By Okafor Joseph Afam | February 6, 2025

Importing goods into Nigeria is about to become more expensive as the Nigeria Customs Service (NCS) has imposed a four percent charge on the Free On-Board (FOB) value of imports, a move that has sparked concerns among businesses already struggling with rising operational costs.

The FOB charge, calculated based on the value of imported goods, including transportation costs up to the port of loading, is aimed at enhancing the agency’s operational efficiency, according to Bashir Adeniyi, the Comptroller-General of Customs.

However, the additional cost is expected to put more financial strain on importers, with businesses likely to pass it on to consumers.

Impact on Key Imports

According to the National Bureau of Statistics (NBS) Foreign Trade in Goods Statistics Q3 2024, Nigeria’s major imports include machinery, refined petroleum, vehicles, cereals, and pharmaceuticals. Machinery—critical for industrial and manufacturing operations—accounts for about 20 percent of total imports.

With foreign exchange challenges already inflating import costs, the new charge will further drive up prices.

For example, a car valued at N30 million will now attract an additional N1.2 million due to the four percent FOB charge. This increase will also push up import duties, which range from 5% to 35% depending on the vehicle type and engine capacity, according to NCS data.

The machinery sector faces a similar burden. Since duties and Value Added Tax (VAT) are calculated based on the Cost, Insurance, and Freight (CIF) value, any increase in FOB charges translates to higher import costs.

Even the pharmaceutical industry, despite benefiting from last year’s executive order removing import duties on certain medicines, is not exempt. Although importers of essential medicines may not pay duties, the four percent FOB charge still adds to overall import costs, potentially influencing drug prices in the Nigerian market.

Stakeholder Concerns Over Double Charges

The sudden introduction of the charge has drawn criticism from industry players, particularly because it coincides with the existing one percent Comprehensive Import Supervision Scheme (CISS) fee.

Originally introduced to fund Nigeria’s Destination Inspection Scheme, the CISS fee remains in force, meaning importers now face two separate charges on their goods, worsening financial pressures on businesses reliant on foreign imports.

With inflation already at record highs and the naira’s depreciation increasing the cost of goods, many businesses worry that the new FOB charge could worsen Nigeria’s economic challenges.

The Association of Nigeria Licensed Customs Agents (ANLCA) has strongly opposed the move, calling for its immediate withdrawal.

“[The NCS] must not be made a major revenue-generating agency to the detriment of agonizing Nigerians under skyrocketing inflation,” said Emenike Kingsley Nwokeoji, ANLCA President.

Government’s Response

The NCS has assured stakeholders that discussions are ongoing with the Federal Ministry of Finance to address industry concerns.

In an official statement, the agency urged stakeholders to support what it described as a “legally binding initiative” under Section 18 (1) of the NCS Act 2023.

While the Customs Service insists that the charge is necessary for operational efficiency, businesses and trade associations continue to push for a review, fearing it could further strain an already fragile economy.

As talks continue, importers and consum