The Nigerian government should address “arbitrary and ever-increasing” customs duties, as they are crippling businesses and posing danger to the economy, Peter Obi said.
Obi, the 2023 presidential candidate of the Labour Party, in a statement on Wednesday, said the customs duties are negatively impacting businesses and the cost of items.
He cited an example where importers, relying on a prevailing exchange rate for calculations, are hit with significantly higher rates upon arrival, leading to “business losses” and contributing to “inflationary spike.”
“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,” Obi 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.”
Such arbitrary charges, according to Obi, will lead to closure of more businesses, and attendant job losses because, at the time of the initiation of the business, calculations, including duties, have been made based on the prevailing exchange rate, and the prevailing market prices.
“If this situation is not corrected, our 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,” he added.
The former governor also noted that the government should direct its efforts at supporting businesses, especially those in the manufacturing sector.
This, Obi said, will keep businesses afloat and keep the economy growing, as the small business sector remains the most critical engine of economic growth.
“We cannot afford to target high customs revenues at the expense of the survival of local businesses, employment and reasonable cost of living,” Obi said.
