The Central Bank of Nigeria (CBN) has announced a significant reduction in the exchange rate used for calculating customs duties, a move set to substantially decrease the cost of importing goods into the country.
Details of the Customs Duty Reduction
In a decisive step, the CBN has lowered the customs duty rate to N1,421.23 per US dollar. This marks a notable drop from the previous rate of N1,487.396/$1 that was in effect on Tuesday, October 7. The adjustment is a direct reflection of the Nigerian Naira's continued resilience and recovery within the foreign exchange ecosystem.
The bank's directive, established in 2024, mandates that the Nigeria Customs Service and other relevant parties use the closing foreign exchange rate on the day an importer opens a Form M. This specific rate is then locked in and applied for the entire duration of the import process until the goods are finally cleared.
The CBN clarified that this policy is designed to foster effective planning for both the Customs Service and importers, thereby reducing the uncertainties associated with daily fluctuations in the exchange rate when determining revenue and cost structures.
Naira's Performance in the Foreign Exchange Market
The reduction in the customs rate follows the Naira's positive performance in the official market. Data from the CBN revealed that on Thursday, November 6, the Naira appreciated against the US dollar at the Nigerian Foreign Exchange Market (NFEM), gaining N1.75 or 0.12% to close at N1,436.74/$1.
However, the currency's performance was mixed against other major currencies. It depreciated against the British Pound, trading at N1,882.56/£1, but strengthened against the Euro, appreciating to N1,651.39/€1. In the retail segment, GTBank quoted the Naira at N1,446/$, while the parallel market rate held steady at N1,450/$1.
Drivers Behind the Naira's Strength and Future Outlook
The sustained appreciation of the Naira is attributed to several positive economic signals. A key factor is Nigeria's successful $2.35 billion Eurobond issuance, which was oversubscribed by a massive 477%. Investors are responding positively to improving conditions, including easing interest rates, moderating inflation, and the government's ongoing fiscal reforms.
Financial experts, including Bismark Rewane, CEO of Financial Derivatives Company Limited, project a positive trajectory for the local currency. Rewane forecasts that the Naira could close at N1,492/$ in 2025. This optimistic outlook is driven by factors such as the domestication of corporate debt, increased diaspora inflows and remittances, and potential further Eurobond issuances, all of which are expected to boost dollar supply and ease pressure on the exchange rate.
Analysts anticipate that the Naira will maintain its upward momentum, supported by the government's broader $13 billion Eurobond program and sustained interventions by the CBN aimed at strengthening market liquidity.
