The Chartered Institute of Directors (CIoD) Nigeria yesterday expressed concern about the recently suspended 4% charge on the Free on Board (FOB) value of imports by the Nigeria Customs Service (NCS), urging for policy reforms to protect Nigeria’s economic growth and competitiveness.
The NCS implemented the levy in compliance with the terms of the Nigeria Customs Service Act (NCSA) 2023.
However, it later halted the fee due to public outrage from importers, producers, and other stakeholders.
However, Bamidele Alimi, Director-General/CEO of CIoD, stated in a statement that, “Though it has been temporarily suspended, according to the NCS, for further engagements and consultation with stakeholders, if we go by the trend of public policy in Nigeria, the government is usually rigid and unwilling to review its positions. So we’re not sure if anything will change.”
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He underlined the charge’s effects, which included increasing business costs, limiting industrial development, inflationary pressure, and an impact on Small and Medium Enterprises (SMEs).
Alimi stated, “This new fee greatly increases the cost of importing raw materials and completed items.
“For enterprises depending on imported components, this tax raises production costs, reducing profit margins and competitiveness. In contrast, if the expense is passed on to the end user, it may result in an increase in the cost of the end products.
He went on to say that SMEs, “which are vital drivers of economic development and job creation,” will be disproportionately affected.
“The additional financial burden could force many to scale down operations or shut down entirely,” he said.
The CIoD, however, urged the federal government to “reassess the 4% FOB charge to evaluate its long-term implications on trade, industry, and the overall economy.”
It proposed that policies be introduced to help companies that rely on imported inputs, such as duty exemptions for major manufacturing sectors.
The statement continued, “Customs procedures should be optimised to reduce bureaucratic bottlenecks and corruption.” Technology should be used more to reduce human interaction.
“The CIoD Nigeria believes that, while money generation is important, it should not be at the expense of economic growth and development.
“The 4% FOB fee on imports jeopardizes Nigeria’s industrialization drive and economic stability. We urge the federal government to review this policy and implement steps that will boost trade, industrial growth, and Nigeria’s global competitiveness.”