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Naira devaluation: Customs Adjust Import Duties

The Nigeria Customs Service (NCS) has extended the ongoing foreign exchange reforms to the maritime sector by implementing a 40% increase in the exchange rate used for calculating import duty. On Saturday, the NCS announced a revision in the exchange rate for import duty calculations from N422.30/$ to N589/$. Analysts predict that considering the current exchange rate of over N760/$ at the I&EFX window, importers of vehicles should brace themselves for further potential increases in the future. This development has resulted in a 40% increase in import duty on imported goods, particularly vehicles. Consequently, it is anticipated that there may be a decline in port activities, which could have implications for job security within the maritime sector. Clearing agents, freight forwarders, and importers are among the stakeholders who may be affected by this policy change.

Industry experts express concerns about the potential job losses in the maritime sector and anticipate a significant decrease in the importation of vehicles. The import duty on cars currently stands at 20%, along with an additional 20% levy, making the total clearing cost amount to 40% of the vehicle’s price as determined by the Vehicle Identification Number (VIN). Analysts highlight the possibility of increased smuggling activities due to the higher vehicle duties. However, they also note that the rise in import costs and the escalating prices of Premium Motor Spirit (PMS) present opportunities for domestic automobile companies that operate on Compressed Natural Gas (CNG) (see illustration 2 below).

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