Market News

BY Bethel Olujobi 

The Federal Ministry of Finance has directed the immediate suspension of the four per cent Free on Board (FOB) charge levied by the Nigeria Customs Service on all imported goods.

The directive, issued in a letter on Monday from Wale Edun, the minister of finance and corresponding chairman of the Nigeria Customs Service Board, was addressed to the Comptroller-General of the Nigeria Customs Service.

It states that the suspension follows extensive consultations with stakeholders, including trade experts and government officials.

According to the ministry, the four per cent FOB charge presented “significant challenges to the Nigerian trade facilitation, environment and economic stability.”

Many businesses and importers had voiced concerns that the levy would create an “increased financial burden,” with potential negative impacts on inflation, trade competitiveness, and the country’s overall business climate.

The FOB charge, passed as law, is calculated based on the value of imported goods, including transportation costs up to the port of loading. The NCS revived the controversial tariff in early August to replace the one per cent Comprehensive Import Supervision Scheme (CISS) and the seven per cent charge on its duties.

It is supposed to “serve investments in technology,” according to Bashir Adeniyi, comptroller-general of Customs, but Customs agents noted that the effects will be felt further down the value chain.

A review of import duty calculations obtained by BusinessDay revealed that the introduction of the Nigeria Customs Service’s four per cent Free-on-Board (FOB) collection pushed up the cost of bringing goods into the country by as much as 186 per cent for certain merchandise.

The Importers Association of Nigeria (IMAN) had estimated that the charge adds an estimated N4 trillion annually to freight costs, a burden that would be transferred directly to final consumers.

Edun stated that the suspension will allow for a comprehensive review of the levy’s framework and its broader economic implications.

The Ministry is looking to work with the Customs Service and other relevant parties to create a “more equitable and efficient revenue structure that supports both revenue generation and economic growth and stability.”