– Forex scarcity takes a toll
– Import volumes crashes
Vincent Toritseju
Lagos — The depreciation of the naira has impacted businesses across the country with the scarcity of foreign exchange, forex, resulting in reduced import volumes.
Currently, there is growing concern about the ability of the Nigeria Customs Service (NCS) to meet its revenue target of N5.1 trillion set by the Federal Government.
Some importers have even stopped trading altogether because of the difficulty in accessing foreign currency and the recent hike in import duty rates. This decline in imports has resulted in a lack of clearing jobs and has affected the ability of traders to continue their businesses.
A former Vice President of the Association of Nigerian Licensed Customs Agents, Mr. Kayode Farinto, has expressed his concern about the dwindling level of importation, stating that most imports in recent times have been raw materials for the production of other goods. These raw materials attract a lower duty rate of five percent, which could further impact the N5.1 trillion revenue target for the Nigeria Customs Service.
To encourage importers and traders to continue their businesses, Farinto has called on the Federal Government to introduce measures that would provide incentives. One such measure could be revising the calculation of Value Added Tax (VAT), which currently goes against the principles of international trade.
Similarly, Mr. Eugene Nweke, Secretary of the Nigeria Customs Consultative Committee, has stated that the economic difficulties faced by the current government are a consequence of the actions of the previous administration. He believes that the monetary policy in Nigeria has been negatively influenced by preferential treatments and regulatory laxity.
Since July 2023, the NCS has raised the custom duty rate more than seven times. The most recent increase was made in mid-December of last year, and while importers are still having difficulty finding a balance, the customs duty tariff was raised once more. This is the pinnacle of annoyance because, in the end, the masses—the end users—will bear the brunt of these consequences. However, the Vice President of ANLCA, Mr. Segun Oduntan, has advised traders not to blame Customs for the increase in import duty rates, as they are only implementing government fiscal policies.
Overall, the continuous depreciation of the Naira against the dollar, coupled with increased import duty rates, is leading to a decline in the importation of goods and services in Nigeria. This trend is worrisome for the Nigeria Customs Service, as it may struggle to achieve its revenue target for the year.
Meanwhile, the Comptroller General of the Nigeria Customs Service, NCS, Mr. Adewale Adeniyi has called on the business community to increase export trade so as to earn more Dollars and boost the Naira’.
Speaking during a visit to some ports in Lagos, Adeniyi said that virtually all the terminals he visited were empty adding only increased export can change the trend and reverse the inflationary trends currently being experienced in the country.
