The Importers Association of Nigeria (IMAN) has commended the Federal Government’s decision to suspend the recently implemented 4% Free-on-Board (FOB) valuation charge on imports, advocating for comprehensive consultations with all stakeholders in the import supply chain before any further adjustments are made. IMAN President, Kingsley Chikezie, emphasized the need for transparency and inclusivity in the decision-making process, suggesting that any future percentage for the FOB charge, whether it be 2%, 3%, or a reversion to the previous 1%, should be agreed upon after thorough deliberations with importers, clearing agents, freight forwarders, and other relevant parties. This collaborative approach, according to Chikezie, would ensure that all perspectives are considered and potential challenges are addressed proactively, fostering a more harmonious and efficient import process.
The initial implementation of the 4% FOB charge by the Nigeria Customs Service (NCS) on February 6, 2024, sparked immediate protests from the organized private sector, citing concerns about the increased financial burden on businesses. The NCS, responding to these concerns, suspended the implementation on February 12, 2024, promising further consultations. This responsiveness from the government, particularly the Minister of Finance, Wale Edun, has been lauded by IMAN as a demonstration of their commitment to listening to the concerns of importers and agents. The suspension provides an opportunity for a more considered and balanced approach to the FOB valuation issue.
Chikezie further highlighted the cumulative impact of various cost increases across different sectors, including telecommunications, electricity, and fuel, on the livelihoods of clearing agents and freight forwarders who operate at the forefront of port activities. He argued that these rising costs, coupled with the proposed increase in the FOB charge, would impose an unsustainable financial strain on these critical players in the import supply chain. By emphasizing the interconnectedness of these cost factors, Chikezie underscores the need for a holistic approach to policy-making that considers the broader economic context and the potential ramifications on various stakeholders.
IMAN’s position reflects a broader concern about the cumulative burden of escalating costs in Nigeria’s economy. The simultaneous increase in telephone tariffs, electricity tariffs, and fuel prices, alongside the proposed FOB charge hike, creates a compounding effect that erodes the profitability and sustainability of businesses involved in import operations. This concern is amplified by the perceived lack of corresponding improvements in infrastructure, which further adds to the operational challenges faced by importers and agents. The argument presented is that while costs are continuously rising, the infrastructure supporting these operations remains stagnant, creating a widening gap between expenditure and efficiency.
The call for wider consultations underscores the importance of participatory governance in addressing complex economic issues. IMAN’s advocacy for involving all stakeholders in the FOB valuation discussions highlights the value of collective decision-making in achieving equitable and sustainable solutions. By including importers, agents, and other relevant parties in the policy formulation process, the government can gain valuable insights into the practical implications of proposed changes and develop strategies that minimize negative impacts while achieving its revenue objectives. This inclusive approach fosters greater transparency and accountability, building trust between the government and the private sector.
In essence, IMAN’s call for broader consultations on the FOB valuation charge is not merely a plea for a reduction in costs but a call for a more collaborative and considered approach to policy development. It reflects a desire for a more balanced system that recognizes the interconnectedness of various economic factors and the need for sustainable solutions that support the growth and stability of Nigeria’s import sector. This call for dialogue underscores the importance of engaging all stakeholders in the policy-making process to ensure that decisions are informed, equitable, and ultimately contribute to a more robust and resilient economy.
