Reaction as CBN Slashes FX Duty Rates

The Central Bank of Nigeria (CBN) has slashed the exchange rate used to calculate import duties by 5.3 percent.

_____The development was posted on the official trade portal of the Nigeria Customs Service.

The reduction comes after a period of relative stability in the exchange rate between the Naira and the United States dollar.

The rate for calculating customs duties was N1,544.081 per dollar as at yesterday. This translates to a 5.3 percent decrease compared to the previous rate of N1,630.159 to a dollar used on Friday.

_____In simpler terms, importers will now pay N86.08 less per dollar when clearing their goods through the ports. This change reflects the CBN’s ongoing efforts to ensure that import duties accurately reflect the prevailing exchange rate.

_____By adjusting the rate downward, the CBN aims to ease the pressure on companies importing goods. The expectation is that this will lead to a more predictable and stable environment for international trade.

On February 23, 2024, the CBN issued a circular in response to concerns from importers regarding fluctuating import duty.

_____Key points of the CBN circular include acknowledging market volatility and price distortions due to the liberalisation of the foreign exchange market, addressing importers’ concerns about uncertainties caused by fluctuating exchange rates affecting duty calculations.