There are indications that the Nigeria Customs Service (NCS) has come under severe pressure over instability in customs duty rate arising from foreign exchange rate fluctuation.
The fluctuation has forced the duty rate to be changed 28 times in three months of this year.
Meanwhile the Customs has announced a N1.347 trillion revenue generation in its Q1’24 operations.
The Comptroller-General of Customs (CGC), Mr. Adewale Adeniyi, told journalists at a briefing in Abuja, yesterday, that the figure was 122 percent higher than the amount collected in the corresponding period of last year.
According to the CGC, with a federal government 2024 annual target of N5.07 trillion, the first quarter revenue is N78.675 billion above the set quarterly target of N1.269 trillion.
He stated, “In the first quarter of 2024, the NCS demonstrated remarkable performance in revenue collection. Total revenue collected during this period amounted to N 1.347 trillion. The collection for the first quarter represents a substantial increase of 122.35 per cent compared to the same period last year, where N 606.119 billion was realised.
Fluctuating FX rates
The NCS boss identified the volatility of the foreign exchange rates as one of the major challenges that confronted the organisation in the discharge of its duties in the period under review, as according to him, the NCS had to contend with 28 exchange rates in the last three months.
The exchange fluctuations, he said, negatively affected the volume of transactions at the ports and might still manifest in the month ahead.
Adeniyi said, “Significant fluctuations in exchange rates applied in the customs clearance of consignments posed considerable difficulties. As per protocol, the exchange rate utilized by Customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the Central Bank of Nigeria (CBN).
“In the last quarter, a total of 28 rates were directed by the CBN, ranging from N951.94/ $1 in January 2024 to a peak of N1, 662.35/$ 1 in February 2024.
“While a singular exchange rate of N951.94/$1 was maintained in January, February witnessed 15 different spot rates ranging from N951.94/$1 to N1,662.35/$ 1.
“March saw a total of 13 different spot rates applied, ranging from NGN1,303.84 to NGN1,630.16. These fluctuations resulted in an average applied exchange rate of NGN1,314.03 per USD 1 in the clearance of Customs goods during the quarter.”
90-day vehicles clearing window
On the 90-day window approved by the federal government for clearing of improperly imported vehicles, Adeniyi said the affected importers should take advantage of the window to clear their vehicles as the NCS would commence vigorous operations at the end of the period to take actions against such vehicles.
The CGC said that going ahead; the NCS would implement the initiative on the integration of geospatial technology alongside the utilization of satellite imagery and artificial intelligence tools and techniques for its operations.
He said, “These efforts were initiated upon assuming office to combat the longstanding issue of smuggling and enhance the NCS’s enforcement capabilities for effective monitoring of our extensive 4,000 km borders. “Additionally, this initiative will establish a command and control center to monitor activities along our borders comprehensively.”