The CBN has advised the Nigerian Custom Service (NCS) and other related parties to adopt the closing FX rate on the date of opening Form M for the importation of goods for import duty assessment going forward.

Also, the central bank added that effective February 26, 2024, the new rate would remain valid until the date of termination of the importation and clearance of goods by importers.

The bank disclosed this in a circular dated February 23, 2024, titled, “Foreign Exchange Rates for Import Duty Assessment”, which was signed by CBN Director, Trade and Exchange Department, Dr. Hassan Mahmoud, and addressed to all authorised dealers, NCS, and the public.

The central bank noted that following the liberalisation of the FX market on the Willing Buyer-Willing Seller trading principle, the bank had noted the concerns of importers of goods and services in the irregular changes in the Import duty assessment levies applied by the customs.

The apex bank noted that these developments had further built uncertainties around the pricing structure of goods and services in the economy, creating abnormal increases in the final sale prices of items, which was largely driven by uncertainties, rather than traditional market fundamentals, with implications to near-term inflation trend.

The CBN however clarified that the new directive would enable the customs and importers to effectively plan appropriately and reduce the uncertainties around varying daily exchange rates in determining their revenue or cost structure, respectively.

The circular stated that, “Effective February 26, 2024, the closing rate on the date of opening of Form M for the importation of goods and services would be the rates that would apply for the assessment of import duty.

“This supersedes the requirements of Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual. (Revised Edition), 2018.”

The CBN stated that it was particularly mindful of the initial volatility and price distortions in the aftermath of the FX market liberalisation.

The bank, however, expressed confidence that the reforms in the FX segment would in the medium term, ensure stability in the market and entrench market confidence necessary to attract investment capital for the growth and development of the Nigerian economy.