This is not a good time for the CBN to increase the exchange rate for the computation of import duty and the clearing of cargo by importers, CPPE said.

The Centre for the Promotion of Private Enterprise (CPPE) on Sunday said the recent decision by the Central Bank to increase the customs exchange rate from N783 to N952/$ would worsen the already prohibitive production and operating costs for businesses in the country.

In a statement signed by Muda Yusuf, director of CPPE, the think tank said the decision would also inflict more pain on the citizens, erode profit margins, reduce purchasing power and put the survival of businesses at an elevated risk.

Mr Yusuf said the frequent changes in rates are also creating serious issues of uncertainty for investors and making the international trade process increasingly unpredictable.

He said businesses are already contending with an incredibly difficult operating environment arising from severe macroeconomic headwinds.

He explained that the persistent currency depreciation is making access to intermediate products very difficult for manufacturers, energy cost remains very high, purchasing power is weak, investors confidence is declining and consumer confidence is on the downward trend.

''This is not a good time for the CBN to increase the exchange rate for the computation of import duty and the clearing of cargo by importers. This review will impact the cost of all imports, including raw materials for manufacturers, pharmaceutical products, pieces of machinery, energy products, petroleum products and many more.

''This will make a bad situation worse for investors in the economy. It will worsen the misery of the citizens amid an excruciating inflationary condition,'' he added.

The CPPE appealed to the CBN and the Coordinating Minister of the Economy to review the increase, adding that trade policy measures should not be subjected to the full vagaries of the philosophy of market forces.

''The CBN should allow for a concessionary rate for the computation of import duty to protect the economy and the citizens from the reality of unbearable inflationary pressures.

''We propose that going forward, CBN should fix the customs duty rate at 20 per cent less than the official exchange rate in the light of the prevailing harsh economic conditions,'' the statement said.