BUA Foods laments over Nigerian Customs Service FX rate adjustments

BUA Foods Plc has expressed a challenging business environment over the Nigerian Customs Service (NCS) foreign exchange (FX) rate incessant adjustments on import duties.

Speaking to journalists on the impact of the increases, the managing director, BUA Foods, Ayodele Abioye in Lagos recently said the company is “not immune” from the country’s FX crisis.

“We’re all impacted, like every other business,” the managing director said.

Abioye said global shocks such as COVID-19, the Russia-Ukraine war, and other disruptions in other countries’ socio-political environments, led to supply constraints, “particularly in terms of raw materials”.

This, he said, also impacts the prices of raw materials.

“The latest kid on the block in our own local economic climate or environment — aside from the fuel subsidy removal which we all know has a direct consequence on transportation and so many other things — is also the issue of the FX,” he said.

“Reality is that we haven’t seen stability. Just within the last one week, I think we’ve seen changes in duty exchange rate by customs.

“Four times they’ve changed the duty exchange rate. And of course, this is making it very difficult for us as a business to even plan.”

Abioye, however, said the organisation is doing its best in terms of managing the fluctuations.

He also said the company is making efforts to keep prices of products low, noting that the firm has been “very deliberate and very intentional in terms of how we transfer pricing and costs to consumers” from inception.

Abioye disclosed this at a recent news conference in Lagos.

The NCS adjusted the FX rate for its tariff and duties to N1,515 to the dollar on February 15.

According to data from the federal government’s single window trade portal, the service increased the rate by 59.15 per cent relative to the N951 recorded at the beginning of February.

Among other charges, the NCS collects duties levied on imports using FX rates based on the recommendations of the Central Bank of Nigeria (CBN).

The latest adjustment is the sixth in February alone.

Analysts have warned that continued increases in the FX duty rate would have a detrimental effect on various economic sectors, including manufacturing, energy, and consumer confidence.

The Chief executive officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said it would inflict more pain on the citizens, erode profit margins, reduce purchasing power, and put the survival of businesses at an elevated risk.