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Imports: How Customs Duties Exchange Rate Hikes Influence Higher Market Prices

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By Emmanuel Agaji

Many Nigerians are currently languishing in extreme poverty and this has in turn led to reactions from all parts of the country.

Perhaps, the problem started with the withdrawal of petroleum subsidy.

The subsidy withdrawal as being feared over the years has come with pains of more transport costs which in turn led to rise in prices of goods in the market. But that was not all. The fall of Naira in value to other foreign currencies has been devastating for months now.

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The fall has been with speed. Early last year, the rate of Naira to Dollar was about N700/$1. Expectations were therefore that the new government would work out a way in which the exchange rate would come down. But instead of coming down, the dollar rate has kept rising to what it is now – over N1,900/$1. Observers hold the view that the Dollar can be said to have arrived at the doorstep of N2,000/$1 and will soon begin a fresh journey to N3,000/$1. The result is that importers and manufacturers have in turn continued to increase prices of their products on the basis of dollar exchange rate to Naira.

Perhaps what has been a sad event is the rate at which there is fluctuation in the rate of dollar to Naira.

The Naira keeps falling in value everyday to the dollar and other currencies, including those of the neighbouring West African countries.

The current situation is that many citizens of other African countries who have been doing business in Nigeria are now returning to their home countries because of the fact that the Naira has fallen far below their own currencies. In other words, their currencies have become far stronger than Naira.

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Critics believe the devaluation of Naira against the Dollar and other currencies will continue to affect the economic life of the people negatively.

The rise in prices of goods in the market has left many dumbfounded. To worsen the matter is the Customs duties exchange rate introduced by the Central Bank of Nigeria.

This is the rate the Nigeria Customs Service uses in calculating duties on imports. First, it was about N1,357.50 before it rose to N1,413.62. It later went up to N1,617.00 with information later that it went down to about N1,500.00.

The rates have been introduced for more than 10 times in a month. While it is believed that with this scenario the Customs will make more revenue this year, triple what it made last year, yet such gains will have no positive impact on Nigerians.

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This is because prices of goods have continued to go up. Traders have become confused because every minute importers and manufacturers come up with new prices in relation to the prevailing exchange rate. To observers, this is destroying businesses.

The policy has made international trade a big task because of the continued rising of the dollar rate against the poor value of the Naira. With almost everything being imported, including farmers relying on fertilizers and other foreign inputs, prices of food and other commodities have become so high for the low income group.

This explains the reason for the protest in many parts of the country. Everyone appears sad. This includes the importers, manufacturers who also import raw materials for production.

Dealers on different goods, wholesalers and retailers are all worried. The reason is that the goods are changing in prices every 30minutes as traders monitor the dollar rates. The final consumers are bitter as they find it difficult to pay for most of the goods they would want to buy. This has made market very dull.

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Even traders in the market are no longer buying to stock-up as they are afraid these goods are too expensive and final consumers are not ready to buy. Keeping them in the store for too long means taking risk of damages and therefore losses of investment.

As experts suggest, what government should do is for the CBN to discuss with the management of the Customs Service and arrive at one exchange rate under which duties can be calculated. Although it was gathered that the CBN has agreed that the rate of duties to be paid by importers will be based on the prevailing exchange rate when the Form M was opened, importers still argue that this policy will continue to affect businesses and prices of goods in the market.

According to experts, this will not bring prices of goods down as importers will claim they sourced the foreign exchange at high rate of dollar exchange rate. An importer said if the government wants prices of goods to be affordable, CBN should rather peg the rate used in calculating duties at about N1,200 for it to be uniform for all.

Other possibilities for prices of goods to come down is for the government to consider ensuring that fuel prices go down by using the gains of the subsidy removal to encourage private refineries to come on board as quickly as possible.

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These refineries should be expected to reduce their fuel prices since they source crude oil to be refined locally. Government should also not make the mistake of relying on big time monopolists who are likely to look for ways to suffocate other small companies.

This was what happened in the case of cement manufacturing over the years which prices have now gone out of the reach of the low income earners. Government should be fast in acting outside the box to arrest the issue of continued rise in the prices of goods.

The prices of food and other goods in the market should be affordable and the solution is in addressing the continued fall of Naira value to the Dollar and other currencies.

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IPOB accuses NAFDAC operatives of theft during Onitsha drug market raids

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Proscribed Igbo separatist group, the Indigenous People of Biafra (IPOB), has accused officials of the National Agency for Food and Drug Administration and Control (NAFDAC) of looting goods at the popular Onitsha drug market known as Ogbo Ogwu, located at Head Bridge, Onitsha, in Anambra State.

The Biafra agitators in a statement on Thursday by its Media and Publicity Secretary, Emma Powerful, said the raids were carried out at night under the guise of searching for fake drugs stored in the market.

In the statement, Powerful also accused the NAFDAC operatives of allegedly blocking all CCTV cameras in the market before breaking into shops and carting away goods, which they later branded as fake drugs.

He further alleged that in all the raids and seizures, NAFDAC did not provide evidence of burning the confiscated drugs as claimed.

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The group questioned the agency’s motives, asking why the raid was conducted at midnight in the absence of shop owners and why surveillance cameras were deliberately obstructed, and demanded answers on how NAFDAC determined that the seized drugs were counterfeit and where the confiscated goods were deposited.

The group stated that though it does not endorse the proliferation of fake drugs, but stressed that while tackling the menace of fake drugs is crucial, the regulatory agencies must act with professionalism and respect for citizens’ rights.

“IPOB condemns the peddlers of fake drugs. At the same time, we condemn the criminal raids by NAFDAC on people’s shops in their absence while blackmailing all the traders as dealers of fake drugs.

“The action of blocking the surveillance cameras with black nylon bags is a criminal act, and in every shop at the market the National Agency for Food and Drug Administration and Control broke into people’s stores and shops.

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“This criminal activity by the notorious NAFDAC officers was conducted in the middle of the night.

“NAFDAC looted people’s shops in Onitsha and branded all the drugs they carted away as fake drugs without showing the evidence that the drugs were indeed fake.

“The questions that NAFDAC must answer are: Why raid people’s shops in the middle of the night in the absence of the owners?

“Why did NAFDAC criminal officers block the cameras in people’s shops in the market while conducting those raids?

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“How did NAFDAC determine whether the drugs they carted away were fake or genuine?

“Where did NAFDAC deposit all the drugs they claimed were fake.
Why did NAFDAC seal the entire drug market punishing both the guilty and the innocent?

“IPOB does not encourage or support the inimical activities of fake drugs peddlers in the Onitsha market, but NAFDAC must apply citizens’ rights, decorum, and professionalism and not act like a rogue agency.

“The Nigerian government agencies always apply a heavy-hand approach at any given opportunity against the Ndigbo and the carrot approach when dealing with other ethnic groups.

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“NAFDAC should do well to return the genuine goods their rogue staff looted from the owners at Onitsha’s Head Bridge Drugs market or Ogbo Ogwu,” the group said.

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FG to arraign arrested bomb manufacturers as US partners on IED Centre

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The United States (US) is working closely with the Federal Government to establish a counter Improvised Explosive Device (IED) centre in Nigeria.

The centre which will be similar to one set up by Britain in Maiduguri, Borno State, is to help Nigeria contain indiscriminate production of IEDs and boost anti-terrorism war in the country.

Coordinator of the National Counter Terrorism Centre (NCTC) Maj.-Gen. Adamu Laka made this known during a symposium on Countering Improvised IEDs in Abuja yesterday.

The symposium was organised by the centre, a unit in the Office of National Security Adviser(ONSA) in collaboration with the US and British governments.

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Maj.-Gen. Laka stated the Federal Government’s collaboration with foreign partners was yielding positive results.

He said: ”What is the new thing that they(US) are going to do now?

‘’Like the British Government has established a counter IED centre in the Northeast, particularly in Maiduguri, we are working closely with the US Government on that also.

“They(Britain and U.S) have been training our troops for the past four years; and this has greatly impacted the proficiency of our troops in identifying IEDs, preventing such incidents and also reacting after such an incident.

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‘’Samples are taken from the IED site to our laboratory at the centre to find out those materials that are used so that we will be able to know where our focus will be on restricting such materials getting into the wrong hands,” HE told reporters.

The NCTC boss revealed that some suspected manufacturers of IEDs were already being detained preparatory to their arraignment. He also said that ONSA has taken steps to regulate the use of materials like urea fertiliser in the Northeast, which terrorists use to manufacture explosives

Experts identify IEDs as a major threat to troops, civilians and infrastructure in the fight against terrorism in the country.

The NCTC Coordinator said: “ Insurgents can get things like urea fertiliser from the markets to manufacture IEDs and so on. But we won’t relent on our part. We will keep educating the populace.

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“And on punishments for those who are manufacturing these IEDs, we have identified a few and they are presently awaiting to go through the judicial process.

‘’We won’t just punish them on our own. Nigeria is a signatory to international human rights laws and best practices, and so on. So we will follow the rule of law. They are innocent until proven guilty. So we have to go through the judicial process.”

Maj.-Gen. Laka assured Nigerians that the NCTC would remain proactive in its approach to tackling the menace of IEDs in the country.

“We are developing a biometric database at the Office of the National Security Adviser. We are working closely with all the security and intelligence agencies. This biometric database is going to be used to identify those who are experts in manufacturing IEDs.

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‘’We are working closely with the US and British governments on that and other security and intelligence agencies,’’ he said.

The NCTC boss stated that the symposium was both timely and critical as it provided a platform for experts and stakeholders to deliberate on innovative strategies to counter-terrorism.

He said: “Our collective goal is to enhance national capabilities in preventing, detecting, and responding to Improvised Explosive Devices incidents.

“The provision of external expertise in this field would also complement Nigeria’s experience and proficiency in assessing whether a National Counter Improvised Explosive Devices Strategy would be beneficial for implementation in Nigeria. We must examine the existing gaps, address the vulnerabilities in our operational environments, and improve coordination among key agencies.”

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US Ambassador to Nigeria Richard M. Mills, Jr. said Washington would continue to assist Nigeria to defeat the challenging threat of IEDs.

Mills was represented by the US Defence Attaché to Nigeria. Col. Thomas Brooks

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Bill to designate official roles to Traditional Rulers scales second reading in Senate

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A bill which seeks to establish the National Council for Traditional Rulers with the objective of formally giving monarchs and community heads important official roles has scaled second reading in Senate.

The bill was sponsored by Senator Simon Lalong (Plateau South).

The Bill generated widespread debate among lawmakers when it was first introduced, with concerns expressed over potential conflicts between the responsibilities of traditional rulers and elected officials at the Local Government level.

But Lalong, a former Governor of Plateau State, noted that present day traditional rulers are well-educated and can provide valuable counsel on issues such as insecurity and other national matters, which could assist the government in addressing the needs of the citizens.

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The former Director-General of the Tinubu-Shettima Campaign Council also asserted that they would be useful in the areas of security and conflict resolution in local communities.

According to him: “When there are crises and killings, the first thing people say is ‘let’s hold the traditional ruler responsible.’ It is true in their communities, they know everybody, including the criminals. But we expect them to be the ones running up and down.

“We need to charge them with responsibilities where they will be committed. But for now, you can’t hold them responsible. As the director-general of the campaign for Asiwaju and Kashim, we went around having some meetings with these traditional rulers.

“Every time we want them to participate, they ask to be given a role. So, it was also part of our (electioneering) campaign.

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“So, I don’t see how we can jettison that when we are struggling for a constitutional amendment with respect to security. If we don’t have security, every other thing we are doing is rubbish.”

However, some senators still expressed concerns about the possibility of overlapping duties and emphasised the need for the bill to clearly delineate the roles of traditional rulers and government officials to avoid confusion.

Senate President Godswill Akpabio stressed the importance of clearly defining the functions of traditional rulers within the bill.

He also suggested holding a public hearing to gather input before the bill proceeds to a third reading.

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Akpabio noted the value traditional rulers could bring in providing counsel on a wide range of issues that could benefit the government.

Akpabio referred the bill to the Senate Committee on Establishment and Public Service Matters for further legislative work and to report back in four weeks.

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