The Central Bank of Nigeria’s recent higher revision of cargo clearance charges, according to the Center for Promotion of Private Enterprise (CPPE), will encourage smuggling in Nigeria.
Amidst the foreign exchange crisis, the apex bank last Thursday raised the exchange rate for cargo clearance from N783/$ to N952/$. This is the latest development.
To put the development in perspective, however, Dr. Muda Yusuf, the Chief Executive Officer of CPPE, emphasized in a report that an increase in the exchange rate for cargo clearance provided a stronger incentive for smuggling.
He said that the increase in the exchange rate for cargo clearance would ruin the wealth of marine operators and customs revenue collection.
He continued by saying that the increase will exacerbate Nigeria’s already dire inflation position, the welfare state of its people, and the susceptibility of the global trade system to corruption.
He pushed for a reconsideration of the exchange rate increase for cargo clearance by the CBN and Wale Edun, the Minister of Finance and Economy.
Increased incentives for smuggling would result from the shift, and more businesses that rely on imported raw materials would close. When it is harder to import through proper means, customs income can decrease. Enhancing the existing dire circumstances of inflation, poverty, and citizen welfare, as well as increasing the susceptibility to corruption inside the global trade network. An increase in the quantity of inferior goods in the face of rising prices for goods, according to Yusuf.