The Manufacturers Association of Nigeria (MAN) has rejected the Nigeria Customs Service’s introduction of a 4 percent Free-on-Board (FOB) levy on imports and warned that the policy will raise production costs, fuel inflation, and stifle industrial competitiveness.
The FOB value represents the cost of goods at the point of shipment, excluding freight and insurance.
By applying a 4 percent levy at this stage, importers will incur higher charges before goods even arrive in Nigeria, a development MAN describes as unsustainable for businesses already under severe pressure.
In a statement, MAN said the levy will escalate operating costs for manufacturers who rely on imported raw materials and machinery, with the burden ultimately passed on to consumers through higher prices. With inflation already above 20 percent, the association cautioned that the new policy could worsen cost-of-living pressures.
“Local manufacturers are struggling with foreign exchange scarcity, high energy tariffs, and weak infrastructure. Adding a 4 percent FOB levy compounds these challenges and threatens Nigeria’s industrial base,” MAN stated.
Analysts warn that while Customs may seek to boost government revenue, the broader economic impact could be negative.
Higher import charges risk discouraging legitimate trade, pushing some operators toward smuggling or under-declaration to avoid the levy. The policy could also increase foreign exchange demand, further straining the naira.
The development underscores the ongoing tension between the Federal Government’s revenue drive and the private sector’s struggle for sustainability.
Industry operators argue that without policy adjustments, the levy could undermine Nigeria’s industrialisation efforts, prompting companies to scale back production or consider relocating to more competitive environments.
MAN urged the government to reconsider the measure and explore alternative revenue strategies that do not jeopardise industrial growth. Suggested options include widening the tax base, providing targeted incentives for manufacturers, and engaging stakeholders in dialogue to align fiscal objectives with economic competitiveness.
The association reiterated its call for policies that support production and job creation rather than those that erode margins and inflate consumer prices.