In April, the frequency of changes was above ten and as of 1st May 2024, the rate has jumped to N1373.65/$.
Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE) has called out the federal government.
Yusuf said the incessant change in the customs duties is affecting businesses negatively in the country.
Within the first quarter of this year, the customs duty exchange rate was changed twenty-eight times.
In April, the frequency of changes was above ten and as of 1st May 2024, the rate has jumped to N1373.65/$.
These changes Yusuf told THE WHISTLER led to “High volatility in cargo clearing costs, worsening inflationary pressures and aggravating investment risk, especially in the real sector of the economy”.
He noted that the frequent changes are profoundly detrimental to production, planning qand other real sector activities in the Nigerian economy.
“It is extremely difficult for investors to plan under these unstable circumstances,” he said adding that “The situation has introduced an unprecedented level of uncertainty and unpredictability to the international trade dynamics.”
According to him, investment risk has become elevated, planning has become difficult, risk management has become challenging, and investors’ confidence is being weakened.
He added that It is a double challenge for investors to grapple with volatility in the foreign exchange market and contend, concurrently, with a high level of unpredictability in the international trade ecosystem.
Proffering solutions, Yusuf urged the Central Bank of Nigeria (CBN) to adopt a framework to minimize volatility in the customs duty exchange rate in line with the commitment of the present administration to bolster investors’ confidence and drive economic growth.
“Such framework should adopt a quarterly customs duty exchange rate, after due consultation with the fiscal authorities. We propose a commencement rate of N1000/$ customs duty exchange rate.
“Stringent consultation with the fiscal and monetary authorities is imperative because of the trade policy implications of such decisions,” the CPPE boss suggested.