The Federal Government’s decision to suspend the controversial four per cent Free-On-Board charge on imported goods has been welcomed by manufacturers and industry stakeholders, who warned that the levy could have plunged Nigeria’s economy into a self-inflicted crisis.
The directive, issued by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and addressed to the Comptroller-General of Customs, Adewale Adeniyi, was announced on Monday and confirmed by both the Manufacturers Association of Nigeria and the Nigeria Customs Service.
In a statement on Tuesday, the Director-General of MAN, Segun Ajayi-Kadir, commended the government for halting what he described as an ill-timed and damaging policy. According to him, the move saved the economy from spiraling costs that could have undermined the Tinubu administration’s ongoing reforms aimed at stability.
“The minister just saved our country from a self-inflicted price escalation that could have unsettled the widely acknowledged stability and repurposing this administration has achieved. Though it was meant to boost much-needed government revenue, the charge is akin to an ‘own goal’ in a football match,” Ajayi-Kadir said.
Manufacturers had repeatedly sounded the alarm that the reintroduced FOB charge, which came into effect on August 4, would sharply raise the cost of importing raw materials, machinery, and spare parts not available locally.
A technical review conducted by MAN with over 2,500 members revealed that the four per cent FOB charge would impose heavier costs than the combined existing seven per cent port surcharge and one per cent Comprehensive Import Supervision Scheme levy.
According to Ajayi-Kadir, such an increase would inevitably have been passed on to consumers, fueling inflation that already stood at 21.88 per cent in July. “Maintaining a four per cent FOB would have skyrocketed the cost of doing business, incentivised informal cross-border sourcing, caused cargo diversion, and encouraged under-declaration,” he explained.
He added that suspending the levy aligns with national efforts to reduce production costs, strengthen local value chains, and diversify the economy. “This move comes as a relief to our members and the broader manufacturing sector, which has been anxiously concerned about the imposition of the charge,” he said.
In a parallel statement on Tuesday, the Nigeria Customs Service confirmed it had received the directive from the finance ministry to suspend implementation of the levy. The National Public Relations Officer of the service, Abdullahi Maiwada, said the NCS remained committed to supporting government fiscal policies while ensuring service delivery to all stakeholders.
“The service has begun immediate consultation with the supervisory ministry to seek guidance on alternative measures during this suspension to ensure continuity of service delivery to all stakeholders,” Maiwada said.
He added that discussions with the Ministry of Finance and other relevant stakeholders would continue to ensure that statutory obligations were met without derailing Nigeria’s economic growth objectives. “We look forward to constructive engagement that will ultimately serve the best interests of the Federal Republic of Nigeria, enhance revenue generation, and support the nation’s economic growth objectives through efficient customs administration,” he stated.
While suspending the levy, the NCS clarified that the four per cent FOB charge was not arbitrarily introduced by the Service but had been established by the National Assembly through the Nigeria Customs Service Act, 2023. Section 18(1)(a) of the Act provides for “not less than four per cent of the free-on-board value of imports according to international best practices” as a statutory funding mechanism for the Service’s operations.
The customs service stressed that media reports suggesting the charge was a new invention were misleading, noting that it was legally backed but suspended in light of stakeholder concerns.
“The service wishes to emphasise that the National Assembly established the four per cent FOB provision as a statutory funding mechanism. Nevertheless, we remain firmly committed to delivering efficient service, upholding international best practices, and supporting Nigeria’s economic growth through effective revenue collection and enhanced trade facilitation,” Maiwada clarified.
The four per cent FOB levy was first introduced in 2022 as part of measures to boost non-oil revenue. It was calculated based on the cost of goods at their port of origin and added to existing charges, including the seven per cent port surcharge and the one per cent Comprehensive Import Supervision Scheme levy.
Stakeholders immediately faulted the levy, warning that it would worsen the already high cost of doing business in Nigeria, drive inflation, and make locally produced goods less competitive. Following strong resistance, the government suspended the charge in 2023 to allow for consultations and an impact assessment.
However, the NCS reintroduced the levy in August 2025, sparking fresh condemnation from the organised private sector. The widespread pushback led to the latest suspension by the finance ministry, which stakeholders now hope will be permanent.
Ajayi-Kadir urged the Federal Government not to treat the suspension as an isolated measure but as part of a broader effort to reform Nigeria’s trade ecosystem. He called for an inclusive review of existing port charges, extensive consultations with stakeholders, and alignment with the new tax reforms aimed at boosting business competitiveness.
“The association remains committed to working with the Nigeria Customs Service to streamline trade processes, reduce the cost of doing business at the ports, and create a friendlier trade facilitation ecosystem,” he said.
He also emphasised that consistent and predictable policies were crucial to attracting investment and sustaining industrialisation. “We applaud the government for listening to the concerns of stakeholders and taking swift action to redress the issue. We urge the Federal Government to continue implementing policies that promote industrialisation, reduce the cost of doing business, and encourage domestic production,” Ajayi-Kadir concluded.
The suspension has been widely viewed as a relief for businesses already grappling with high energy costs, multiple taxes, and an unstable exchange rate. By removing a levy that threatened to increase input costs and consumer prices, the government has offered breathing space to the productive sector.
Industry analysts believe the decision sends a positive signal to investors about the government’s willingness to listen to stakeholders and make pragmatic policy adjustments in line with economic realities.
For now, manufacturers, traders, and other stakeholders await the outcome of consultations between the finance ministry and the NCS on sustainable alternatives that will balance the need for government revenue with the imperative of economic stability and industrial growth.
