- Import Duty: Prices of Import Goods to Increase
The Central Bank of Nigeria recently increased foreign exchange rate for import duty by N20 or 6.5 percent to N326.
This was after manufacturers and experts called for lower import duty to support local manufacturers striving to establish a factory in the country.
However, the Nigeria Customs Service has implemented the new exchange rate in Lagos on June 10, suggesting that cost of importation has automatically risen by almost 7 percent.
In turn, the additional cost will be added to the cost of production by importers and subsequently, prices of goods from bread to raw materials will surge.
This, in an economy struggling to pay N30,000 or $92 minimum wage, will erode consumer buying power and further hurt economic productivity.
Nigeria’s inflation rate rose for a second consecutive month in May to 11.40 percent amid rising prices. This number is expected to jump even higher if import duty remained high.
Again, because the nation imports more than 90 percent of its goods, the increase is expected to weigh on national growth.
Mr Emmanuel Onyeme, Public Relations Officer of the Association of Nigeria Licensed Customs Agents at Tin Can Island Port, said the new rate is affecting his office’s interaction with the Customs.
“The new rate took effect at the ports today. It is already affecting our interaction with Customs because if the former exchange rate is N306 and they are placing an increment of N20, with this, some extra money would have been added to it.
“So, the new rate will affect the cost of clearing, especially for those who have collected jobs at the rate of N306, now that they are paying N326, they would have to go back to the importer to collect extra money.
“And if the importer is selling his car for N1 million, with this additional cost, he is going to add whatever is the extra cost to it.”
Other stakeholders believe this move will hurt businesses that imports raw materials, enhance new job creation and salary may continue to struggle. A risky move for an economy just coming out of recession.