On February 6, 2025, the Nigeria Customs Service (NCS) imposed a 4% charge on the Free On-Board (FOB) value of imports, sparking concerns across the business community. This new levy is an added cost for importers who are already grappling with inflation, high operating expenses, and a weakened naira. The question on everyone’s mind is: How much more can businesses and consumers take?
What Is the FOB Charge?
For those unfamiliar with the term, FOB (Free On-Board) refers to the cost of goods, including transportation to the port of loading—excluding costs beyond that point. The NCS claims this charge will enhance operational efficiency, but many businesses see it as another financial hurdle.
How Does It Impact Importers?
Let’s break it down with a simple example:
If you’re importing a car worth N30 million, this new 4% charge adds N1.2 million to your import costs—before other duties and taxes are even applied. Import duties in Nigeria range from 5% to 35%, depending on the type of vehicle and its engine capacity. This means the higher the FOB value, the more you’ll end up paying in duties.
And it’s not just cars that are affected—machinery, pharmaceuticals, refined petroleum, and cereals are also on the hit list. Machinery alone accounts for about 20% of Nigeria’s total imports, which means various industries will feel this impact hard.
The Domino Effect: Higher Costs for Consumers
The FOB charge directly increases the Cost, Insurance, and Freight (CIF) value, which is the basis for calculating import duties and VAT. Higher CIF values mean higher import duties, and ultimately, consumers will bear the brunt of these additional costs.
Even essential items like medicines—despite last year’s executive order removing import duties on some drugs—aren’t exempt from this new fee. While duties might be waived, the 4% FOB charge will still inflate costs, potentially making medicines more expensive.
Business Owners Are Pushing Back
The business community is understandably unhappy. The Association of Nigeria Licensed Customs Agents (ANLCA) has strongly criticized the new charge, arguing that the NCS should not prioritize revenue generation at the expense of struggling Nigerians.
Their demand is simple: Scrap the charge—now.
To make matters worse, the 4% levy is being collected on top of the existing 1% Comprehensive Import Supervision Scheme (CISS) fee, compounding the financial pressure on importers.
What’s Next?
The NCS insists that the charge is legally binding under the NCS Act of 2023 and has urged stakeholders to comply. However, they also acknowledge the growing concerns and say discussions are ongoing with the Federal Ministry of Finance to address the issues raised by the business community.
In the meantime, businesses are left wondering how much more they can endure as inflation rises, the naira weakens, and operating costs soar. The future remains uncertain, but one thing is clear: This 4% FOB charge could reshape Nigeria’s import landscape—and not for the better.
Scrap the charge..Life is already complicated..