CBN issues fresh guidelines to Customs on import clearance exchange rate

In a decisive move amidst a series of customs exchange rate adjustments, the Central Bank of Nigeria (CBN) has directed the Nigerian Customs Service (NCS) to embrace a foreign exchange closing rate on the date of ‘Form M’ submission by importers. This groundbreaking decision, effective from February 26, 2024, is set to address the challenges posed by frequent changes in customs duties rates, ultimately stabilizing the market and reducing uncertainties.

The CBN, through its Director of Trade and Exchange Department, Hassan Mahmud, emphasized that the erratic fluctuations in customs duties rates have disrupted the pricing structure, resulting in unpredictable increases in the final cost of goods in the market. The new guideline aims to curb this volatility and streamline the customs exchange rate process.

Under the fresh directive, the CBN advises the Nigeria Customs Service and related parties to adopt the FX rate on the date of Form M opening for importation. This rate will be used for import duty assessment and remains valid until the completion of the importation and goods clearance by the importers. The move is intended to enable effective planning, reducing uncertainties around varying exchange rates and providing stability in revenue and cost structures.

Effective from February 26, 2024, the closing rate on the date of Form M opening will be the benchmark for assessing goods and services, superseding the previous requirement outlined in Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual (Revised Edition) 2018.

This development is particularly significant in the context of the CBN’s multiple exchange rate adjustments for cargo clearance throughout January, with the latest pegging the exchange rate for cargo clearance at N1,605 per US dollar. The continuous updates in exchange rates have contributed to the high cost of goods and services in Nigeria, as reflected in the National Bureau of Statistics’ latest consumer price index, which reported a headline inflation rate of 29.90 percent for January. The CBN’s strategic move is poised to bring about more stability and predictability in the customs exchange rate landscape.