In a statement issued in Lagos, MAN’s Director-General, Mr. Segun Ajayi-Kadri, expressed alarm at the sudden reintroduction of the charge, which he argues will drastically increase the cost of importing essential raw materials, machinery, and spare parts unavailable locally. According to Ajayi-Kadri, this decision could undermine the competitiveness of Nigeria’s manufacturing sector, which is already grappling with economic challenges. He emphasized that the levy’s reinstatement was implemented without adequate consultation or assessment, leaving businesses unprepared for its financial implications.
Following the announcement, MAN conducted a rapid technical assessment to evaluate the impact of the 4% FOB charge on the manufacturing sector. The findings, as shared by Ajayi-Kadri, paint a troubling picture. “The results show unsettling issues that could severely impact manufacturing,” he stated, highlighting that the new charge imposes a heavier financial burden than the previously applied 7% surcharge combined with the 1% Comprehensive Import Supervision Scheme (CISS) levy. Contrary to claims that the 4% FOB charge would streamline costs and reduce cargo clearance expenses, Ajayi-Kadri argued that it significantly inflates operational costs for manufacturers.
The MAN Director-General also drew comparisons with other West African countries, such as Ghana, Côte d’Ivoire, and Senegal, where inspection or collection fees are typically capped at 0.5% to 1% of FOB value, with higher rates reserved for luxury or non-essential imports. Nigeria’s blanket application of a 4% levy across all imports, he warned, could lead to unintended consequences, including increased costs of doing business, cargo diversion to neighboring countries, informal cross-border sourcing, and under-declaration of goods. These outcomes could further weaken Nigeria’s trade ecosystem and erode trust in the customs process.
Ajayi-Kadri called on the Federal Government and the NCS to immediately halt the implementation of the 4% FOB charge and proposed a new timeline for its potential reintroduction, suggesting December 31, 2025, as a more feasible date. This delay, he argued, would allow for a comprehensive impact assessment and meaningful consultations with stakeholders to determine a fair and sustainable charge structure. “This timeframe aligns with the January 2026 rollout of recently introduced tax laws,” he noted, adding that it would provide an opportunity for strategic discussions with stakeholders to develop business-friendly guidelines.
In the interim, MAN recommended that the NCS revert to the existing structure of a 1% CISS levy combined with a 7% cost-of-collection fee. According to Ajayi-Kadri, this approach would strike a balance between generating revenue for the government and preserving the competitiveness of Nigeria’s industrial sector. He stressed that such a measure is critical to shielding Nigeria’s 230 million citizens from unnecessary price hikes that could result from increased manufacturing costs.
The controversy surrounding the 4% FOB charge underscores broader concerns about the ease of doing business in Nigeria. Manufacturers are calling for policies that support industrial growth rather than exacerbate existing challenges. As the debate continues, stakeholders await the government’s response to MAN’s recommendations, hoping for a resolution that prioritizes both economic stability and industrial development.