The Nigeria Employers’ Consultative Association has warned that the newly introduced four per cent Free On-Board valuation on imports by the Nigeria Customs Service will impose an additional N2.84tn in costs on businesses, worsening economic hardship for Nigerians.

In a statement on Sunday, Director-General of NECA, Adewale Oyerinde said that with the country’s annual imports valued at N71tn, the four per cent levy will drive up duty payments by 80 per cent, inflating production costs and worsening inflation.

“With Nigeria’s annual imports estimated at N71tn, the newly introduced levy will impose an additional N2.84tn in costs. For industries that rely on imported raw materials, this charge will drive duty payments up by 80 per cent, significantly inflating production cost and eroding competitiveness,” he remarked. “The ripple effects will be severe—higher inflation, deeper poverty, and a weakened investment climate.”

NECA’s DG described the levy as “ill-timed and detrimental,” saying it would escalate production costs, fuel inflation, and threaten jobs.

“The Nigerian business environment is already burdened with multiple taxes, unpredictable policies, and economic challenges,” Oyerinde added. “With rising unsold inventories and growing unemployment, policies should support businesses and not strangulate them.”

He also argued that the charge contradicts ongoing tax reforms led by the Presidential Fiscal Policy and Tax Reforms Committee, which aims to harmonise taxes, stressing “At a time when businesses are calling for a streamlined tax system, this levy undermines reform efforts and sends a negative signal to investors.”

Oyerinde criticised the NCS for prioritising revenue generation over trade facilitation, saying the move contradicts the government’s Ease of Doing Business agenda.

He submitted: “This approach is counterproductive and directly contradicts the Government’s Ease of Doing Business agenda. With a revenue target of N10tn set for the NCS in the 2025 Budget by the National Assembly, this levy appears to be a desperate attempt to meet revenue projections at the expense of businesses and ordinary Nigerians.

“While the Government may achieve its revenue goals, the unintended consequences will be severe—higher costs of goods, business closures, rising unemployment, and worsening economic hardship for millions of citizens.”

NECA called for an immediate reversal of the levy and urged the government to engage stakeholders in developing a more sustainable approach to revenue generation.

“Government must take urgent steps to ease the financial burden on businesses and citizens, rather than implementing policies that will worsen economic hardship,” Oyerinde added.