Dollars For Local Transaction: EFCC To Arrest Ministers, Govt Officials, Others

Dollars For Local Transaction: EFCC To Arrest Ministers, Govt Officials, Others

*CPPE, Maritime Editors, Sea Empowerment Centre Call for reversal of new customs duty rate

*Finance Minister, Edun asked to call CBN to order

The Central Bank of Nigeria, CBN has reinforced the ban on use of foreign currency as a means of exchange in Nigeria in a move to arrest the helpless depreciation of the Naira in forex market.                 

Meanwhile, there is a growing concern and outcry among Nigerian Shippers’, freight agents, economic analysts and consumers over the 43 per cent increase in import duty exchange rate on Friday last week. 

 The rate was raised to N1,356.883 per 1$ from N951.842 per 1$  fixed in December 2023. Between 2022 and now the percentage increase in the import duty exchange rate stands at 85 per cent.  In 2022 it was raised by 20 per cent, 2023 increase represents 22 percent while the latest is 43 per cent.

 While condemning the move as insensitive to the plight of consumers, some group are planning to stage protests even as they insist on the reversal of the rate.

Consequently, the Centre for the Promotion of Private Enterprises (CPPE) has recommended that, going forward, the determination of the exchange rate for import duty computation should be treated as a fiscal policy matter and located within the remit of the fiscal authorities which is the Federal Ministry of Finance.

According CPPE, this is necessary for proper alignment with extant fiscal policies as CBN has no business dictating fiscal policies which differ from its statutory role of formulating monetary policies.  

Similarly, the Sea Empowerment Research Centre  called on the Finance and Coordinating Minister of the Economy, Wale Edun to direct CBN to desist from the act of incessant increment of exchange rate for customs duty assessment in the interest of the suffering Nigerians and in the spirit of the renewed hope mantra.       

However, in a public statement signed by the Director, Corporate Communications of CBN, Ibrahim Mua’zu, the apex bank, observed that there has been an increase in the use of foreign currencies in domestic market as a medium of payment for goods and services by individuals and corporate entities.                                 

 Noting with dismay that some institutions price their goods and services in foreign currencies and demand payments in same, it warned that it is an offence which attracts six months imprisonment on conviction.                           

 “For the avoidance of doubt, the attention of the general public is hereby drawn to the provisions of the CBN Act of 2007, which states inter-alia that ‘the currency notes issued by the Bank shall be legal tender in Nigeria… for the payment of any amount. 

 “Furthermore, the Act stipulates that any person(s) who contravenes this provision is guilty of an offence and shall be liable on conviction to a prescribed fine or six months imprisonment”, the statement noted         

Asking the public to report any contravention of this Act to the Economic and Financial Crimes Commission (EFCC), it added that the prohibition is without prejudice to foreigners, visitors and tourists who are encouraged to use their cards for payments or exchange their currency for the Naira.       

 Observers believe that EFCC need not go far to effect arrest because ministers and other top government functionaries store foreign currencies in their offices as a tradition and use same for daily transaction without regards for the subsisting Act or bother about the pressure they heap on the Naira.

Speaking with MMS Plus, an economist, Dr Muda Yusuf, Chief Executive Officer (CEO) of CPPE, said the drastic upward review of the exchange rate for the computation of import duty from N952 to N1,357,883 per $1 would have a devastating effect on businesses across all sectors.

  He said, “This is a whopping 42.5% increase. This is like the last straw.  Businesses are yet to recover from the shocks of the new round of currency devaluation resulting from the sudden unification of the exchange rate which has driven the official exchange rate to about N1,400. 

“It is double jeopardy for the investors across all sectors especially those in the real sector.  This action will further fuel inflation as production and operating costs get escalated. 

“The vulnerable segments of the population will be further be impoverished as cost -push- inflation gets exacerbated. 

CPPE, therefore, appealed to the CBN to reverse this rate hike in the interest of the already impoverished segments of our society and the numerous businesses that are already on the verge of collapse, adding that “The shocks, disruptions and dislocations are of immense proportions. It is even worse that the rates take immediate effect.

“This is a policy action that is difficult to justify, especially in the context of the multi-dimensional headwinds that businesses are grappling with. 

In the submission of the Sea Empowerment Research Centre as highlighted by Dr. Eugene Nweke, it is surprising that the increment which is a barrier to trade is coming when the World Economic Forum(WEF) is embarking on efforts to encourage trade globally.

 According to Nweke,”The Sea Empowerment Research Center wish to note that, at the recently concluded World Economic Forum (WEF), one of the global concerns raised at the forum revolves around the drop in the global trade volumes as witnessed in 2022/2023 period, which the World Trade Organisation (WTO), director general, Dr Ngozi Okonja-Iweala gave performance statistics and proffered options available to the global bodies, to overcome the challenges in this direction and thus boost global trade volumes in the face of the myriads of global challenges impeding on trade volumes amongst nations. 

“She urged trading countries to stimulate trade increase volumes via trade policy rebates and waivers, eradicate delays associated with dwell time, increase trade facilitation windows, removal of trade barriers, promote bilateral trade agreements, etc, it was never heard of a systemic and incessant duty exchange rate increments as an alternative window or bar up. 

He added:“In my Centre’s candid opinion, it think that, the Coordinating Ministry, should  carry out or conduct impact analysis (of the increment from ₦400plus exchange rate for duty onwards to ₦700plus) on trading public and their related activities across the international markets, the manufacturing sectors, and the consuming public. 

Nweke further noted that “dishing out fiscal and monetary policies without recourse to weighing their economic implications in every sense of responsive leadership via a crystal and statutory feedback mechanism, falls short of the renewed hope mantra.”

Also, the League of Maritime Editors, in a press statement, described the increment as crazy and counter-productive. 

 The statement issued  by  the President, Chief Timothy Okorocha and the Secretary, Mr. Felix Kumuyi, the League described the rate as outrageous in view of the obvious consequences on the national economy.

 The statement said  the rate is destined to be counterproductive if the federal government is desirous of  addressing the economic challenges currently being faced by Nigerians.  

 With the current petroleum price hike under the deregulation policy and its consequences on cost of transportation, the League believes that the current customs duty exchange rate   will further worsen the living conditions of Nigerians as importers and manufacturers will be forced to increase prices of their goods.

The League said that Nigerians are currently facing hard times as a result of the increasing high prices of goods and services in the market.

“There is hardly any day that prices of all types of food and other goods in the market do not go up. So, the new rate to be implemented by the Customs in calculating duties will worsen the situation”, the statement said.  

The League while noting that the Customs management is simply implementing the directive handed to it by the federal government, advised the management of the Service to draw the ears of the Finance Ministry and the Central Bank of Nigeria to the consequences of this policy which is not sustainable.

The statement added, “Economic policies are introduced for the good of the people and not to worsen their living conditions and expose them to extreme poverty.  Every policy must have human face. This current policy is certainly against the common interest of the people because it will further send them to early graves.” 

The League pointed out that such high rate of duties   will further discourage imports, a development that will lead to high scarcity of essential goods in the market and consequences on the prices.

 Part of the statement reads, “The new rate will stifle trade rather than promote trade.  Cargo throughput will further go down. It will hit everyone, including manufacturers who will be forced to raise high prices as they are doing now. We believe that this is not what the present administration of President Ahmed Bola Tinubu stands for.

“So we feel that government should take another look on the rate. The Customs Service should take up this matter with the Ministry of Finance and CBN.  Every policy must promote economic wellness of the people and not send them to their early graves. If you insist on implementing the new rate, some importers will have no choice than to pay, but remember that it is actually Nigerians that will suffer at the end, because the importers will ensure they recover their investments.”

Check Also

Airlines Struggle To Clear Backlog After Strike

Airlines Struggle To Clear Backlog After Strike

Nigerian airlines are grappling with operational challenges as they work to accommodate passengers and clear …

Leave a Reply

Your email address will not be published. Required fields are marked *

× Get News Alert