Imported Goods Prices Set to Rise as FG Adjusts Customs Exchange Rate 

By Adeke Chukwuka

Nigeria’s Federal Government alters Nigerian Customs Service (NCS) exchange rate calculations, shifting from ₦770.88/$ to ₦783.174/$, a significant policy adjustment following the Central Bank of Nigeria’s (CBN) Naira floatation five months ago, as reported by The Guardian.

The modified exchange rate, now visible on the NCS portal, aligns with the CBN’s recent authorization for banks to sell foreign exchange at market-determined rates. This move towards a unified exchange rate, echoing President Bola Tinubu’s pledge, aims to promote economic stability.

Nevertheless, this action, combined with existing economic difficulties and fiscal policies, has led to a 70% decline in importation, causing increased clearance costs in Nigeria compared to other African nations.

Minister of Marine and Blue Economy, Adegboyega Oyetola, addressed port congestion concerns in a recent meeting with stakeholders, highlighting challenges with abandoned and overdue cargoes, some lingering for over a decade, and emphasizing the urgency of decongestion initiatives.

Reacting to this situation, the Nigerian Customs Service has established a committee aligned with the new Customs Act, empowering it to dispose of containers exceeding their allocated time at ports. Comptroller-General of Customs, Adewale Adeniyi, emphasized the pivotal goal of port decongestion, committing to heightened efficiency and improved trade facilitation.

Importers and clearing agents must now adjust to the new exchange rates when providing quotes for new jobs, potentially resulting in expanded business costs. The economic repercussions are evident, raising worries about the impact on used car and other goods prices. 

While the government aims to enhance revenue collection, with the NCS noting a 66.5% revenue increase from July to October 2023, industry experts caution that 2024 may usher in heightened hardships for the masses.

Escalating prices and their business repercussions might breed discontent, posing challenges for economic players and causing disruptions across sectors. Analysts contend that the government should show sensitivity to these economic challenges and contemplate implementing relief measures for citizens and businesses.

The increased costs resulting from stringent fiscal policies could exacerbate an already fragile economic situation, potentially affecting both local and international trade. As stakeholders navigate these shifts, the nation remains vigilant about the evolving economic landscape.