By Steve Agbota, [email protected]
For months running, importers and exporters operating in the nation’s maritime industry have been tormented by volatilites in the exchange rate used for the computation of import duty payments.
The rate, determined the Central Bank of Nigeria (CBN), has been largely unstable, turning the shipping business into a nightmare of some sorts.
To this end, the importers and exporters have petitioned the executive and legislative arms of government to mandate the CBN to relax some of its policies as they were affecting the economy and their business.
For instance, due to unstable and high exchange rate, some Nigerian importers have left the nation’s shores for neigbouring countries to operate.
Those braving the odds are literally living on ventilators and have called on the government to soften the hard operating space.
Speaking on the issue, former Administrative Officer of the Alaba International Importers Association, Mr Emmanuel Amaife, amplified the concerns of many importers and traders, saying that the policies have not been favourable, especially to the informal sector.
He lamented the astronomical cost of clearing goods. He said the recent reform policies of the incumbent administration has led to a 60 per cent increase in tariff, which has made it even more challenging for importers and traders. According to him, the CBN needs to reassess its strategies so subdue the inflation monster.
He pointed out that inflation was a direct result of government reform policies being carried out without some cushioning effects.
He said the sky-high prices of goods sprang from high import and clearing cost.
He complained that the average Nigerian suffers the consequences of these policies.
“We acknowledge the challenges faced by the current administration but stress the need for effective solutions. While I sympathise with the government for what they inherited, the average Nigerian is more concerned about how you will bring down the cost of living, transport, power supply, fuel, and other essentials,” he said.
Meanwhile, the President of United Berger Motor Dealers Association; Mr Metche Nnadiekwe, said there is urgent need for the CBN to stabilise the exchange rate, saying the unstable foreign exchange rate is frustrating business.
“The current Customs exchange rate has made it difficult for businesses to operate. The constant increments have led to desperation among young Nigerians, driving some to crime.
“The government must ensure that the dollar rate comes down to where it was before. The constant increments have finished the business. We can’t continue like this, as it only leads to more suffering for the masses,” he lamented.
However, he highlighted the social consequences of the economic pressures, adding that many young Nigerians are turning to crime out of desperation.
“People are seeing things and want to be part of it. Every day, there’s an increment, and who suffers? It is the masses. This desperation leads many into crime,” he said.
On his part, Dr. Muda Yussuf, Director General of the Centre for the Promotion of Private Enterprise (CPPE), urged the CBN to slow down on monetary policy tightening. “Businesses are yet to recover from the recent hawkish monetary policy stance. The monetary instruments should be put on pause while fiscal policy tools address supply-side factors in the inflation dynamics”, he advised
Yusuf noted that the main drivers of inflation, such as food, transport, and insecurity in farming communities, have not been adequately addressed.
Speaking to Daily Sun, the former acting National President of Association National Licensed Customs Agents (ANLCA), Dr. Farinto Kayode, said CBN needs to relax some of its policies especially in the area of foreign exchange rate for Customs duty.
He said fluctuations of exchange rate was not good for the economy because business can’t predict what we happened in the 24 hours.
“And that is why within four days in a week, we have more than five different exchange rates and that is not too good for the economy and that is why the economy is not moving.
“I have subjected severally that there is need for government to look inwardly and let us have predictive exchange rate and these are not really being addressed,” he added.
He said the maritime industry is not moving while the volume of import is drastically dropping on a daily basis.
“Talking about the economy, I know the government is trying her best to look at how to fix the economy but where are the policies? There is no policy in place for now and there is nothing to work with coupled with the fact that we have a somersaulting foreign exchange rate on a daily basis and that is not going to help the economy,” he added.
Meanwhile, the Presidential Committee on Fiscal Policy and Tax Reforms has recommended that the Federal Government should adopt an exchange rate of N800 per dollar for customs import duty.
Taiwo Oyedele, chairman of the committee, expressed concern over the constantly changing import duty rates due to the volatility of the foreign exchange market. “People need to plan. We’re saying to the government, can you please sign an order that says for the purpose of paying import duty, we shall use N800 for the rest of the year till December?”
