The Central Bank of Nigeria, on behalf of the Federal Government, has raised the exchange rate for cargo clearance from N952/$ to N1.356 per dollar. This comes after a previous increase from N783/$ to N952/$ a few weeks ago.
In November, the rate for cargo clearance went up from N757 per dollar to N783 per dollar, a 3.4% increase. Subsequently, in December, it was raised from N783/$ to N952/$.
Reports fied in by Lagos Local News correspondent on Friday, noted that the Nigeria Customs Service portal reflects the new rate.
In response, Remilekun Sikiru, a member of the Association of Nigerian Licensed Customs Agents, remarked, "How do we explain this? From N952/$ to N1.356/$ as of Friday morning with about N404 increase? It is quite unfortunate that the prices of goods and commodities will automatically increase. Importation would further decrease and depreciate, vehicle prices would skyrocket again."
“Since this unification of a thing, the government has refused to look inward and critically into the maritime industry as regards importation and exportation. The sector has been neglected, and things are getting worse daily. The question now is, how would freight forwarders and customs broker agents cope with this new rate?”
Also speaking, an agent, Ben Anya, said that they woke up to the new rate, “which was before now set at N951 per dollar,”
Anya explained that with the latest increase in the exchange rate, the cost of clearing would increase.
“And this would also affect the cost of goods in the market. It would also lead to a drop in importation,” he said.If the plan goes forward, the government will tell people and businesses to change their foreign currencies in domiciliary accounts to naira. The rate for this conversion will be decided by the Central Bank of Nigeria.
According to sources in the Presidency, the goal is to make the naira more stable. The naira fell a lot in the official Nigerian Foreign Exchange Market on Monday, dropping by 24% to N1,348 per dollar.
One source from the Presidency noted that the forex scarcity and naira fall are problems for the elite and the Federal Government won't just watch some people keep foreign currencies instead of using naira.
The source said, “The problem of dollar scarcity is an elite problem. You will notice that this happens at the end and the beginning of a new month. That is when the exchange rate goes up. Invariably, that is when governors collect FAAC (Federal Account Allocation Committee) allocations. Whatever the connection, we don’t know.
“There is no country in the world where people open domiciliary accounts to keep dollars. It happens only in Nigeria. This must be addressed. This is not only a political issue, but it is also an economic issue that must be addressed. Genuine demands driven by economic activities can’t bring this huge pressure. By June, dollar demands are supposed to have gone down when Dangote Refinery must have started.
“Nobody should keep a domiciliary account if they do not have legitimate foreign currency earnings like salary or getting foreign exchange revenue, either as an individual or as a company. Even if you have foreign exchange inflow as a result of your work, immediately after the money lands in your account, the banks should automatically change it to the local currency and your local currency account will be credited with the equivalent value.
“In Nigeria today, there are over $30bn in domiciliary accounts of individuals. It is in the CBN account. The records are there. It is not right. These are issues we will have to deal with. In other countries, dollars are not meant to stay in peoples’ accounts.”
If implemented, this will be a major policy shift by the President Bola Tinubu administration, which said in September 2023that it was looking to attract funds held in domiciliary accounts and those held by Nigerians abroad into massive investments in various sectors of the economy.
Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared this information during a press briefing in Abuja. He highlighted the substantial funds in domiciliary accounts and abroad, emphasizing the potential to boost the economy.
He also stated that Nigerians in the Diaspora were expected to contribute significantly to this initiative, aiming to elevate the economy through enhanced productivity and efficient resource management.