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.
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.
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’’.
