Despite suspension order, Customs still implementing 4% FOB levy- MAN, agents raise alarm

The Manufacturers Association of Nigeria ( MAN) and clearing agents operating at the nation’s ports have raised the alarm that despite the Federal Ministry of Finance directive suspending the 4% Free-on-Board (FOB) levy on imported goods, the Nigeria Customs Service (NCS) has failed to implement the directive as the levy still reflects on the Customs portal.

Recall that the Minister of Finance and Chairman of the Nigeria Customs Service Board, Wale Edun had in a letter dated September 15, 2025, and addressed to the Comptroller General of Customs ordered the immediate suspension of the 4% FOB levy following widespread public outcry and stakeholder concerns about the levy’s negative economic impact.

The letter, signed by Permanent Secretary R. O. Omachi, stated that extensive consultations with industry stakeholders and trade experts revealed that the 4% FOB charge poses significant challenges to the Nigerian trade facilitation environment and economic stability.

However, the manufacturers and clearing agents confirmed that Customs is yet to implement the directive.

Speaking in an exclusive chat with Maritime Today Online, Director General of MAN, Segun Ajayi- Kadir described the situation as a harrowing experience for manufacturers noting that the government’s official position differs from what is reflected on the Customs portal.

He noted that MAN had previously highlighted how the levy would increase production costs and lead to higher consumer prices.

Ajayi stated that the manufacturers’ initial hope sparked by the suspension directive has been dashed by customs’ continued implementation of the levy.

He said, “Apart from being confused about the situation, it is a concerning development for us. What we know to be the position of Government, as contained in the letter of the Honourable Minister of Finance and Coordinating Minister for the Economy, is different from what is reflected on the Nigeria Customs Service’s portal. We had expected that the implementation of the 4% FOB charge would be suspended and that the Customs Service would revert to the 1% CISS and the 7% Cost of Collection.

“You would recall that MAN had pointed to the need to consider the overwhelming negative impact of the reintroduction of the charge on the manufacturing sector and other businesses. We outlined the implications for increased cost of production and the attendant higher prices of manufactured products for the Nigerians. We canvassed Nigeria’s alignment with prevailing best practices around the world, including the West African Sub-region where FOB charges are ranging between 0.5 and 1%down.

“We then recommended that the implementation of the 4% FOB charge be stopped and an impact assessment of the imposition of the charge be done. We requested for a well structured engagement with relevant stakeholders, including MAN and other organized private sector groups and stakeholders, to ascertain the next steps to address the concerns of Customs on their revenue generation objectives and the profitable operation of manufacturing industries and other businesses.

‘So the suspension was prayers answered and the continued implementation is hope dashed.”

Also speaking, a Board member of the Association of Nigerian Licensed Customs Agents (ANLCA), Dayo Azeez stated that the 4% levy is still active on the Customs portal, preventing many importers from capturing their consignments.

“By the time you want to capture, unless you are ready to forfeit your 4% payment, you can go ahead because nobody will make a refund for you. So, many importers now are not capturing because the 4% is still reflecting in the Customs portal, ” he said.

Azeez who is also the Chief Executive Officer of Mambilla Shipping Agency Ltd warned of looming port congestion and unwarranted accumulation of storage charges and demurrage at shipping companies and terminals as both goods currently at the port and those in transit are affected.

“Both the goods that are at the port now and the goods that are on the way coming, that have been given rotation number by the shipping companies, cannot capture because the 4% is still reflecting on the Customs portal.

“So, this is gradually leading to congestion in the port and unwarranted accumulation of storage charges and demurrage at both the terminals and shipping companies So, many people are just suffering in silence. Since the day the suspension was announced up till this morning, it has not been cancelled, “he said.

When reminded that the 4% FOB levy is actually in the Customs Act, and expected of Customs to implement its laws, Azeez said, “It is the government that gave the directive. So, they should know that there is an existing law supporting the collection of the 4 percent levy in the first instance before issuing the directive.. ”

A former president of the National Association of Government Approved Freight Forwarders (NAGAFF), Increase Uche also echoed same sentiment stating that the minister’s directive should be obeyed since it was issued in line with the laws establishing the NCS.

Reacting to the suspension, the NCS in a statement stated that it has started consultion with the ministry to seek guidance on alternative measures to ensure continuity of service delivery.

The Service also clarified that the 4% FOB provision was not recently introduced but already established in Section 18(1)(a) of the Nigeria Customs Service Act, 2023, as a statutory funding mechanism.

“ For clarity, the Service wishes to emphasise that the National Assembly established the 4% FOB provision through Section 18(1)(a) of the Nigeria Customs Service Act, 2023, which stipulates “not less than 4% of the free-on-board value of imports according to international best practices” as a statutory funding mechanism for the Service’s operations, ” the NCS statement said.

The impasse between the Customs Service’s adherence to it’s statutory law and the Finance Ministry’s directive leaves manufacturers, importers and clearing agents in a difficult position, facing rising costs and operational delays. The industry is left to wonder how long this conflict will continue and who will ultimately bear the financial burden.