The Manufacturers Association of Nigeria (MAN) on Monday kicked against the reintroduction of the four per cent Free on Board (FOB) charge by the Nigeria Customs Service, which took effect on Aug. 4.
Mr Segun Ajayi-Kadri, the Director-General of MAN, said in Lagos that the move contradicts the government’s widely publicised suspension of the charge.
He noted that manufacturers were concerned it would significantly increase the cost of importing raw materials, machinery, and spare parts that are not available locally.
Ajayi-Kadri explained that the sudden reintroduction of the four per cent FOB charge led MAN to conduct a rapid technical assessment to confirm the implications for the sector.
The results, he said, showed unsettling issues that could severely impact manufacturing.
”The idea that the charge streamlines previous multiple charges and reduces cargo clearance costs does not reflect reality.
“The fact is that the cost of the four per cent charge on a manufacturing company is enormously higher than the combined effect of the seven per cent surcharge and one per cent Comprehensive Import Supervision Scheme (CISS) levy,” he said.
He added that in other West African countries like Ghana, Côte d’Ivoire, and Senegal, targeted inspection or collection fees are kept within a 0.5 per cent to one per cent FOB range, with higher levies only on luxury or non-essential imports.
”The Nigeria Customs Service’s unilateral imposition of a uniform four per cent FOB levy would raise the cost of doing business, encourage informal cross-border sourcing, lead to cargo diversion, and promote under-declaration,” the DG noted.
Ajayi-Kadri urged the Federal Government and the Nigeria Customs Service to stop implementing the four per cent FOB charge and set a new timeline for its implementation.
