Nigeria Customs Expresses Concerns As CBN Hikes Duty Rates 28 Times In Three Months

The Nigeria Customs Service (NCS) laments that the volume of transactions in the first quarter of 2024 has been significantly impacted by the frequent adjustments of customs import duty rates.

Naija News reports that the Comptroller General of the NCS, Bashir Adewale Adeniyi, expressed these concerns during a briefing in Abuja yesterday, where he highlighted the Service’s performance during the quarter.

Adewale mentioned that the NCS faced various systemic challenges during the quarter which hindered their ability to fulfil their statutory responsibilities efficiently, resulting in a noticeable decrease of 4.89% in the volume of transactions handled.

He noted: “Additionally, significant fluctuations in exchange rates applied in the customs clearance of consignments posed considerable difficulties. As per protocol, the exchange rate utilised by customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the Central Bank of Nigeria (CBN).

“In the last quarter, the CBN directed 28 rates, ranging from NGN 951.94 per USD 1 in January 2024 to a peak of NGN 1,662.35 per USD 1 in February 2024. While a singular exchange rate of NGN 951.94 per USD 1 was maintained in January, February witnessed 15 different spot rates ranging from NGN 951.94 per USD 1 to NGN 1,662.35 per USD 1.

“March saw a total of 13 different spot rates applied, ranging from NGN 1,303.84 to NGN 1,630.16. These fluctuations resulted in an average applied exchange rate of NGN 1,314.03 per USD 1 in the clearance of customs goods during the quarter.”

He added “The repercussions of these fluctuating rates have sent concerning signals to our stakeholders, affecting and disrupting activities. Beyond the speculation regarding potential gains it may have on NCS revenue, the implications on transaction volumes are significant and outweigh any possible benefits.”

However, the CGC acknowledged that it has commenced regular consultations with the CBN to address the potential effects of exchange rate fluctuations on import operations, thanks to the support of the Honourable Minister of Finance.

Regarding revenue performance, Adewale highlighted that the NCS achieved a total revenue collection of N1.34 trillion in the first quarter of 2024.

Adeniyi emphasized that this collection for the initial quarter reflects a significant growth of 122.35% when compared to the corresponding period of the previous year, which generated N606 billion.

“Month-by-month analysis further illustrates the Service’s impressive growth trajectory. In January 2024, revenue collection surged by 95.60%, reaching NGN 390,824,148,326.55 from NGN 199,809,974,327.52 recorded in January 2023.

“This upward trend continued in February 2024, with a staggering 138.68% growth, elevating revenue collection to NGN 450,209,267,557.15 from NGN 188,625,011,386.87 in February 2023. By March 2024, the revenue collected by NCS revenue grew by 132.76% from NGN 217,669,949,432.28 to NGN 506,642,193,019.05.

“When compared to the Federal government’s annual revenue target of NGN 5.07 trillion for the NCS to collect in 2024, the target translates to a monthly revenue target of NGN 423 billion,” Adeniyi said.