Manufacturers kick against reintroduced 4% FOB charge

Manufacturers Association of Nigeria has kicked against the reintroduction of the four per cent Free on Board (FOB) charge by the Nigeria Customs Service, which took effect on August. 4 Mr Segun Ajayi-Kadri, the Director-General of MAN, said in Lagos that the move contradicts the government’s widely publicised suspension of the charge. He said that manufacturers were concerned it would significantly increase the cost of importing raw materials, machinery, and spare parts that are not available locally. Ajayi-Kadri explained that the sudden reintroduction of the four per cent FOB charge led MAN to conduct a rapid technical assessment to confirm the implications for the sector.
The results, he said, showed unsettling issues that could severely impact manufacturing. ”The idea that the charge streamlines previous multiple charges and reduces cargo clearance costs does not reflect reality. “The fact is that the cost of the four per cent charge on a manufacturing company is enormously higher than the combined effect of the seven per ent surcharge and one per cent Comprehensive Import Supervision Scheme (CISS) levy,” he said.
He added that in other West African countries like Ghana, Côte d’Ivoire, and Senegal, targeted inspection or collection fees are kept within a 0.5 per cent to one per cent FOB range, with higher levies only on luxury or non-essential imports. “The Nigeria Customs Service’s unilateral imposition of a uniform four per cent FOB levy would raise the cost of doing business, encourage informal cross-border sourcing, lead to cargo diversion, and promote under-declaration,” the DG noted. Ajayi-Kadri urged the Federal Government and the Nigeria Customs Service to stop implementing the four per cent FOB charge and set a new timeline for its implementation. He suggested they extend it to Dec. 31, to allow for an impact assessment and consultation with stakeholders.
This, he said, would determine an appropriate level of charges that would ensure the customs service performs efficiently. Ajayi-Kadri explained, ”This timeframe would align with the January 2026 take-off date for recently introduced tax laws. “It would allow a proper technical session with strategic stakeholders to discuss issues vital to the survival of affected businesses in Nigeria and the development of business-friendly implementation guidelines.” He suggested that, in the meantime, the NCS should retain the current one per cent CISS plus a seven per cent cost of collection fee. The emphasised that this would balance revenue generation with industrial competitiveness to save 230 million Nigerians from avoidable price increases.