Market News

Forex: Shippers decry high exchange rate, as imports drop by 60% - THE SUN

MAY 25, 2022

By Steve Agbota[email protected] 

Nigeria, leading net importer of goods and services  raging from food, raw materials, automobile among others from US, Europe and Asia is indeed going through some challenging times participating with other countries in global commerce.

Presently, stakeholders in the maritime sector, especially shippers (importers), are beginning to show some concerns over a 60 per cent drastic drop in cargo throughput into Nigeria due to increasing and unstable foreign exchange (forex), the free fall of Naira, among others.

For instance, over the weekend, Naira ballooned from N419.02 to N610 as against a dollar at the parallel market both in Lagos and Abuja.

However, the Nigerian Importers Integrity Association (NIIA) lamented that the Central Bank of Nigeria (CBN) has refused to sell dollars to importers through the official exchange window.

With the Naira sliding to N610, the high exchange rate will further reduce importation because it is eroding the purchasing power of many importers.

Maybe if the CBN is selling Dollars to importers through the official exchange window, that would have helped; but the CBN is not selling Dollars to importers through the official exchange window, and this is not good for business, NIIA lamented.

Daily Sun learnt that importers are unable to bring in cargoes due to the rise in dollars and freight charges, as shippers now pay over $12, 300 to bring in a 40ft container from China as against the $4200 and $5000 before now while they paid over $8000 to bring a 20ft container from the same country.

Reacting to this development, National Vice President of the Association of Nigeria Licensed Customs Agents (ANLCA), Dr. Kayode Farinto, said: “For now, we are using N409, any slight adjustment will definitely affect clearance cost but N610 will definitely affect importation cost, which will invariably  affect the volume of import into the country.

“We have made this recommendation to the house to look into it. People going to Saudi Arabia and Jerusalem are given money at the official rate but the importers will source for dollars at the black market, which is very unfortunate,” he said.

Conversely, the situation will definitely affect the volume of import coming into the country, he said he had predicted that by next month or next two months, if care is not taken, the nation’s economy will enter another recession.

Speaking with Daily Sun, President, Africa Association of Professional Freight Forwarders and Logistics of Nigeria  (APFFLON), Otunba Frank Ogunojemite, said as long as Naira gets weaker, there is going to be problem.

“That means we are going to need more Naira to purchase dollars. And there is no way we are heading to than inflation. The scarcity and unstable dollars have reduced the numbers of cargoes coming into the country, when there is scarcity, inflation will be astronomically higher,” he said.

According to him, the situation needs to be addressed by the government, adding that unstable exchange rate is not the only issue, the duty paid on imported goods have also gone up as well.

“The benchmark for importing 40ft container is higher. Inflation and unemployment are going to come up and when there is unemployment, we are risking insecurity in the country. When people are jobless, the crime will increase. These are the factors that will set in if we fail to do something about the situation.

“And I don’t think government is going to address this for now because as naira is getting weaker, we still battle with N585 per dollar at the parralel market. Now it has gone to N610 while people does not have access to government exchange rate. So the situation is not palatable,” he lamented.

He hinted that to import 40ft of one container from China presently cost $12,300 while 20 ft of a container cost over $8,000 dollars.


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics