Amid growing concerns over the persistent decline in foreign exchange rates, Dr. Muda Yusuf, Chief Executive Officer of the Center for the Promotion of Private Enterprise (CPPE), has called for a comprehensive review of the Central Bank of Nigeria’s (CBN) role in setting customs duty rates.
In an exclusive interview with Shipping Position Live, Dr. Yusuf expressed dismay over the adverse effects of fluctuating exchange rates, particularly sharp depreciations, on container traffic activities. He stressed that these fluctuations have led to a slowdown in momentum and tempo within the maritime sector.
Highlighting the issue of customs duty, Dr. Yusuf advocated for a reassessment of existing laws and arrangements to ensure stability and predictability. He proposed the establishment of a fixed customs exchange rate, ranging between N900 and N1,000 to the dollar, for a specified period, such as three months, six months, or a year.
According to Dr. Yusuf, implementing a static customs duty exchange rate over a defined period would not only promote economic stability but also enhance predictability in international trade within the maritime sector.
Emphasizing the importance of stability in international trade, Dr. Yusuf underscored the impact of exchange rate fluctuations on import cycles, which can extend up to 60 to 90 days. He applauded recent collaborative efforts between the central bank and fiscal authorities while urging further action regarding customs duty determination.
Dr. Yusuf asserted that implementing such measures would provide a framework for planning and contribute to lowering the cost of living by curbing inflationary pressures.
Expressing concerns about the lack of stability in the current system, Dr. Yusuf cited past intrusions into trade policy by the central bank. He called for aligning customs duty exchange rates with market realities to foster stability and predictability, citing the tariff book as a crucial tool for achieving these objectives.
The CPPE boss urged the government to seriously consider fixing the customs duty exchange rate to bolster economic stability and alleviate the cost of living. He proposed a rate of approximately 1,000 Naira to the dollar for the next six months as a viable option to promote stability and predictability in international trade.
Dr. Yusuf concluded by advocating for a reduction in the exchange rate used for computing import duty, slightly below the market rate, to enhance stability. He stressed the importance of leveraging the tariff book to ensure stability and predictability in international trade operations.
Source: Shipping Position