News

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

Published

11 months ago

February 26, 2024

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.

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.

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.

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.

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.

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.

News

Eurocham Nigeria Hosts 2025 Stakeholder Conference, Explores Business Growth in Post-Reform Era

Published

7 minutes ago

February 5, 2025

Gloria Ikibah

By Gloria Ikibah

Business leaders, policymakers, and members of the diplomatic community recently gathered in Lagos for the 2025 annual stakeholder conference of Eurocham Nigeria (The European Business Chamber) to discuss the impact of Nigeria’s economic reforms on trade, investment, and sustainable growth.

With the theme “Achieving Growth Post-Reforms,” the conference provided a platform to explore opportunities across key sectors, including trade, aviation, tourism, energy, finance, and workforce transformation.

In his welcome address, Eurocham Nigeria President, Mr. Yann Gilbert, emphasized the organization’s role in championing policies that foster economic progress and strengthen EU-Nigeria business ties.

Delivering a keynote speech, Honorary President of Eurocham Nigeria and European Union Ambassador to Nigeria and ECOWAS, Mr. Gautier Mignot, reaffirmed the EU’s dedication to Nigeria’s economic transformation. He outlined initiatives aimed at deepening trade relations and unlocking investment potential, introducing the EU-Eurocham Support Grant as a mechanism to boost private-sector growth.

In a second keynote address, Minister of Aviation and Aerospace Development, Festus Keyamo (SAN) who was represented by the Special Adviser on Aviation and Aerospace Development, Ms. Janet Oputa, highlighted the aviation sector’s role in post-reform economic expansion. Speaking on “Aviation: A Catalyst for Growth,” she detailed ongoing infrastructure projects and emerging investment opportunities in Nigeria’s air transport industry.

A key feature of the event was a presentation by Ms. Danelee Masia, Director Economist for South Africa and Sub-Saharan Africa at Deutsche Bank, titled “Nigeria: A Path to Renewed Growth.” She provided a macroeconomic analysis of Nigeria’s recovery, focusing on fiscal reforms, foreign exchange policies, and investment trends shaping the nation’s future.

Eurocham Nigeria reaffirmed its commitment to strengthening partnerships between Nigeria and the European business community. The organization pledged continued advocacy for pro-business policies, regulatory enhancements, and economic cooperation initiatives that benefit both Nigeria and the EU.

News

TAC Reaffirms Commitment to Enhancing Nigeria’s Global Image

Published

26 minutes ago

February 5, 2025

Gloria Ikibah

By Gloria Ikibah

The Director General, Technical Aid Corps (TAC), Rt. Hon. Yusuf Buba Yakub, has reaffirmed the Corps’ dedication to strengthening Nigeria’s reputation on the international stage.

The Director-General stated this during a courtesy visit by a delegation from the Diplomatic Correspondents Association of Nigeria (DICAN), led by its Chairman, Comrade Frederick Idehai, on Monday in Abuja

Buba highlighted the role of TAC in promoting Nigeria’s influence abroad by deploying technical expertise to 35 African, Caribbean, and Pacific countries, and noted that the Corps has contributed to the professional growth of individuals who have gone on to hold key government positions, including cabinet ministers, while also impacting millions of lives.

Additionally, he assured DICAN of TAC’s readiness to collaborate in advancing the 4Ds foreign policy of President Bola Ahmed Tinubu’s administration. This policy anchored on Democracy, Development, Demography, and Diaspora was introduced by the Ministry of Foreign Affairs under Minister Ambassador Yusuf Maitama Tuggar., which aims to position Nigeria strategically within the global community.

He further emphasised TAC’s commitment to working closely with DICAN, ensuring that the association is actively involved in the Corps’ activities through mutual collaboration and support.

Earlier in his remarks, DICAN Chairman, Comrade Idehai, expressed the association’s interest in partnering with TAC to promote its initiatives in alignment with the 4Ds doctrine. He underscored the strategic role of diplomatic correspondents in fostering national development and stability.

Comrade Idehai also highlighted DICAN’s mandate as a professional body of journalists and editors from print, electronic, online, and wire services, who cover diplomatic affairs, including the Ministry of Foreign Affairs, embassies, and international organizations.

He explained that the association was duly registered with the Corporate Affairs Commission (CAC) making it a credible partner for engagement.

News

Kenya Airways apologises to NCAA for mistreating passenger

Published

1 hour ago

February 5, 2025

Kayode Sanni-Arewa

Kenya Airways officials have tendered an unreserved apology to the Nigeria Civil Aviation Authority (NCAA) and a Nigerian passenger: Gloria Omisore, following a complaint of mistreatment during a recent flight.

The airline also retracted previous statements regarding the incident, admitting fault for allowing Omisore to board a flight from Lagos without the necessary transit visa.

The apology came during a meeting convened by the NCAA attended by airline representatives including Country Manager James Nganga, Station Manager Eric Mukira, and Duty Manager Ezenwa Ehumadu, alongside NCAA Director of Consumer Protection and Public Affairs, Michael Achimugu.

Omisore, a British resident permit holder without a Schengen visa, had purchased a ticket for a Manchester-Paris-Nairobi-Lagos (inbound) and Lagos-Nairobi-Paris-Manchester route.

While her inbound journey proceeded without issue, the airline failed to identify the need for a Paris transit visa for her outbound leg until she reached Nairobi.

Although Kenya Airways offered a direct flight to London at no extra cost after a 17-hour layover, the situation escalated when Omisore’s request for accommodation and care due to the airline’s error was denied, leading to what the NCAA termed an “unruly” exchange.

In a prior statement, Kenya Airways claimed Omisore refused the re-routing and acted disruptively. They have since retracted this, admitting their error and apologizing for the “obfuscation of facts.”

The NCAA had given Kenya Airways 48 hours to verify a phone call made by Omisore on December 7, 2025, where she reportedly inquired about her eligibility to fly the route.

The authority also expressed strong disapproval of comments made by airline staff allegedly insulting the office of the Nigerian President, stating the airline could not act with impunity towards Nigerians.

The country manager apologized for the staff’s behavior, promising disciplinary action.

The NCAA has reiterated its call for all airlines operating in Nigeria to adhere to regulations and establish dedicated, trained customer relations desks or officers to handle such issues.