The Manufacturers Association of Nigeria has proposed to the Nigeria Customs Service that its members who paid a four per cent Free-on-Board charge be given credit in their names, as talks continue to reverse the levy.
In an interview with The PUNCH, Director-General of MAN, Segun Ajayi-Kadir, said the association has continued engaging with the NCS to roll back its plans to increase the FOB charge despite slow progress.
The FOB charge encompasses the cost of delivering goods to a specified port, after which the buyer assumes responsibility for shipping, insurance, and any subsequent transport. Critics of the hike argue that the FOB charge risks increasing costs that will be passed on to consumers as importers pay more to bring goods into Nigeria.
Ajayi-Kadir stated, “We continue to engage until we find common ground for cooperation. I mean, that’s what advocacy is about. I believe that the Customs are working on arrangements to wind down the four per cent FOB charge.”
He explained that some manufacturers have paid the charge and are keen on offsetting their overpayment, noting, “Because some members have gone ahead to pay the four per cent FOB, we have proposed and hope that such money will be converted to credit for them, even if they cannot be refunded, because they are ongoing concerns.”
The NCS first announced plans to introduce a four per cent FOB charge on February 5,2025, withdrew it after six days following private sector backlash and on April 22, 2025 announced plans to reintroduce the charge. MAN has opposed the four per cent FOB charge, insisting that it would “inflict catastrophic consequences” on the manufacturing sector and undermine national industrial goals.
MAN’s DG lamented that the FOB charge hike was coming at a time when the sector still dreaded what it described as an “unwarranted” 15 per cent hike in port charges. He warned that the levy is an additional incentive for smuggling, trade diversion, under-declaration of duty, and other trade infractions in Nigeria.
Other private sector groups, including the Nigerian Employers Consultative Association, warned that the charges will impose an additional N2.84 tn in costs on businesses.
The NCS has yet to budge on the demands of the private sector. According to an earlier statement, the NCS said it decided to hike the FOB charge to four per cent from one per cent to ensure sustainable funding for critical customs operations and modernisation initiatives.
However, Ajayi-Kadir said MAN remains optimistic, stating, “We shouldn’t have issues with (converting the overpayments to credit). The NCS are not insisting on that. It depends on what Customs will do. We’ll be happy to see such funds put aside because they are ongoing concerns.”
He explained that MAN “didn’t have clarity” at the time the NCS hiked the charge, adding that the group has received assurances that it will have a fruitful engagement with Customs. “We are happy to engage,” he noted. “We are always engaging, but our engagement has not yielded the fruits we expected.”
MAN’s DG disclosed that the association was looking forward to a “physical and fruitful meeting” in June, adding, “I do not doubt that we will meet to resolve the matter. We are very optimistic that that will happen.”
