The Manufacturers Association of Nigeria (MAN) has strongly condemned the recent implementation of a four per cent Free-on-Board (FOB) levy by the Nigeria Customs Service (NCS), warning that it could lead to de-industrialisation in the country. In a statement released on Tuesday, February 11, 2025, MAN’s Director-General, Mr. Segun Ajayi-Kadir, expressed concern over the burden this new levy, in addition to the existing one per cent Comprehensive Import Supervision Scheme (CISS) fee, places on its members.
Thank you for reading this post, don't forget to subscribe!“It cannot be the intention of government to decapitate the productive sector,” Ajayi-Kadir stated.
Levy Contradicts Government’s Economic Agenda
Ajayi-Kadir emphasized that the new levy contradicts President Bola Tinubu’s commitment to promoting domestic production, incentivizing exports, and creating a $1 trillion economy by 2030. He described the FOB levy as especially unwelcome during a period when other economies are focusing on reducing the cost of doing business.
Impact on Manufacturing Sector
The introduction of the levy, coupled with a planned 15% increase in port charges, comes at a time when Nigerian manufacturers are already grappling with the sharp rise in the effective import duty calculation rate. Ajayi-Kadir stressed that this move could cause further escalation in the cost of imported raw materials, which had already increased by over 118%, leading to supply chain disruptions and higher demurrage costs.
“The introduction of this levy contradicts the principles of the ongoing Fiscal Policy and Tax Reforms,” he added, referring to the tax bills being considered by the National Assembly that aim to reduce tax burdens.
Threat to Export and Investment Goals
Ajayi-Kadir warned that the levy would **undermine Nigeria’s aspirations to boost foreign exchange earnings through non-oil exports, as many manufacturers rely on imports for vital inputs and machinery not available locally. He further stated that the measure could jeopardize Nigeria’s goal to become a leading investment destination and an industrial hub in the West African sub-region.
Advocating for Tax Base Expansion
While acknowledging the need to increase government revenue, Ajayi-Kadir called for expanding the tax base rather than introducing new levies or increasing existing ones. He reiterated that government agencies should prioritize reducing the cost of doing business to support industrial growth and expand the nation’s revenue base.
MAN has urged the government to reconsider the FOB levy and work toward an environment that encourages manufacturing growth and industrialisation rather than imposing additional financial burdens.
