The Nigerian Customs Service (NCS) is poised to reinstate the controversial 4% Free-on-Board (FOB) levy on imports following consultations with stakeholders. This levy, calculated based on the value of goods plus transportation costs to the port of loading, was temporarily suspended earlier in 2025 due to widespread criticism from businesses grappling with escalating operating costs. The suspension provided a window for reviewing the service’s revenue framework. Comptroller-General of Customs, Bashir Adeniyi, acknowledged the operational adjustments necessitated by the suspension, both for the NCS and businesses, while emphasizing the intention to reintroduce the FOB charge after further stakeholder engagement. The initial suspension was triggered by concerns raised by organizations such as the Nigerian Employers Consultative Association (NECA), which projected a potential N2.84 trillion additional cost burden on businesses, exacerbating existing economic hardships. The resumption of this levy signifies the NCS’s commitment to strengthening its revenue base, despite potential repercussions for businesses and consumers.
While the reintroduction of the FOB levy looms, the NCS highlighted its contribution to national food security through significant duty exemptions on essential food imports. Between 2024 and the first quarter of 2025, over N95.1 billion in duty exemptions were granted on imports of maize, rice, and sorghum. The NCS attributed the recent 12-18% drop in prices of these staple foods to these exemptions, emphasizing both their immediate and long-term impact on market affordability. The exemptions implemented in 2024, although initially delayed in reaching consumers, ultimately increased supply, while the 2025 waivers provided further price stabilization. This strategic deployment of duty exemptions underscores the NCS’s role in moderating food costs and bolstering food security initiatives.
The NCS detailed the multifaceted challenges faced during the first quarter of 2025, including the volatile foreign exchange rate, which fluctuated 62 times, impacting import duty predictability. The implementation and subsequent suspension of the 4% FOB levy further complicated operations, requiring adjustments from both the NCS and stakeholders. Despite these challenges, the agency reported progress in its efforts to streamline customs processes and enhance revenue collection. The CG also addressed the newly imposed 14% reciprocal tariff by the United States on Nigerian exports. Consultations are underway, led by the Ministry of Industry, Trade and Investment, to formulate a response to this trade development.
The NCS highlighted the success of its duty exemption policy in mitigating food price increases. The cumulative effect of exemptions granted in both 2024 and 2025 has contributed to a steady decline in the cost of staple foods. Data from the National Bureau of Statistics (NBS) supports this trend, demonstrating the gradual but substantial impact of duty relief on consumer affordability. This proactive approach to food security underscores the NCS’s commitment to leveraging its policies to address critical national needs. Furthermore, the NCS emphasized its ongoing efforts to enhance operational efficiency and transparency in its operations. The agency is committed to modernizing its processes and strengthening stakeholder engagement to promote a more seamless and predictable trade environment.
The NCS’s commitment to revenue generation is evident in its plan to reinstate the 4% FOB levy. Despite the initial suspension and subsequent review, the agency views this levy as a crucial mechanism for funding its operations and contributing to national revenue. The NCS recognizes the potential impact on businesses but believes that the benefits of enhanced revenue collection outweigh the challenges. The agency is committed to ongoing dialogue with stakeholders to mitigate any adverse effects and ensure a smooth transition upon reimplementation. This move underlines the NCS’s focus on fiscal responsibility and its dedication to securing necessary resources for its operations.
In response to the 14% reciprocal tariff imposed by the United States, the NCS is working with other government agencies, particularly the Ministry of Industry, Trade and Investment, to formulate a comprehensive response. Nigeria is pursuing a regional approach that considers both its economic interests and the broader trade dynamics within the Economic Community of West African States (ECOWAS), reflecting its current chairmanship of the regional body. This collaborative and strategic approach underscores Nigeria’s commitment to protecting its trade interests while fostering regional economic cooperation. The outcome of these discussions will significantly influence the future trade relationship between Nigeria and the United States and potentially reshape trade policies within the West African region.
