditate of Labour part, LP, in the last February 25, 2023, election had said that the frequent  upward review  of  forex in calculating the country’s import duty by the CBN,   has continued   to raise concerns   for the business community   which was not too good for the economy.

He had said that Nigerian Customs Service, NCS, calculating import duty using a rate that is different from the Form M had posed serious challenge to importers which was said to have resulted in losses to the nation. He noted that using the exchange rate of the naira to the US dollar that was different from the Form M  was what  had fueled the inflationary   rate in the country and the basis for the increasing  high cost of living in the country.

The former LP , Presidential Candidate averred that such arbitrary charges  was what had led  to  further closure of businesses and attendant  loss of jobs.  According to the forme Anambra state governor, at the time of the initiation  of the business  to import the cargoes,  calculations  including duties were made based on the prevailing exchange at AFEM.      

Obi: says Customs use of prevailing foreign exchange rate in calculating duty has killed many businesses

Many believe that for the CBN directive to use the forex on the Form to calculate import duty, it would have reverted to the use of the current exchange of the naira to the US dollar which is currently between  N1,537.037 to N1,885.00 from the previous N1, 470.00 to calculate the duty for imported cargoes that would have further discouraged the importers in their business.  

As a prelude to ensuring that naira appreciates at both the AFEM and Parallel, popular black foreign exchange market, to reduce the rising cost of both   imported and locally manufactured   goods in the country,  the CBN , which has the backing of Tinubu, the former Lagos state  governor, had was said to have issued a new order  to the Nigerian Communications Communication Commission, NCC, to block  platforms suchBinance,  Foretime, OctaFX, Crpto, FXTM, Coinbase and Kraken , where Nigerians buy and sell dollars.    

At present the country’s import duty as calculated by the Customs personnel at the nation’s seaports, airports and Land border Areas by summing up surface duty of   the Cost Insurance Freight, CIF, value of the goods, surcharge, Administrative charge, CISS, and Economic Community of West African States, ECOWAS, Trade Liberalization Scheme, ETLS, and 7.5 % Value Added Tax, VAT, using the foreign exchange rate on the e-Form M. The Customs Authorities   had made clear to those that cares to listen that it shall be the duty of the importer’s bank through which the Form M was processed  to collect the amount of duty  as assessed , if a designated Bank .

It stated further that  for the  e-Form M  transactions  processed  by  designated banks , copy of  payment receipt shall be made available  to the processing bank  by the importer.

Aware of the country’s enormous economic challenges, the Customs Comptroller General,  has introduced two  new Management  members in acting capacity  and deployment of four others  to fortify  strategic operations and optimize the service  delivery across various departments.Abdullahi Maiwada, a Chief Superintendent of Customs and the agency spokesperson may have spoken the mind of the Customs Comptroller General when he said  that  ‘’the newly   appointed   new Management team members  are poised  to steer  the service towards  enhanced  efficiency and effectiveness’’.

The Customs helmsman had said that the diverse expertise   and proven track records of the newly appointed Management team members    are expected to inject fresh momentum into critical Areas of the service such as revenue generation, anti-smuggling and trade Facilitation.

The two newly appointed Management team members in acting capacities were Mohammed Bello Jibo,  who was said to have been deployed as the Coordinator , Customs   Zone A office,  , Lagos, JP Ajoku,  Straegic Research and Policy.  The four other Management Team members, all ACGs, that were said to have been redeployed to other departments include IQ Ogbudu, Excise , Free Trade Zone and Industrial incentives; IO Babalola, Coordinator, Zone B;  HJ swomen, Coordinator, Zone A and  A, Abdulazeez, Coordinator, Zone D.

The Customs Comptroller General  who could not hide his feelings   was to have urged the  Management  team members appointees  ‘’to embrace  their  new roles  with renewed commitment ‘’ , noting that ‘’the pivotal  role of the service  in advancing  national interests cannot be compromised’’. Appealing to the newly officers ‘’to uphold the highest standards of integrity, professionalism and service delivery’, he said that is the only way to safeguard the nation’s economic interests, fostering international trade and ensuring compliance with regulatory frameworks’’.

The Athletic –built Customs Comptroller General, is optimistic that ‘’with the strategic enforcement of its Leadership, the service is posed ‘’to navigate evolving challenges and seize opportunities for growth and development’’.

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