The Naira has experienced significant fluctuations recently, impacting importers who are facing higher costs due to an increased exchange rate used for opening Form M, which is critical for import duties. BusinessDay reported a 14 percent increase from the previous rate of N1,164.84/$ to N1,339.23/$. This increase of N162.51 per dollar signifies a substantial rise in the costs needed to clear goods at Nigerian ports.
Last week, the Naira underwent its most severe devaluation since January, dropping 7.8 percent from the start of the week. However, it rebounded by 8.57 percent on Saturday, appreciated to N1,280/$ from a rate of N1,400/$ on Friday, as noted by multiple traders.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, expressed concerns over the focus on revenue generation by fiscal authorities, suggesting it negatively affects economic growth, job creation, and overall development. Yusuf advocates for the stabilization of exchange rates to support critical sectors of the economy and to alleviate the financial burden on investors due to excessive taxation.
Eugene Nweke, a freight forwarder, highlighted the impact of fluctuating exchange rates on businesses, particularly in the context of cargo clearing at ports. He called for the implementation of a fixed exchange rate regime for cargo clearing to provide relief to businesses, support trading activities, and stabilize the market value of products. Nweke also pointed out that high import and clearing costs are exacerbating Nigeria’s inflation rate.
These ongoing financial challenges underscore the need for careful economic policy adjustments to mitigate the impacts on business operations and the broader economy.