The Central Bank of Nigeria (CBN) has issued a directive to the Nigeria Customs Service (NCS) and other relevant entities, instructing them to utilize the closing rate in the official foreign exchange (FX) window for the assessment of import duty.
In a statement released on Friday, signed by Hassan Mahmud, Director of the Trade and Exchange Department at the CBN, the apex bank emphasized the necessity of using the FX rate at the point of importation for assessing import duty until the completion of clearance procedures.
The CBN highlighted concerns regarding irregular changes in import duty assessment levies by the Nigeria Customs Service, which have contributed to uncertainties in pricing structures for goods and services, leading to abnormal increases in final sale prices. These fluctuations, the CBN noted, are driven more by uncertainties rather than traditional market fundamentals, potentially impacting near-term inflation trends.
To address these challenges, the CBN advised the Nigeria Customs Service and other related parties to adopt the closing FX rate on the date of opening Form M for importation as the benchmark for import duty assessment. This rate will remain valid until the completion of importation and clearance processes.
Effective from February 26, 2024, the directive stipulates that the closing rate on the date of Form M opening will apply for import duty assessment. The Form M serves as a declaration of intention to import physical goods into Nigeria.
The CBN clarified that this new directive supersedes the requirements outlined in “Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual (Revised Edition), 2018.”
While acknowledging the initial volatility and price distortions following the liberalization of the FX market, the CBN expressed confidence that these reforms will ultimately stabilize the market and instill confidence necessary to attract investment capital for the growth and development of the Nigerian economy.
