Maritime group, operating under the banner of the Sea Empowerment Research Centre, has advocated for the Central Bank of Nigeria (CBN) to refrain from the practice of frequent increases in exchange rates for customs duties.
In response to the recent hike in customs duty to N1,356/$, Dr. Eugene Nweke, Head of Research at the Sea Empowerment Research Center, emphasized the importance of implementing fiscal and monetary policies with a thorough consideration of their economic implications. Nweke expressed concerns that the current approach lacks a responsive leadership framework and falls short of the renewed hope mantra.
The Center asserts that part of the renewed hope mantra should involve transitioning from outdated practices to more suitable methodologies, particularly in their application. Nweke highlighted various critical concerns that the ministry should address, including the impact on businesses, employment, inflation, purchasing power, economic hardship, poverty, and insecurity.
Nweke argued that the continuous escalation of revenue through exchange rate increments may not always align with market forces but could be a deliberate strategy to boost revenue. He stressed the need for a comprehensive review of monetary policy tools to ensure fairness and effectiveness in their application.
Furthermore, the Center observed disruptions in trade documentation associated with the administration of the foreign exchange regime, particularly concerning the International Chamber of Commerce (ICC) Rules on Uniform Customs and Practice (UCP) for Documentary Credits. Nweke suggested that disregarding these rules could lead to inconsistencies in import clearance procedures.
Regarding fiscal policy, Nweke emphasized the importance of avoiding over-taxation on trade, especially in a distressed economy. He suggested exploring tax options on wealth and luxury while monitoring and discouraging insider trading within banks and addressing challenges such as money laundering and arms trafficking.
Nweke called for an independent study within the nation’s international trading climate to inform restructuring of monetary and fiscal policy formulation. He stressed the need for fiscal policies to protect against abuses associated with insider relationships and monopolistic practices, ensuring regulatory standards are upheld.
In conclusion, Nweke urged the Coordinating Minister to direct the CBN to halt the incessant increment of exchange rates for customs duties, considering the interests of the Nigerian populace and the spirit of the renewed hope mantra.
