FG Suspends Controversial 4% FOB Levy on Imported Goods After Widespread Backlash

By Joseph Iyaji | Akahi News

The federal government has officially suspended the recently introduced four percent free on board (FOB) levy on imported goods, following mounting criticism from manufacturers, trade experts, and business stakeholders across the country.

The suspension, confirmed in a memo from R. O. Omachi, permanent secretary for special duties in the office of the minister of finance, marks a significant policy reversal barely two months after the levy was reintroduced by the Nigeria Customs Service (NCS).

Stakeholders Warned of Inflationary Risks

Omachi, in the memo obtained by Akahi News, revealed that the decision came after “extensive consultations with industry stakeholders, trade experts, and relevant government officials” highlighted the adverse impact of the levy on Nigeria’s economic stability.

“It has become clear that the implementation of the 4% FOB charge poses significant challenges to trade facilitation and overall economic growth. Many importers and businesses raised concerns about the increased financial burden this levy imposes, with potential adverse effects on inflation, trade competitiveness, and the business climate in Nigeria,” Omachi said.

He explained that suspending the levy would allow for a comprehensive stakeholder review to develop a “more equitable and efficient revenue structure” that balances fiscal needs with economic stability.

Background to the Controversy

The 4% FOB levy was first proposed by the Nigeria Customs Service on 4th February 2025 to replace its existing seven percent federation account charge and the one percent Comprehensive Import Supervision Scheme (CISS) fee.

At the time, Customs argued that the levy was essential to fund its technology modernisation programme and achieve its 2025 revenue target of N6.58 trillion.

However, the Manufacturers Association of Nigeria (MAN) strongly opposed the policy, warning it would drive up the cost of raw materials, machinery, and industrial inputs — most of which are not produced locally.

In June, Customs Comptroller-General Adewale Adeniyi defended the levy, estimating it would generate over N1.07 trillion in additional revenue. The Senate later raised Customs’ 2025 revenue target to N10 trillion, increasing pressure on the service to maintain the policy.

Manufacturers Welcome Policy Reversal

Industry experts say the government’s decision reflects a growing awareness of the economic pressures facing businesses and consumers.

“Suspending this levy was the right call,” an economist, Dr Tunde Olanrewaju, told Akahi News. “At a time when inflation is already above 30%, adding a 4% charge on imports would have been catastrophic for small businesses and manufacturers who rely heavily on foreign inputs.”

The Manufacturers Association of Nigeria, which had earlier asked the government to delay the levy until December for proper consultation, also welcomed the decision, calling it “a relief for industries already struggling with power costs, currency volatility, and shrinking consumer demand.”

What Happens Next

The Ministry of Finance confirmed that a technical committee would be set up to engage importers, manufacturers, trade experts, and customs officials to design a more sustainable revenue framework.

For now, importers will continue paying the previous federation account and CISS charges until a new tariff structure is agreed upon.

Economic analysts warn that if the government reintroduces any form of levy, it must be gradual and transparent, with clear communication to businesses and the public to prevent uncertainty in the trade sector.

As Nigeria seeks to balance revenue generation with economic competitiveness, stakeholders say meaningful consultation — not sudden policy shifts — will be key to restoring confidence among investors and the private sector.

Akahi News http://www.akahinews.org