The Centre for the Promotion of Private Enterprise (CPPE) is requesting the Central Bank of Nigeria and the Ministry of Finance, 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.
▪︎ CBN Governor, Olayemi Cardoso
Dr Muda Yusuf, its CEO, who made the appeal, said that the apex bank 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. Consultation with the fiscal authorities is imperative because of the trade policy implications of such decisions. It is also consistent with the commitment of the present administration to effective coordination between fiscal and monetary authorities," he said.
He pointed out that the frequent changes in the customs duty exchange rate are profoundly detrimental to production, planning and other real sector activities in the economy.
"In the first quarter of this year, there were changes in the customs duty exchange rate twenty-eight times.
In April , the frequency of changes would be close to ten times or even more.
As at 1st May 2024, the rate has jumped to N1373.65/$. It was less than N1200/$ few days before.
It is extremely difficult for investors to plan under these unstable circumstances," said
He said that the situation has introduced an unprecedented level of uncertainty and unpredictability to the international trade dynamics.
"Investment risk has become elevated, planning has become difficult, risk management has become challenging and investors’ confidence is being weakened.
It is double whammy for investors to grapple with volatility in the foreign exchange market and contend, concurrently, with high level of unpredictability in the international trade ecosystem. This is not consistent with our growth aspirations at this time," he added.
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