CIoD rejects ‘suspension’, advocates for ‘cancellation’ of levy to help grow the economy
By Jeph Ajobaju, Chief Copy Editor
Policy reforms for national economic growth and competitiveness should compel the cancellation of the 4 per cent Free on Board (FoB) levy on the value of imports, not its ‘suspension’, the Chartered Institute of Directors (CIoD) Nigeria has argued.
The Nigeria Customs Service (NCS) earlier this year introduced the levy in accordance with the Nigeria Customs Service Act (NCSA) 2023 but later suspended the implementation because of public outcry that it will stoke up inflation and stunt economic growth.
The outcry was led by importers, manufacturers, economists, and other stakeholders.
“Though it has been temporarily suspended, according to the NCS, for further engagements and consultation with stakeholders, if we go by the trend of public policy in Nigeria, government is usually somehow rigid and unwilling to review its stands. So we are not so sure that anything would change,” CIoD Director General and Chief Executive Officer Bamidele Alimi said in a statement.
He listed the likely impact of the levy to include increased cost of doing business, stifling industrial development, inflationary pressure, more burden on Small and Medium Enterprises (SMEs).
“This additional levy significantly raises the cost of importing raw materials and finished goods.
“For businesses reliant on imported inputs, this charge exacerbates production expenses, thereby diminishing profit margins and competitiveness. Conversely, it could lead to an increase in cost of the end products, if the cost is passed on to the end user.”
Alimi added that SMEs, “which are vital drivers of economic development and job creation,” will be disproportionately affected and “the additional financial burden could force many to scale down operations or shut down entirely.”
The CIoD urged the government to “reassess the 4% FOB charge to evaluate its long-term implications on trade, industry, and the overall economy.”
It recommended that policies should be implemented to support industries reliant on imported inputs, such as duty waivers for key manufacturing sectors.
“Customs procedures should be optimised to reduce bureaucratic bottlenecks and corruption. Technology should be exploited more to reduce human interface.
“The CIoD Nigeria believes that while revenue generation is critical, it should not come at the expense of economic growth and development.
“The 4% FOB charge on imports poses significant risks to Nigeria’s industrialisation agenda and economic stability. We urge the federal government to reconsider this policy and adopt measures that promote trade, foster industrial growth, and enhance Nigeria’s global competitiveness.”
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