Manufacturers Oppose Reintroduced 4% FOB Charge, Warn of Rising Production Costs

The Manufacturers Association of Nigeria (MAN) has strongly opposed the reintroduction of the four per cent Free on Board (FOB) charge by the Nigeria Customs Service, which came into effect on August 4.

In a statement issued in Lagos on Monday, MAN’s Director-General, Mr. Segun Ajayi-Kadri, described the move as a reversal of the Federal Government’s earlier suspension of the charge and warned that it could severely impact the manufacturing sector.

“The idea that the charge streamlines previous multiple charges and reduces cargo clearance costs does not reflect reality,” Ajayi-Kadri stated.

He expressed concern that the new charge would significantly raise the cost of importing raw materials, machinery, and spare parts that are not locally available, putting additional pressure on manufacturers already grappling with rising operational costs.

Following the announcement, MAN conducted a rapid technical assessment to understand the implications of the policy. The findings, according to Ajayi-Kadri, were “unsettling” and highlighted potentially severe consequences for the industry.

“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 explained.

Ajayi-Kadri also compared Nigeria’s new tariff with practices in neighbouring West African countries, pointing out that in Ghana, Côte d’Ivoire, and Senegal, similar inspection or collection fees typically range between 0.5 per cent and one per cent FOB — with higher levies reserved for luxury or non-essential items.

“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,” he warned.

MAN has therefore called on the Federal Government and the Nigeria Customs Service to halt the implementation of the charge and extend the timeline to December 31. This, the association argues, would allow for proper consultation with stakeholders and a thorough impact assessment.

“This timeframe would align with the January 2026 take-off date for recently introduced tax laws. It would allow a proper technical session with strategic stakeholders to discuss issues vital to the survival of affected businesses in Nigeria and the development of business-friendly implementation guidelines,” Ajayi-Kadri said.

In the interim, MAN has urged the government to maintain the existing import levy structure—one per cent CISS plus a seven per cent cost of collection fee—as a more balanced approach to revenue generation and industrial competitiveness.

The association warned that failure to reconsider the reintroduced charge could result in widespread price hikes and threaten the economic stability of over 230 million Nigerians.