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Business News of Sunday, 21 November 2021

Source: www.vanguardngr.com

Arbitrary increase of exchange rate for payment of duty adversely distort business plans -Importers

Nigerian ports Nigerian ports

IMPORTERS and clearing agents in Nigeria have continued to express worries over the continuous arbitrary increase in the exchange rate for the payment of import duty by the Nigeria Customs Service, NCS.

The increase according to some importers that spoke Vanguard Maritime Report, has not only distorted their business plans it has continued to force them to increase the prices of their commodities to manage marginal profit.

The importers and agents said as much as they know that the management of the Nigeria Customs Service does not have the authority to formulate fiscal policies and directives, they are in the position to advise the government particularly its regulatory Ministry, the Federal Ministry of Finance on how best to go about the formulation and implementation of these policies.

They said that the Nigeria Customs Service as trade facilitators are ordinarily expected to help the trading public in early sensitization of the implementation of these policies so that they can plan better and be better prepared to successfully do their businesses.

Importers highlighted the fact that this arbitrary increase of the rate of the exchange has in no small measure continued to negatively impact the country’s economy, especially the inflation rate.

President, Shippers Association of Lagos, Reverend Jonathan Nicole told Vanguard Maritime Report that the increment is not palatable with importers, because the move will increase the cost of cargo clearance.

Nicole noted that such developments would also cause a hike in prices and goods in the market and lead to inflation.

“It will raise the cost of clearing astronomically. Shippers will have to source more funds to clear their goods. The ripple effect is that goods will become more expensive in the market and this will lead to inflation,” he stated.

Nicole said shippers were not happy with the increment but have begun to pay, since the Customs have adjusted the duty payable on goods.

Speaking in a similar vein, National President, National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said the increase would create more hardship for the citizenry, because Nigeria runs an import-dependent economy

He said: “The latest increase will also affect the purchasing power of Nigerians. The continuous increase will cause a problem because it will get to a level where the inflation rate will be high. The economy is not growing and the people’s purchasing power is gradually going down, which is an indication that government should do something to avoid more economic woes.”

Vice President, Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, said the increase took effect on Tuesday, adding that it was unfortunate that the cost of cargo clearance will increase and the value of goods will also increase, thereby causing inflation in the economy.

“The purchasing power of the common man on the street will continue to reduce because something you purchased N10 last month, this month, they will tell you is N60.

“Customs does not have control of it. They will just update the increase on their system immediately and they have done that. I have a job that I collect a valuation on Monday based on N381 but we can’t do the declaration now because it has been changed to N404. We are not producing anything as our economy is over 90 per cent import oriented, so what do we expect?” he stated.

An importer Nicholas Acholonu who spoke on the development said that he was at a loss as to the next move to make since the increment was announced.

Acholonu explained that he is contemplating closing shop due to the increment because he entered into some trade commitments before the increment was announced.

‘He stated ‘I am at a crossroad as I speak to you because I do not know where to source additional foreign exchange from since the increment was announced.

‘‘I had projected a certain amount of money for the clearance of my goods based on what was obtainable before now but with the current situation, I will have to source more money to clear my so that I do not lose my investment.