A significant decline in cargo imports, amounting to 65 percent, has been attributed to the ongoing instability of the naira against the dollar during the third and fourth quarters of the year.
The naira reached an all-time low on October 30, trading at approximately N1,150 to a dollar in the black market. This depreciation has also impacted the customs duty imposed on imports, compelling the few importers who are still operating to leave some of their cargoes at the seaport.
Many clearing agents have expressed concerns about the rise in customs duty, which they believe will have a detrimental effect on the prices of goods in the market during and after the holiday season.
The Tin-Can Island Command of the Nigeria Customs Service recently identified some of the challenges contributing to the drop in imports. These issues include the high exchange rate, which has also affected customs duty, and the difficulty in accessing the dollar through official channels, among other factors.
The dollar’s black market rate fluctuates between N1,150 and N1,200, compared to the Nigeria Foreign Exchange Market (NAFEM) official rate of N848 per dollar.
Investigations indicate that a growing number of berths at various terminals in both the Apapa and Tin-Can Island ports are becoming vacant, as fewer vessels are making port calls.
Alhaji Ibrahim Tanko, Coordinator of the 100 Percent Compliant Team of the National Association of Government Approved Freight Forwarders (NAGAFF), mentioned that over 9,000 vehicles have been abandoned in the ports, occupying valuable space at the terminals.
Dr. Kayode Farinto, a former acting president of the Association of Nigerian Licensed Customs Agents (ANLCA), disclosed that imports have dropped by 65 percent, with the likelihood of further decline by year-end. He attributes this decrease to the naira’s depreciation, which has also impacted customs duty collection on cargo.
Alhaji Olukolu Tunde Khallil, CEO of Khallil Associate Nig Ltd, a prominent importer, called on the government to strengthen the naira. He highlighted how businesses that once imported three or four containers when the dollar was lower are now scaling back to just one or teaming up to import one container. He also noted that the escalating costs could lead to investors winding down their operations in Nigeria.
The declining value of the naira, coupled with policy decisions, is impacting various sectors of the economy, including poultry farming, due to soaring costs. The challenges surrounding the exchange rate and its effects on imports and economic stability have prompted calls for policymakers to address and understand the complexities of economic policy-making in Nigeria.
