Victor Ezeja
The Manufacturers Association of Nigeria (MAN) has opposed the Nigeria Customs Service (NCS)’s recent reintroduction of a 4 per cent Free on Board (FOB) charge on imports, which took effect on 4 August 2025.
This levy, which is applied to the total value of goods before shipment, has sparked significant concern due to its potential to increase production costs and exacerbate inflation.
The Comptroller General of Customs (CGC), Adewale Adeniyi, announced the new levy at an engagement held in Lagos to sensitise stakeholders in the B’Odogwu platform.
The new tax replaces the 1 per cent Comprehensive Import Supervision Scheme (CISS) levy.
In a statement signed by its Director General, Segun Ajayi-Kadir, MAN stated that the NCS’s move directly contradicts the federal government’s earlier widely publicised suspension of this charge.
The initial suspension in February 2025 came after widespread condemnation from stakeholders who argued that it was ill-timed. The association views this quiet reintroduction as a retrogressive step that ignores the concerns of the business community.
A primary concern is the levy’s impact on the cost of importing essential items for manufacturing. The 4 per cent charge, according to MAN, will significantly increase the cost of importing raw materials, machinery, and spare parts that are not available locally.
Ajayi-Kadir said MAN conducted a technical assessment following the sudden reintroduction of the FoB.
He said the findings revealed that this new levy creates a much higher cost burden than the previous combined structure of a 1 per cent CISS levy and a 7 per cent surcharge on the duty payable, countering claims that the new charge would streamline previous multiple levies.
He explained that this is because the new charge is based on the total value of the import, not just the duty payable.
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The DG of MAN pointed out that the 4 per cent FoB charge makes Nigeria an outlier in West Africa.
According to him, neighbouring countries like Ghana, Côte d’Ivoire, and Senegal keep similar inspection or collection fees within a range of 0.5 per cent to 1 per cent FoB.
These countries only apply higher levies on luxury or non-essential goods, making Nigeria’s uniform levy on all imports, including essential industrial materials, uncompetitive, he argued.
“The unilateral imposition of a uniform four per cent FOB levy will increase production costs, encourage informal cross-border sourcing, fuel under-declaration of goods, and divert cargo away from Nigerian ports,” Ajayi-Kadir warned.
He further warned that the high levy will have unintended negative consequences, such as the possibility of encouraging informal cross-border trade, diversion of cargo to neighbouring countries’ ports, promoting under-declaration of goods, and increasing smuggling.
These activities, he argued, would ultimately undermine the NCS’s own revenue generation goals and stretch its capacity to manage trade infractions.
Highlighting other negative impacts of the new levy, the MAN chief said it would disrupt supply chains, cause depletion of raw materials, inflame demurrage costs, increase unsold inventory, and reduce the competitiveness of Nigerian goods.
The added cost, he warned, will be instantly passed on to consumers, exacerbating the country’s high inflation rate and hurting about 230 million Nigerians already struggling with the cost-of-living crisis.
Customs’ New Digital Platform Glitches
The reintroduction of the charge coincides with prolonged technical glitches in the NCS’s new Unified Customs Management System (UCMS), known as “B’Odogwu”. This has rendered the goods clearing process at ports inefficient, causing manufacturers to incur significant demurrage costs and production stoppages due to stock-outs.
MAN finds it contradictory to introduce a new cost amid such operational disruptions.
Appeal for Suspension and Consultation
MAN urged the federal government and the NCS to suspend the implementation of the 4 per cent FoB charge. The body of manufacturers proposed a new timeline for implementation set for December 31, 2025.
The group maintained that the delay would allow for a proper impact assessment and inclusive consultations with stakeholders to determine a more appropriate charge level and develop business-friendly guidelines.
This timeframe would also align with the January 2026 take-off date for other recently introduced tax laws.
In the interim, MAN recommended that the NCS should revert to the previous charge structure of the 1 per cent CISS plus a 7 per cent cost of collection fee, arguing that it better balances the government’s revenue generation needs with industrial competitiveness and protects Nigerians from avoidable price hikes.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
