Nigerian manufacturers have voiced strong opposition to the recent reintroduction of the 4 percent Free on Board (FOB) fee by the Nigeria Customs Service (NCS), warning that the move could significantly escalate operational costs and undermine industrial growth.
The NCS reinstated the FOB levy on August 4, 2025, following its suspension in February of the same year, a decision that has drawn criticism from key industry stakeholders.
According to the Manufacturers Association of Nigeria (MAN), the reintroduction contradicts earlier government assurances that the charge would remain suspended to alleviate financial pressures on local businesses.
Director-General of MAN, Segun Ajayi-Kadri, emphasized that the levy would disproportionately affect manufacturers who rely on imported raw materials, machinery, and spare parts unavailable locally.
“The cost of the four percent charge on a manufacturing company is enormously higher than the combined effect of the previous seven percent surcharge and one percent Comprehensive Import Supervision Scheme (CISS) levy,” Ajayi-Kadri stated.
He further noted that the fee could inadvertently increase the cost of goods and services across the country, creating inflationary pressures at a time when consumers are already facing economic strain.
MAN’s DG cited practices in neighboring West African countries such as Ghana, Côte d’Ivoire, and Senegal, where targeted inspection or collection fees typically range between 0.5 percent and one percent of FOB, with higher levies only applied to luxury or nonessential imports.
He warned that Nigeria’s uniform four percent levy could encourage informal cross-border sourcing, cargo diversion, and under-declaration, negatively impacting both local industries and government revenue in the long term.
“The NCS’s unilateral imposition of the uniform 4 percent FOB levy undermines the competitiveness of Nigerian manufacturers and could encourage informal trade practices,” Ajayi-Kadri added.
In response to the industry backlash, MAN urged the government to suspend the fee until December 31, 2025, allowing time for a proper impact assessment and consultation with stakeholders.
The association stressed that a collaborative approach would help balance revenue generation with sustainable industrial development.
ireport247news.com reports that following earlier protests, the NCS had suspended the FOB fee in February 2025.
However, the recent reinstatement appears to disregard the economic challenges faced by manufacturers, raising concerns about policy consistency and transparency.
Economists have warned that if the fee is not reviewed, it could slow industrial output, increase production costs, and make locally manufactured products less competitive in both domestic and regional markets.
The private sector is already grappling with high energy costs, supply chain disruptions, and inflation, making the reintroduction of the levy particularly contentious.
Industry analysts say the current policy reversal could undermine investor confidence and hamper efforts to stimulate industrial growth.
“Consistency in fiscal and trade policies is critical for Nigeria’s manufacturing sector to thrive,” said an independent economic analyst.
“Sudden policy changes like this can create uncertainty, discourage investment, and ultimately impact employment and production capacity.”
As Nigeria continues to pursue industrialization and economic diversification, the dialogue between the government, regulatory agencies, and the manufacturing sector remains crucial.
MAN’s call for suspension and impact assessment underscores the need for evidence-based policy that balances revenue needs with the health of local industries.
With stakeholders urging immediate reconsideration, the reinstated 4 percent FOB fee has sparked widespread debate over its potential effects on Nigeria’s industrial landscape.
The coming weeks will likely see continued discussions between the government and private sector to determine a path that protects manufacturers while maintaining necessary revenue streams.
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