LCCI Urges CBN to Halt Customs Duty Rate Increase Amid Exchange Rate Volatility

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The Lagos Chamber of Commerce and Industry (LCCI) has issued a statement expressing concern over the continuous rise in Customs Duty Rates, attributing the escalation to recent fluctuations in exchange rates against the Naira.

In recent weeks, LCCI said the Naira has experienced significant depreciation against major currencies, plummeting to alarming lows of N1,900 against the Dollar and N2,250 against the Pound Sterling in the parallel market. This volatility has prompted the Central Bank of Nigeria (CBN) to adjust the Customs Duty Rate up to six times in February alone.

Dr. Chinyere Almona, Director General of LCCI, emphasized the adverse effects of these frequent adjustments on importers, particularly amidst supply chain disruptions caused by global events such as the conflict in Ukraine and recent attacks in the Red Sea region. While the CBN defends its rationale for aligning the Customs Rate with the official exchange rate, LCCI advocates for a more affordable rate to alleviate the financial burden on importers.

The LCCI DG calls on the CBN to cease the upward revision of the Customs Rate and revert it to a lower level conducive for importation. This, according to Dr. Almona, would enable importers to price their goods more competitively, reflecting the actual costs incurred in shipping. Additionally, LCCI proposes that any fixed rate should be maintained for a specified period, providing businesses with predictability for planning purposes.

Furthermore, LCCI asserts that redirecting government subsidies from consumption to production activities would yield more significant economic benefits. Relief through reduced import duties would have a broader impact on consumer prices, benefiting a larger segment of the population compared to cash transfers.

The chamber also emphasizes the importance of stability in Customs Duty Rates for business planning, urging the CBN to establish a fixed rate conducive to importation. Without such stability, businesses would face uncertainty in projecting import portfolios and navigating market conditions.

In conclusion, LCCI appeals to the CBN to implement measures that promote stability and affordability in Customs Duty Rates, aligning with the chamber’s vision for sustainable economic growth and prosperity.

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