Nigerians may be bracing for higher prices of commodities as the spiral effect of the sudden increase in import duty by over 6.1 per cent by the Federal Government, takes toll on prices. Already, importers and manufacturers are groaning under the new regime and the impact on their businesses.
However, the new regime introduced by the Central Bank of Nigeria (CBN) may also worsen smuggling, import concealment and under declaration of goods imported into the country through the seaports, airports and land borders. CBN had recently jerked the exchange rate on imported goods from N306 to N326 per dollar, which took effect immediately, catching the clearing agents and importers unawares.
Media source gathered that the Nigeria Customs Service (NCS) had immediately commenced implementation of the new duty rate, which would apparently increase its revenue generation. For the importers, some of them have opted to close their shops or leave the country in search of a conducive business environment elsewhere in the region.
President of Shippers Association of Lagos State, Jonathan Nicol, in chat with The Guardian, said the government was probably ill-advised on the new policy, adding that the initiative of the government pursuing revenue rather than trade facilitation is fast crippling the economy.
According to him, the harsh environment created by government through its policies are sending importers away to neighbouring countries, and those nations are taking advantage of Nigeria’s lapses to enrich themselves.“Some of these policies are why people are moving away from Nigeria, because they are harsh, unproductive for importers and manufacturers. It will affect import and exports, because by the time you add all the sundry expenses, the cost will be very high and the market value may not be as expected because it is something for which you never budgeted.
“I will say the government is taking all the money even before we bring in our goods, and when it gets to a certain stage there would be a standstill, where everybody would be fed up, and that is not good for the economy.“It is unfortunate; our informal sector is gradually dying. If you look at the goods coming into Alaba market, ASPAMDA market and others, you will discover that the costs are higher than expected and the traders are having low patronage. It is high time government looked into these issues and create a business friendly environment for this economy to thrive,” he said.
President, National Council of Managing Directors of Customs Licensed Agents, (NCMDCLA), Lucky Amiwero, said the new regime would definitely lead to high cost of goods in the country.He bemoaned the fire brigade approach of the Federal Government in slamming a higher exchange duty and implementing it with immediate effect, without due consideration for the importers.
“You cannot increase duty and say it should be implemented with immediate effect. This is not in line with the international trade standards. They should consider the importers before slamming a new duty,” he said.
Amiwero continued: “It is going to increase the cost of clearance and this will have spiral effect on cost of goods locally, because an importer that is compelled to pay a higher duty than budgeted, would also find a way of recouping his expenses. That is where we have a problem. The Customs have started charging the new rate, and it is unfortunate that this policy is coming at this critical time; it will definitely have an impact on the economy.“I was shocked to hear that pronouncement, I think they have their own plan, but they should have given at least three months grace period for the policy to take effect,” he said.