'BUSINESSES ARE DYING'- PETER OBI ASKS FG TO STOP CUSTOMS FX RATE INCREASES. (PHOTO).

 ‘Businesses are dying’ — Peter Obi asks FG to stop customs FX rate increases

Peter Obi, presidential candidate of the Labour Party (LP) in the 2023 elections, has asked the federal government to end the inconsistency in customs duty charges, saying it is affecting businesses in the country.

Since the year began, the Nigerian Customs Service (NCS) has been upwardly adjusting its foreign exchange (FX) rate for duties.

In February alone, the agency has increased the rate six times, reflecting the volatility in the broader FX market.

Obi, in a statement posted X on Wednesday, asked the government to stop the arbitrary and ever-increasing customs duties.

The politician said the situation is now negatively impacting businesses and the cost of items, warning that it “portends a huge danger to the economy”.

He said such arbitrary charges would lead to further closure of businesses and attendant job losses.

Obi said if the situation is not corrected, importers may resort to using ports of nearby countries — “a situation that will leave our ports under-productive, and further deepen our economy into a worse situation as a result of loss of revenue”.

“A situation where at the point of initiating importation, Form M and other documents related to importation are based on a particular rate of exchange, for example, N1000 to $1, being the prevailing exchange rate at the time which the importer of goods was used to calculate the entire process, from the import initiation to receipt of goods in his warehouse,” he said.

“Then suddenly when the goods arrive in Nigeria, and duties are calculated at different rates, say N1400 to $1, it becomes a serious business challenge that results in business losses. Worse still, it directly fuels the inflationary spike which is the basis of increasing cost of goods and living.”

Obi called on the government to show consistency in its policies, stating that it would help with economic forecasting and business planning.

“Businesses are dying and manufacturers are shutting down because of the poor and inconsistent economic policies of the government, he said.

“We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living.”

Obi, advised the government to support businesses, especially those in the manufacturing sector, to keep them afloat and sustain economic growth, stressing that the “small business sector remains the most critical engine of economic growth”.

On February 16, 2024, BUA Foods, Nigeria’s giant consumer goods producer, said the incessant adjustments in the import duty FX rate are affecting its operations, particularly in the importation of raw materials.

The food producer said the increases are making planning difficult.