The Nigeria Customs Service (NCS) has suspended the implementation of the four percent Free-on-Board (FOB) levy on imports, as outlined in the Nigeria Customs Service Act (NCSA) 2023. The decision, announced on Tuesday, follows intense pushback from key stakeholders, including the Manufacturers Association of Nigeria (MAN) and the Nigeria Employers’ Consultative Association (NECA).
According to the NCS, the suspension will allow for further consultation with stakeholders, including the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. The levy was initially introduced as a means to fund the modernization of the customs service, but businesses have argued that it would only worsen Nigeria’s already challenging business climate.
Before the suspension, MAN had strongly opposed the levy, warning that excessive taxation and regulatory costs were pushing manufacturers toward divestment or relocation to more business-friendly neighboring countries. The association called on the federal government to intervene, citing the worsening economic conditions for local businesses.
Similarly, NECA voiced fresh concerns over the multiple fees imposed by government revenue agencies. The association’s Director General, Adewale Oyerinde, criticized the government’s focus on revenue generation without considering its impact on businesses and employment.
“You need to interrogate how many jobs were lost for you to earn that N10 billion revenue recorded by the agency. How many businesses were shut down because of the N1 trillion revenue you have to generate for the government?” Oyerinde questioned.
The suspension of the levy comes amid broader discussions about Nigeria’s economic policies and labor regulations. NECA has expressed concerns over the government’s stance on labor unions, warning that threats to proscribe unions could eventually extend to employers’ federations as well.
The upcoming visit of the International Labour Organization (ILO) Director General to Nigeria is expected to put these labor issues in the spotlight. According to ILO Country Director, Vanessa Phala, the visit will be significant given Nigeria’s prominent role in the organization.
As part of the agenda, NECA plans to push for the long-delayed passage of a new Labor Act, emphasizing the need for stronger protections for both workers and employers. The visit is expected to generate discussions on labor rights, economic policies, and Nigeria’s commitment to international labor standards.
With mounting pressure from businesses and labor organizations, the federal government faces increasing scrutiny over its economic policies and revenue-generation strategies. While the suspension of the FOB levy offers temporary relief, stakeholders remain cautious about future regulatory changes that could impact the business environment.
