The Manufacturers Association of Nigeria (MAN) has raised a red flag over the Nigeria Customs Service’s reported plan to reintroduce the 4% Free-On-Board (FOB) levy, describing it as a severe threat to the already burdened manufacturing sector.
In a strongly worded statement issued in Lagos, MAN’s Director General, Mr. Segun Ajayi-Kadir, mni, cautioned that the move could trigger a chain reaction of economic disruption, leading to higher production costs, disrupted supply chains, increased inflation, and further dampened investor confidence in the Nigerian economy.
Ajayi-Kadir expressed deep concern over the lack of proper stakeholder consultation, especially with manufacturers who would bear the brunt of the policy. “We had hoped that the Nigeria Customs Service (NCS) would reconsider this unpopular and ill-timed levy. Instead, we are reading of its reintroduction in the media without the comprehensive engagement that was promised,” he lamented.
According to MAN, the proposed 4% FOB levy would come in addition to the 1% Comprehensive Import Supervision Scheme (CISS) fee and other existing duties. At a time when businesses are grappling with high energy costs, volatile exchange rates, and steep port charges, the imposition of yet another levy is viewed by the Association as “retrogressive and catastrophic.”
Highlighting the dire implications, Ajayi-Kadir stated:
“Our members are already struggling with the spiraling cost of energy, the 15% hike in port charges, and astronomical changes in import duty rates. The introduction of this levy will only worsen an already volatile economic climate.”
MAN stressed that introducing such a burden at a time when inflation has soared to 34.8% — the highest in nearly 30 years — is out of step with the government’s own fiscal and tax reform agenda aimed at eliminating multiple taxation and encouraging domestic production.
The Association further warned of a ripple effect: increased demurrage charges, stock-outs of raw materials, loss of manufacturing competitiveness, and more unsold inventory. This, MAN warned, would not only deepen the hardship for Nigerian consumers but also embolden smugglers and undercut the country’s efforts to grow its non-oil exports and diversify foreign exchange earnings.
Ajayi-Kadir urged the Federal Government to intervene immediately by instructing the Nigeria Customs Service to abandon the planned reintroduction of the levy, emphasizing that the country cannot afford a policy that contradicts its industrialization ambitions.
“This is not the time for policies that add cost to business. Rather, all arms of government should be focused on de-escalating the cost of doing business, incentivizing investment, and expanding production,” he said.
“De-industrialization is staring us in the face. While other economies are taking aggressive steps to boost domestic production, Nigeria risks walking in the opposite direction.”
He concluded with a call for renewed support to manufacturing as a critical pillar of economic resilience and job creation.
Stay informed, Stay ahead with The Ameh News
Discover more from Ameh News
Subscribe to get the latest posts sent to your email.
