The presidential candidate of the Labour Party in the 2023 presidential election, Peter Obi, has urged the federal government to stop the ‘arbitrary and ever-increasing customs duties’’.
In a statement published on social media, Obi stated that the increase in customs duties is now negatively impacting businesses and the cost of items. He also mentioned that if not checked, it would lead to further business closures and attendant job losses.
The Central Bank of Nigeria (CBN), on Wednesday, February 14, readjusted the Customs exchange rate from N1444.56/$1 to N1,481.482/$1.
The exchange rate was reviewed upward by N36.922, that is, 2.56 percent against the last increment, in the early hours of Wednesday, February 14, 2024.
The adjustment was the 5th done in 12 days and the 9th since the beginning of the administration of President Bola Tinubu in May 2023.
‘’I wish to urgently call on the Federal Government of Nigeria to end the inconsistency in duty charges as it is affecting the general business atmosphere in the country. The federal government should stop the arbitrary and ever-increasing customs duties, as they are now negatively impacting businesses and the cost of items, and this portends a huge danger to the economy.
A situation where at the point of initiating importation, Form M and other documents related to importation are based on a particular rate of exchange, for example, N1000 to $1, being the prevailing exchange rate at the time which the importer of goods was used to calculate the entire process, from the import initiation to receipt of goods in his warehouse. Then suddenly, when the goods arrive in Nigeria, and duties are calculated at different rates, say N1400 to $1, it becomes a serious business challenge that results in business losses. Worse still, it directly fuels the inflationary spike which is the basis of the increasing cost of goods and living.
Such arbitrary charges will obviously lead to further closure of businesses, and attendant job losses. This is because at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate, and the prevailing market prices. If this situation is not corrected, our importers may resort to using ports of nearby countries, a situation that will leave our ports under-productive, and further deepen our economy into a worse situation as a result of loss of revenue.
The government should also show consistency in its policies, as this will help with economic forecasting and business planning. Businesses are dying and manufacturers are shutting down because of the poor and inconsistent economic policies of the government.
All efforts of the government should be directed at supporting businesses, especially those in the manufacturing sector, to keep their businesses afloat and keep the economy growing, as the small business sector remains the most critical engine of economic growth.
We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment, and reasonable cost of living,”Obi’s statement reads.
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