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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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Insecurity! Bandits Ask For Additional N44m, 10 Motorcycles After Collecting N16m Ransom

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The bandits who kidnapped the Head of the Zamfara State Office of Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, Alh. Bashir Aliyu Abara Gummi, are demanding an additional N44m ransom to release him after collecting N16m from his family.

Gummi was abducted in October 2024 along Funtua-Gusau Road while travelling to Abuja to represent the Zamfara State Government at a meeting.

The bandits opened fire at moving vehicles, k!lling two persons before kidnapping the coordinator and scores of other travellers.

It was gathered that his family managed to gather N16,000,000 ransom which the kidnappers accepted but refused to release him.

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According to a source, they are now demanding a new ransom of N44,000,000, along with 10 motorcycles.

“We implore the State Government to take immediate action to save this important individual, as the kidnappers have set a deadline of Thursday, February 6, 2025, which was yesterday”, the family source added.

Meanwhile, the bandits have released a video of the victim, pleading for help.

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Nigeria Customs Imposes 4% Charge On FOB Imports

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A 4% charge has been placed on Free On-Board (FOB) value of imports by the Nigeria Customs Service (NCS).

This was announced by the NCS spokesman, Abdullahi Maiwada in a statement on Wednesday in Abuja.

Maiwada noted that the directive was in line with the provisions of the Nigeria Customs Service Act (NCSA) 2023.

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“In line with the provisions of Section 18 (1) of NCSA 2023, the NCS is implementing a 4 per cent charge on the Free On-Board (FOB) value of imports.

“The FOB charge, which is calculated based on the value of imported goods, including cost of goods and transportation expenses incurred up to the port of loading, is essential to driving the effective operation of the service.

“Furthermore, the NCS acknowledges concerns raised by stakeholders over the sustained collection of 1 per cent Comprehensive Import Supervision Scheme (CISS) fee.

“It is a regulatory charge imposed for funding Nigeria’s Destination Inspection Scheme alongside the 4 per cent FOB charge.

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As a responsive government agency, the service wishes to assure the general public that extensive consultation is ongoing with the Federal Ministry of Finance to address all agitations raised by our esteemed stakeholders, “ he said.

He urged all stakeholders to comply with the directive, which was conceived after extensive consultation with relevant stakeholders and organisations.

“All stakeholders are urged to support this legally binding initiative.

“As the measures introduced in alignment with the NCSA 2023 reflects a balanced approach born out of extensive consultations with industry players, importers, and regulatory bodies,” he said.

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US aviation authorities panic as plane goes missing midair

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US authorities are looking for a small plane carrying 10 people that has been reported missing in the state of Alaska.

The US Coast Guard for the Alaska region said a Cessna Caravan craft was 12 miles (19km) offshore on a flight from Unalakleet to Nome when “its position was lost”.

The two cities are some 146 miles from each other across the Norton Sound, an inlet of the Bering Sea on Alaska’s western coast.

Search and rescue crews “are working to get to the last known coordinates” of the flight, state officials said in a statement.

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They said they had been notified of an “overdue” aircraft operated by the airline Bering Air at 16:00 local time on Thursday (01:00 GMT).

The 10 people on board comprised nine passengers and a pilot, the update from the Alaska Department of Public Safety said. There was no information immediately available about who was on board.

The volunteer fire department in the landing city Nome said the pilot had told air traffic controllers that “he intended to enter a holding pattern while waiting for the runway to be cleared”.

David Olson, director of operations for Bering Air, was quoted by Sun UK as saying that the aircraft left an airstrip in Unalakleet at 2:37 pm before officials lost all contact less than an hour later.

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It was 12 miles offshore when it was last sighted, according to the US Coast Guard.

Nome Volunteer Fire Department said in a statement: “We are currently responding to a report of a missing Bering Air caravan.

“We are doing an active ground search from Nome and from White Mountain.

“Due to weather and visibility, we are limited on air search at the current time.

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“National Guard, Coast Guard, and Troopers have been notified and are active in the search.”

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