Customs bow to pressure, suspends controversial 4% FOB charge

The Nigerian Customs Service (NCS) has suspended the implementation of its contentious four per cent Free-on-Board (FOB).

The decision comes after multiple pushbacks from stakeholders in Nigeria’s trade sector who criticised the policy as an additional burden on businesses already grappling with high operational costs amid worsening inflation.

In a statement on Tuesday, the NCS said the suspension was part of “ongoing consultations” with Wale Edun, the minister of finance and other stakeholders.

“The Nigeria Customs Service (NCS) hereby announces the suspension of the implementation of four per cent Free-on-Board (FOB) value on imports as provided in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023,” the statement read.

Customs linked the timing of the suspension to the end of its contract with service providers, including Webb Fontaine, which was previously funded through the now-repealed one per cent Comprehensive Import Supervision Scheme (CISS).

Under the old structure, Customs relied on the CISS and a 7 per cent cost of a collection fee, but the NCSA 2023 sought to generate funding under the new four per cent FOB charge. The NCS had claimed this was necessary for modernisation efforts, but the backlash forced a rethink.

Now with the policy on hold, Customs says it will use the transition period to reassess its funding framework, and “optimise the management of these frameworks to serve our stakeholders and the nation’s interests better.”