The decision is uncalled for. It buttressed the insensitivity of the ruling class to the plight of the citizens. A time when government all over the world are identifying with the sufferings and plight of their citizens by sending them palliative and relief packages in cash and in kind, but reverse is the case in Nigeria because the government all of a sudden decided to increase the exchange rate. There was no pre-information, discussion with the stakeholders, no input from anybody, even in autocratic and democratic government; things are not done that way. As I speak to you some countries in Europe have made transportation free to cushion the effect of the lockdown challenges. Movement of essential goods and drugs are being facilitated but what our government do is to inflict more hardship to the helpless Nigerians. I was shocked to my marrow when I read about it in the newspaper, in fact I said it is not possible until I confirmed that it had reflected on the Nigeria Customs Service (NCS) payment portal. The freight forwarders, importers, manufacturers among others, have complained but all entreaties still fall on deaf ears. This is coming at a wrong time I must say.
This development will disrupt the economic system. The Nigeria Customs Service has already imputed the new exchange rate into the system. It has also been imputed at the various Direct Trader Inputs (DTI) cafes where freight forwarders capture their entries. This increase has thrown everybody off balance; it makes the system unpredictable because as it stands now, almost all the contracts entered earlier this year that are yet to be executed or that are on the process of being executed will be disrupted. Before one go into any international trade transaction, the government policy mandates every shipper to open Form M. In that very Form M, you state the description of the good, you quote the FOB amount, the insurance, freight, and also quote the exchange rate as at the time of opening the Form M. That exchange rate you quoted is meant to be applied when you are calculating duty on that cargo. Now, if after a cargo arrives here and there is this type of change in fiscal policy, it will completely disrupt the entire arrangement you have put in place. I must say that businesses will not grow and the economy will suffer because this increase is coming at a wrong time.
The new exchange rate would definitely add to the cost of clearing cargo from Nigerian ports as well as the prices of goods in the market. The policy should not have commenced with immediate effect because several agents have already accepted jobs from their importers based on the old rate of N306 per dollar. The new rate has been implemented at the port and it is already affecting our transaction with Customs because if the former exchange rate was N306 and they increased it by N20, some extra money would be added to it. For example, a vehicle that pays a duty of N300, 000, will definitely pay more given the current increase in the exchange rate. So, the new rate will affect the cost of clearing, especially for those who have collected jobs at the rate of N306. Also, if an importer is selling his car for N1 million, with the increase, he is going to add whatever the extra cost is to it. Customs have already changed the rate on their system and every job that has been captured will pay the new rate.
The increase in exchange rate is not the way forward and I urge the Federal Government to immediately cancel the directive. It is going to add to the cost of clearing, business and job losses, while living standard is going to further deteriorate. This policy is going to depress the economy and these are the situations that give rise to insecurity and criminality. Come to think of it, this decision was taken without carrying the front line stakeholders along. This is uncalled for and totally unacceptable.
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