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Import Duties to be calculated on basis of prevailing exchange rate -CBN tells importers

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By Emmanuel Agaji

The Central Bank of Nigeria (CBN) weekend ended the anxiety and about two months of confusion suffered by importers and customs agents on what foreign exchange rate their import duties should be assessed.

This was as a result of fluctuations in the exchange rate for Customs duty payments.

The apex bank said on Friday said that the prevailing exchange rate on the date the Form M was opened for the importation of goods will be adopted for calculating duties on imported goods effective Monday, February 26.

This was contained in a circular signed by the the Director Trade and Exchange Department of CBN, Dr Hassan Mahmud.
Mahmud said in the circular that the Customs is free to henceforth accept the exchange rate applicable on the date the importer opens his Form M, until the cargoes come into the country and cleared from the ports.
Part of the circular reads:

“Following the liberalization of the FX market on Willing Buyer — Willing Seller trading principle,
the Central Bank of Nigeria has noted the concerns of Importers of goods and services in the irregular changes in the Import Duty Assessment levies applied by the Nigeria Customs Service
These developments have further built uncertainties around the pricing structure of goods and services in the economy and creating abnormal increases in the final sale prices of items, which is largely driven by uncertainties, rather than traditional market fundamentals, with implications to near term inflation trend.

“To this effect, the Central Bank of Nigeria wishes to advise that the Nigeria Custom Service and other related Parties adopt the closing FX rate on the date of opening Form M for the importation of goods, as the FX rate to be used for Import Duty Assessment. This rate remains valid until the date of termination of the importation and clearance of goods by importers.

“This would enable the Nigeria Custom Service and the importers to effectively plan appropriately and reduce the uncertainties around varying daily exchange rate in determining their revenue or cost structure, respectively.
“Therefore, effective 26″ February 2024, the closing rate on the date of opening of Form M for the importation of goods and services would be the rates that would apply for the assessment of import duty.

This supersedes the requirements of Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual. (Revised Edition), 2018.

While the CBN is mindful of the initial volatility and price distortions in the aftermath of the FX market liberalization, the Bank is confident that these reforms, would in the medium term, ensure stability in the market and entrench market confidence necessary to attract investment capital for the growth and development of the Nigerian economy”.

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Elon Musk threatens to ban Apple products over Open AI integration

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Billionaire entrepreneur, Elon Musk said on Monday that if Apple integrates OpenAI into its operating system, he will prohibit the use of Apple products across his companies.

Musk, who owns Tesla and other ventures, declared that anyone visiting his companies would be required to store their Apple devices in a Faraday cage, effectively blocking electromagnetic transmissions.

Musk’s statement comes as Apple announced its partnership with OpenAI, which includes the integration of ChatGPT powered by GPT-4 into some of its software, including the new and improved Siri.

“If Apple integrates OpenAI at the OS level, then Apple devices will be banned at my companies,” Musk wrote. “That is an unacceptable security violation,” the rocket maker’s owner, SpaceX, said on X (formerly Twitter).

Earlier on Monday at its Worldwide Developers’ Conference, Apple revealed that it will incorporate its new AI software, Apple Intelligence, into the iPhone, iPad, and Mac.

It also announced a collaboration with OpenAI to integrate ChatGPT, powered by GPT-4o, into some of its applications, including the upgraded Siri.

According to Apple, the ChatGPT integration will be accessible for free without an account in iOS 18, iPadOS 18, and macOS Sequoia later this year.

Apple said, “When a user grants permission, Siri can tap into ChatGPT’s broad world knowledge and present an answer directly.”

The billionaire denounced the partnership, saying he is concerned about the iPhone maker partnering with a third-party AI that it “doesn’t understand” and “can’t themselves create.”

“It’s patently absurd that Apple isn’t smart enough to make their own AI, yet is somehow capable of ensuring that OpenAI will protect your security and privacy,” Musk further tweeted.

In early March, Musk filed a lawsuit against OpenAI, a company he co-founded in 2015, and its CEO, Sam Altman, alleging that they had strayed from the original mission of developing AI for the benefit of humanity rather than for profit.

Musk has also launched his startup, xAI, aiming to rival OpenAI and create an alternative to the popular chatbot.

Last month, The PUNCH reported that xAI secured $6bn in a Series B funding round, with backing from investors such as Valor Equity Partners, Andreessen Horowitz, and Sequoia Capital, among others.

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NNPCL denies N3.3trn inflated fuel subsidy allegation

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The Nigerian National Petroleum Corporation Limited, NNPCL, has debunked allegations that it inflated subsidy claims by N3.3 trillion.

NNPLC spokesperson Olufemi Soneye disclosed this in a statement on Monday.

This comes amid an allegation that a forensic audit by KPMG, a global accounting firm, has uncovered an N3.3 trillion discrepancy in the fuel subsidy claims made by NNPCL during former President Muhammadu Buhari’s administration.

However, Soneye said all previous subsidy claims are verifiable, and NNPCL never inflated subsidy claims to the federal government.

He explained that it is not aware of any audit, as alleged by media reports and that the company will not be drawn into the politics of fuel subsidy as it currently operates as a commercial entity under the Petroleum Industry Act 2021.

Soneye said in the statement: “NNPC Ltd. conducts its businesses accountably and transparently in keeping with international best practices and has, at no time, inflated its subsidy claims with the Federal Government. All previous subsidy claims by the company are verifiable, as relevant records and documents have been sent to relevant authorities and agencies.

“NNPC Ltd. is neither aware of any audit of its subsidy claims nor the probe ensuing therefrom and wishes to state categorically that both ridiculous claims are products of the febrile imagination of the reporters and their respective media houses.”

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Currency outside banks declined to N3.61tn in April

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Latest data from the Central Bank of Nigeria has indicated that currency outside of bank vaults declined by 0.62 per cent to N3.61tn in April from N3.63tn in the previous month.

This bucks the pattern of steady increase observed since the beginning of the year.

Despite the decline, over 90 per cent of the currency in circulation was still outside bank vaults.

As of April, the currency in circulation stood at N3.92tn, higher than N3.87tn in March.

The currency in circulation has been increasing month-on-month despite the CBN monetary policy tightening, which has seen the benchmark interest rate set at 26.65 per cent.

Also, the latest money and credit statistics data from the CBN showed that Nigeria’s money supply rose to a historic high of N96.97tn in April 2024, reflecting year-on-year growth of 73 per cent from N56.05tn in the same period of the previous year.

On a month-on-month basis, it was a five per cent increase from the previous decline recorded in March at N92.33tn.

This growth comes in the face of the Monetary Policy Committee’s hawkish stance aimed at controlling inflation.

In their statements, one of the members of the Monetary Policy Committee of the CBN at the March meeting, Muhammad Abdullahi, posited that the apex bank had identified high currency outside banks as one of the monetary drivers of the country’s inflation.

He said, “From available data, prices of domestic food items remain the major driver of headline inflation because of supply shortages and high cost of logistics and distribution.

“While this cannot be directly influenced using monetary policy tools, the bank’s response to the drivers of headline inflation is targeted at addressing identified monetary drivers such as money supply growth, exchange rate depreciation and Currency-Outside-Banks, the combined impact of which will dampen inflationary pressure significantly.”

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