Dr. Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), has expressed concern over the significant burden imposed on the business community by the frequent changes in the customs duty exchange rate.
In a statement released to LEADERSHIP, Yusuf highlighted the adverse effects of these changes, stating that they contribute to high volatility in cargo clearing costs, exacerbate inflationary pressures, and heighten investment risk, particularly in the real sector of the economy.
Yusuf emphasized the detrimental impact of the frequent changes on production, planning, and other activities in the real sector, describing the situation as profoundly detrimental to the Nigerian economy.
He pointed out that in the first quarter of the year, there were twenty-eight changes in the customs duty exchange rate, with the frequency expected to increase in April. As of May 1, 2024, the rate had surged to N1373.65 per dollar ($), compared to less than N1200 per $ just a few days earlier.
Yusuf underscored the challenges faced by investors in planning under such unstable circumstances, noting that the situation has introduced unprecedented levels of uncertainty and unpredictability into international trade dynamics.
The CPPE called on the Central Bank of Nigeria (CBN) to adopt a framework aimed at minimizing volatility in the customs duty exchange rate. The proposed framework suggests adopting a quarterly customs duty exchange rate, following consultation with fiscal authorities. The CPPE proposed an initial rate of N1000 per $ customs duty exchange rate.
Yusuf emphasized the importance of consultation with fiscal authorities due to the trade policy implications of such decisions. He stressed the need for effective coordination between fiscal and monetary authorities to support the growth aspirations of the present administration and bolster investor confidence in the economy.
